Sweeping changes have come about as a result of a new Trump Executive Order entitled, “Ending Illegal Discrimination And Restoring Merit-Based Opportunity – The White House.”  The primary impact will be felt by federal government contractors and grant recipients, who now face new obligations and the dismantling of past requirements, but there also will be a broader rooting-out of DEI programs in the private sector, particularly targeting large employers.

This is the second in a series of articles on the Trump Executive Orders on affirmative action (AA) and diversity, equity and inclusion (DEI) issued on January 20 and 21, 2025, that collectively outline how we got here, what has been eliminated, what new mandates have been issued, what has survived intact, and what employers can do going forward if diversity remains an important value for them.  This article focuses on what has been eliminated and what new mandates have been issued.

What Is Being Dismantled

Issued in 1965, Executive Order 11246 mandated a range of policy, analysis and reporting requirements for federal government contractors, and wielded the power of the purse to ensure compliance.  Regulations issued in response to the executive order particularly focused on federal contractors with more than 50 employees and having federal contracts totaling more than $50,000, and they included:

• developing and enforcing a policy promoting equal employment opportunity;
• posting an equal employment opportunity statement in their workplaces and in all job postings and advertisements;
• notifying all applicable unions and subcontractors of the employer’s EEO obligations;
• establishing and administering a written affirmative action plan with placement goals for women and “minorities” (defined to include Black, Hispanic, Asian/Pacific Islander, and American Indian/Alaskan Native employees), and action-oriented programs to accomplish the goals;
• filing compliance reports with the Office of Federal Contract Compliance Programs (OFCCP), including the annual EEO-1 form of employment statistics based on types of position and the numbers of women, minorities, disabled, and veterans in those positions; and
• making their books and records available for inspection to ensure compliance with the terms of the executive order.

Executive Order 11246 provided that noncompliant employers faced suspension or revocation of their contract, and referral for possible civil action by the Equal Employment Opportunity Commission or, if submitted information was found to be false, then possible criminal action by the Department of Justice.

The regulations implementing these provisions, and particularly all the elements of what to report and how for an AA plan, are extensive.  Many federal government contractors have relied on in-house experts, third-party vendors, outside counsel, and/or software tracking systems to maintain compliance.  An entire cottage industry has been built over the past 60 years to meet the requirements of Executive Order 11246.

The Trump Executive Order

The new Trump Executive Order is comprised of four components:

• revocation of a series of past executive orders, including Executive Order 11246;
• directives to the OFCCP on what actions must cease;
• directives to all government agencies on language to be included in each contract or grant award; and
• directives to the Office of Management and Budget (OMB) and the Attorney General to dismantle all federal references to diversity, equity and inclusion.

OFCCP is expressly directed to cease holding federal contractors and subcontractors responsible for taking “affirmative action” and is instructed to no longer allow or encourage federal contractors and subcontractors to “engage in workforce balancing based on race, color, sex, sexual preference, religion, or national origin.”

OMB and the Attorney General are directed to review and revise, as appropriate, all Government-wide processes, directives, and guidance, apparently to comply with the terms of this new executive order.

DEI Invoked Where It Doesn’t Really Apply

Executive Order 11246 prohibited discrimination and mandated providing equal employment opportunity, including in hiring, promotion, job transfers, layoff or termination, rates of pay, and selection for training.  It never actually mandated DEI.

Also revoked by the Trump Executive Order is Executive Order 13583, which was a directive by President Obama to promote diversity and inclusion efforts among executive departments and agencies of the federal government, and a 2016 Presidential Memorandum by President Obama similarly seeking to promote diversity and inclusion in the national security workforce.  The Obama executive order directed the development of a government-wide diversity and inclusion initiative and strategic plan for the federal workforce, while the presidential memorandum provided more specific directions on data collection and analysis, expanded training, and flexible work policies to enhance diversity specifically among the national security workforce.  Neither applied to the private sector.

Finally, the Trump Executive Order revokes a 1994 Executive Order that required federal government agencies to consider the adverse human health or environmental effects of government programs on minority and low-income populations.  It was an environmental justice initiative, not an employment-related directive.

How DEI Is Being Attacked

Notwithstanding that the executive orders being revoked never promoted DEI in the private sector, the Trump Executive Order heavily targets private employers with directives that:

• the OFCCP immediately cease “promoting ‘diversity;’”
• the heads of all government agencies include in each federal contract or grant award that the contractor/recipient certify
  • it agrees that its compliance in all respects with all applicable federal anti-discrimination laws is material to the government’s payment decisions, and
  • that it does not operate any programs promoting DEI that violate any applicable federal anti-discrimination laws; and
• the Director of the Office of Management and Budget (OMB), with the assistance of the Attorney General as requested, excise references to DEI and DEIA principles, no matter how they are labeled, from federal acquisition, contracting, grants, and financial assistance procedures and terminate all DEI-type mandates, requirements, programs, or activities, as appropriate.

Finally, the Trump Executive Order seeks to root out DEI programs in the private sector that it believes to be unlawful discrimination and preferences.  To achieve that, it directs all government agencies to advance in the private sector a “policy of individual initiative, excellence, and hard work.  It also gives the Attorney General 120 days to develop and submit a strategic plan to eliminate private sector DEI programs that it believes to be unlawful.  The report is required to include:

• key sectors of concern within each agency’s jurisdiction;
• “the most egregious and discriminatory DEI practitioners” in each such sector;
• specific steps to deter unlawful DEI programs including by identifying up to nine potential civil compliance investigations that target publicly traded corporations, large non-profit corporations or associations, foundations with assets of $500 million or more, state and local bar and medical associations, and institutions of higher education with endowments over $1 billion dollars; and
• other strategies focused on ending DEI initiatives in the private sector that are discriminatory, including litigation and regulatory action.

The Executive Order requires a similar Attorney General report focused on state and local educational agencies that receive federal funds and institutions of higher educations that receive federal grants or participate in the federal student loan program for compliance with the 2023 Supreme Court decisions.

What’s In and What’s Out for Federal Contractors and Grant Recipients

Affirmative action requirements, including the development of an AA plan, are no longer required of federal contractors with respect to race, sex, national origin, color, or religion.  Going beyond that, federal contractors and grant recipients must affirmatively acknowledge they understand that their compliance with federal anti-discrimination laws is a material condition of their receipt of federal funds, and they do not operate programs promoting DEI that violate any applicable federal anti-discrimination laws.

Larger organizations that have promoted DEI measures should presume they will be the targets of the Attorney General’s report on DEI programs, and should revisit their programs to confirm that, in promoting more diverse and inclusive workplaces, they appropriately adhere to the requirements of federal employment laws.

One important caveat – the dismantling of AA is tied to the revocation of Executive Order 11246.  As discussed in our next piece in this series, federal contractors also have certain reporting and affirmative action requirements with respect to individuals with disabilities and veterans.  Those obligations arise from statutes passed by Congress, not an executive order.  Their foundation is stronger, and those requirements remain in place.

By Tracey I. Levy