On January 21, 2025, President Trump issued an executive order titled, “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” (the “Order”). Among other things, the Order rescinds Executive Order (“E.O.”) 11246, which was issued by President Johnson in 1965. E.O. 11246 has formed the basis for the authority of the Office of Federal Contract Compliance Programs (“OFCCP”) to compel companies doing business with the federal government to comply with certain equal opportunity and affirmative action requirements. These requirements include complying with anti-discrimination laws that prohibit discrimination based on race, color, religion, sex, sexual orientation, gender identity, or national origin, and developing and implementing affirmative action programs aimed at addressing the underrepresentation of women and minorities in the workforce.
Over the years, the OFCCP has exercised its authority under E.O. 11246 by conducting audits of federal contractors and subcontractors to ensure compliance with these equal employment and affirmative action requirements. An audit by the OFCCP has historically involved the agency reviewing a company’s affirmative action program documentation and compliance efforts, analyzing a company’s hiring and compensation data, and looking for areas of potential discrimination in hiring and promotion.
With the issuance of the Order, the OFCCP is required to immediately cease: “(A) [p]romoting ‘diversity’; (B) [h]olding Federal contractors and subcontractors responsible for taking ‘affirmative action’; and (C) [a]llowing or encouraging Federal contractors and subcontractors to engage in workforce balancing based on race, color, sex, sexual preference, religion, or national origin.” The Order also instructs all agency heads to “include in every contract or grant award” a term that requires the federal contractor or grantee to “certify that it does not operate any programs promoting DEI that violate any applicable Federal anti-discrimination laws.” This emphasis on the elimination of certain diversity, equity, and inclusion (“DEI”) programs among federal contractors appears to be in alignment with President Trump’s other executive orders impacting DEI initiatives.
We are still working to understand the full implications of the Order on federal contractors and subcontractors, particularly since the Order does not appear to have affected the OFCCP’s enforcement of other federal contractor affirmative action obligations relating to veterans and individuals with disabilities. While we continue to monitor developments in this area, federal contractors and subcontractors, federal grant recipients, and other private sector employers should consider reviewing their DEI initiatives and affirmative action programs to ensure compliance with the evolving legal requirements and should consult with counsel as needed.
