The Trump Administration has wasted no time making waves in the employment world immediately rolling back years-old federal diversity and affirmative action programs for federal contractors and executive agencies, and directing federal agencies to recognize only two sexes. In his first two days in office, President Trump issued the “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” Executive Order, which ends certain affirmative action plan (“AAP”) requirements for federal contractors and also seeks to end illegal diversity, equity, and inclusion (“DEI”) programs in the workplace. President Trump also issued the “Defending Women from Gender Ideology Extremism and Restoring Biological Truth to the Federal Government” Executive Order, which instructs the U.S. Employment Opportunity Commission (“EEOC”) and other federal agencies to only recognize two sexes, male and female.
What Is An Executive Order?
Authorized by Article II of the U.S. Constitution, an executive order (“EO”) is a commonly used tool which allows the president to set policies and direct executive agencies in enforcing the laws they are charged with overseeing. Although EOs are legally enforceable, they do not require approval from Congress and cannot supersede federal statutes or legislation. EOs may also be challenged in court, and are thus subject to judicial review.
How Did the Trump Administration Change the Law for Federal Contractors and Executive Agencies?
The Trump Administration’s EOs rescind all DEI “mandates, policies, programs, references and activities” for federal contractors within executive departments and agencies. In doing so, the EOs revoke several longstanding executive actions relating to DEI and workplace affirmative action, specifically:
- EO 11246 (issued by President Johnson in 1965, this EO directed all federal contractors to ensure equal employment opportunity and create AAPs for women and racial minorities, and granted authority to enforce these requirements to the Office of Federal Contract Compliance Programs (“OFCCP”));
- EO 13672 (issued by President Obama in 2014, this EO amended EO 11246 by including sexual orientation and gender identify as protected identities); and
- EO 11478 (issued by President Nixon in 1969, this EO required that federal agencies develop AAPs for women and racial minorities).
As a result of the Trump Administration’s recent actions, all three of the above EOs have been revoked. More specifically, the EOs state that the OFCCP must “immediately cease promoting diversity, holding Federal contractors and subcontractors responsible for taking affirmative action … and allowing or encouraging Federal contractors and subcontractors to engage in workforce balancing based on race, color, sex, sexual preference, religion, or national origin.” The EOs further state that the OFCCP may no longer conduct or enforce compliance reviews of AAPs, and that all federal agencies must include in federal contracts and grants terms requiring the recipient company “to certify that it does not operate any programs promoting DEI that violate any applicable Federal anti-discrimination laws.”
The EO provides a 90-day grace period, meaning that federal contractors may voluntarily continue to follow the now-defunct AAP requirements until April 21, 2025, at which time they must cease doing so.
The EO also directs all federal agencies to place on paid administrative leave any federal employees whose duties involve DEI and to prepare to cut any DEI-related offices or programs from their budgets.
Notably, because the Trump Administration’s EOs cannot supersede federal statutes, Section 503 of the Rehabilitation Act of 1973 (“Section 503”), which ensures equal employment opportunity to qualified individuals with a disability, and the Vietnam-Era Veterans Readjustment Assistance Act of 1974 (“VEVRAA”), which ensures equal employment opportunity to qualified veterans, remain in effect. As a result, federal contractors and subcontractors who meet specific jurisdictional thresholds must continue to prohibit discriminatory employment practices, and take affirmative action to employ and satisfy their AAP requirements, as it relates to qualified individuals with disabilities and veterans.
How Do the Recent Executive Orders Affect Private Employers (Including Those That Are Not Covered Federal Contractors)?
The Trump Administration’s EO “encourages” all private sector employers “to end illegal DEI discrimination and preferences.” The EO also directs federal agencies such as the EEOC and OFCCP to identify for investigation any private employers that use “illegal” DEI practices, and to consider and report any potential lawsuits, regulatory action, or guidance to bring against private employers that fail to comply.
Although some phrasing in the EO appears to characterize DEI programs and practices as per se unlawful, the impact of the EO and the impending agencies’ recommendations regarding private sector companies is unclear. The OFCCP has stated that it will issue further guidance shortly. Currently, the lawfulness of a private sector company’s DEI programs and practices under federal law is determined by applicable federal statutes, such as Title VII of the Civil Rights Act of 1964 (“Title VII”), and relevant agency guidance and legal precedents interpreting such statutes. While the Trump Administration’s recently issued EO encourages private companies to discontinue “illegal” DEI programs, it does not provide new guidance or specific direction concerning what might make an existing DEI practice or program illegal, and it does not impose any new obligations or requirements on private sector employers beyond existing federal anti-discrimination requirements.
Further rescinding several policy initiatives expanded under the Biden Administration, President Trump’s EO also directs the federal government and all federal agencies, such as the EEOC, to recognize only two sexes – male and female. However, employers should be mindful that in Bostock v. Clayton County, 590 U.S. 644 (2020), the U.S. Supreme held that Title VII and other federal laws prohibit discrimination based on gender identity and sexual orientation. Thus, while the Trump Administration’s EO is intended to restrict the EEOC or any other federal agency from investigating illegal discrimination based on an individual’s gender identity, federal law continues to prohibit employment discrimination based on gender identity or sexual orientation and, as a result, individuals may continue to file charges or pursue private lawsuits for such claims.
Key Takeaways
- All federal contractors and federal agencies must end their AAPs for women and racial minorities within 90 days (federal contractors may voluntarily continue such AAPs for the next 90 days);
- Federal contractors must continue to comply with their AAP requirements for disabled individuals and veterans under Section 503 and VEVRAA, respectively;
- All private employers must immediately end any “illegal” DEI programs or practices that promote employment based on race or sex; and
- The EEOC and other federal agencies have been directed to only recognize two sexes, male and female, but discrimination based on gender identify continues to be illegal under federal law.
We will continue to monitor these developments and report any further legal guidance issued by the federal government or the courts.
