Trump Executive Order Takes on DEI in the Workplace: Practical Considerations for Private Employers

President Trump has issued a flurry of wide-ranging executive orders intended to shake up the employment landscape. One of those orders, entitled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” (the “Executive Order”), takes aim at non-compliant DEI programs and policies. It also creates a momentous change in the federal contractor landscape by revoking Executive Order 11246, which has, for the past sixty years, served as the foundation for non-discrimination and affirmative action requirements in the federal contracting space. Although the Executive Order’s mandates are vague in many places and raise more questions than they answer, at bottom, the Executive Order appears designed to attempt to effectively stamp out DEI programs and policies in the federal workforce, while putting private sector employers on notice and pushing them to proactively modify, narrow or even end their DEI initiatives. But as we’ll discuss more below, these developments do not compel private employers to rescind their DEI programs and policies entirely; instead, employers should use the Executive Order as an opportunity to review their existing programs and policies to ensure that they (i) continue to align with their mission and organizational goals, (ii) are legally compliant in light of the change in administration, and (iii) whether subsequently modified or not, thereafter are effectively communicated to stakeholders. 

What The Executive Order Says

The Executive Order explicitly orders “all executive departments and agencies . . . to terminate all discriminatory and illegal preferences, mandates, policies, programs, activities, guidance, regulations, enforcement actions, consent orders, and requirements.” In a nod to the private sector, it further orders “all agencies to enforce our longstanding civil-rights laws and to combat illegal private-sector DEI preferences, mandates, policies, programs, and activities.” The Executive Order (and other associated actions taken in the first days of this new administration) takes aim at “illegal discrimination” from several different angles. 

First, it revokes executive orders and other actions from previous presidential administrations specifically intended to bolster diversity, equity and inclusion efforts (and/or affirmative action programs) in the federal workforce. Although President Trump’s directives in the federal sector are the most far-reaching and impactful (including that certain federal departments/offices will be dismantled and the employees of those departments ultimately terminated), this post remains focused on the Executive Order’s implications for private employers. 

Next, the Executive Order attempts to “streamline” the federal contracting process to “comply with our civil-rights laws.” As part of this, the Executive Order revokes longstanding Executive Order 11246, issued by President Johnson in 1965, which: (i) prohibited discrimination by federal contractors against employees or applicants on the basis of race, color, religion, sex, or national origin; and (ii) created affirmative action obligations with respect to race and sex for such contractors. As a result: 

• The Office of Federal Contract Compliance Programs within the Department of Labor (“OFCCP”) cannot promote “diversity” (which the Executive Order does not further define), hold federal contractors and subcontractors responsible for taking “affirmative action,” or allow or encourage federal contractors and subcontracts to engage in workforce balancing based on race, color, sex, sexual preference, religion, or national origin. 
• Federal agency contracts and grants must include language requiring the contractor or grant recipient to certify as a material term for payment purposes that it is in compliance with all applicable federal anti-discrimination laws and that it does not operate any programs “promoting DEI that violate any applicable federal anti-discrimination laws.”
• Executive Order 13279 of December 12, 2002 (Equal Protection of the Laws for Faith-Based and Community Organizations) is expanded to include race, color, sex, sexual preference, and national origin (in addition to religion), meaning federal contractors and subcontractors may not consider these characteristics in their employment, procurement, and contracting practices.
• Federal contractors will have 90 days (until April 21, 2025) to phase out compliance with prior OFCCP affirmative action obligations. 
• The Office of Management and Budget (the “OMB”) is tasked with excising references to DEI principles (notably “under whatever name they may appear”) from federal acquisition, contracting, grants, and financial assistance procedures, with the stated purpose of “streamlin[ing] those procedures, improv[ing] speed and efficiency, lower[ing] costs, and comply[ing] with civil rights laws.” Under the Executive Order, the OMB must also terminate all mandates, requirements, programs, and activities surrounding “diversity,” “equity,” “equitable decision-making,” “equitable deployment of financial and technical assistance,” “advancing equity,” and the like. 

Third, the Executive Order directs the Attorney General, in partnership with agencies and the Director of the OMB, to submit a report to the Trump Administration by May 21, 2025 with recommendations on measures to “encourage the private sector to end illegal discrimination and preferences, including DEI.” This report is expected to have the following features: 

• Identifying the key private sectors of “concern” for each agency (and within each sector, identifying the most “egregious” and “discriminatory” DEI practitioners); 
• Stating specific steps and measurements to “deter” private sector DEI programs and principles (whether specifically denominated as DEI or otherwise);
• Charging each agency with identifying up to nine potential civil compliance investigations of corporations (both publicly traded and non-profit), higher education institutions (with endowments over $1 billion), foundations (with assets over $500 million), and bar and medical associations; 
• Identifying other strategies to encourage the private sector to end “discriminatory” DEI practices and preferences; 
• Identifying litigation appropriate for federal government involvement (e.g., by way of filing lawsuits, statements of interest, etc.); and 
• Suggesting other potential regulatory action and sub-regulatory guidance. 

Lastly, the Attorney General and Secretary of State will issue guidance by May 21, 2025 to local and state educational agencies that receive federal funds, along with higher education institutions that receive federal grants or participate in the student loan assistance program under Title IV of the Higher Education Act, as to steps “required” to comply with the Students for Fair Admissions, Inc. v. President and Fellows of Harvard College, 600 U.S. 181 (2023) (“Students for Fair Admissions”) decision. That Supreme Court decision rejected the use of racial quotas in affirmative action programs used in some higher education contexts. 

What Should Private Employers Do Now?

1. Consider a Measured Response:  The Executive Order does not mandate that private employers shut down all diversity efforts, including ending diversity programs, policies and practices; it does not order the termination of staff that focus on DEI programming, or do anything remotely similar. Rather, while there is certainly a component that aims to pressure employers to do just that (or to otherwise limit their DEI programs substantially), the Executive Order more generally is aimed at ending illegal DEI practices – in other words, DEI practices that are already not legally compliant. Employers must, therefore, be even more deliberate in their compliance efforts and how they communicate about DEI in the workplace in light of this Executive Order (and the continued evolving legal and political landscape). As part of this response, employers should consider implementing regular evaluation of their DEI programs to ensure that they are thoughtful, meaningful, meet organizational objectives, and, of course, legally compliant. 
2. Pay Close Attention To Continued Legal and Political Developments:  The portion of the Executive Order aimed at providing “encouragement” to private sector employers to end discriminatory DEI practices immediately led to raised eyebrows, particularly among the wide array of private sector employers in varied industries that have long promoted programs and initiatives aimed at supporting various underrepresented groups in legally permissible ways. Applicable government guidance and judicial case law up until this point has indicated that – while there are very real limitations to employer efforts that might operate in a way that violates anti-discrimination laws (e.g., by having diversity hiring or promotion quotas) – common corporate approaches to “DEI” efforts (such as the maintenance of inclusive employee affinity groups and recruitment efforts to create candidate opportunities in underrepresented communities, etc.) have been found legally permissible where those efforts are motivated by legitimate, non-discriminatory business priorities. Employers who decided to continue to make space for DEI in their workplace will need to monitor these developments and understand: (i) how far the Trump Administration intends to go in curbing private sector DEI practices; (ii) the possibility that this Administration could seek enforcement activity (including investigations or even litigation) against employers that espouse DEI values despite longstanding legal precedent allowing for lawful initiatives; and (iii) the legal limitations on targeting private companies that are subject to federal anti-discrimination laws (such as Title VII) but which are not explicitly covered by federal government-focused executive actions (like the Executive Order). Given the lack of specific definitions and practices that the Executive Order considers prohibited, employers will need to be prepared to continue to adjust their programs and practices as the Executive Order (and any future orders and directives) is implemented by agencies and interpreted by the courts after expected legal challenges. 
3. Redouble Focus on the Legal Viability of DEI Programs:  As noted above, the Supreme Court’s 2023 Students for Fair Admissions decision squarely rejected the use of racial quotas in some education-based affirmative action programs. But racial quotas have long been held to be discriminatory in the workplace under laws like Title VII. Expecting that the Students for Fair Admissions decision would one day extend into the private sector workplace, many employers revisited their DEI programs to reconfirm and further enhance legal viability. For example, some employers have considered how to better expand recruitment efforts, including how to broaden the recruiting of previously underrepresented community members, while others looked to non-traditional approaches that focus on socioeconomic factors instead of protected categories. Some employers have also rebranded their efforts – “Access and Opportunity” instead of “Diversity, Equity, and Inclusion” for instance. The Executive Order insinuates that these rebranding efforts alone will not insulate employers from scrutiny under the order. But, regardless of the path an organization takes, there will likely be continued government and stakeholder scrutiny, and these programs, whatever their name, must be tailored appropriately to meet organizational objectives while ensuring legal compliance. For now, even under the Executive Order, efforts to increase and retain diverse representation that are appropriately focused are permissible provided they do not “violate any federal anti-discrimination laws,” which has been a legal requirement since the passage of Title VII. Employers should continue to monitor how federal law interpretation evolves, especially as President Trump appoints Commissioners to the U.S. Equal Employment Opportunity Commission (“EEOC”), the federal agency that interprets and enforces anti-discrimination laws. Notably, the Executive Order does contain a carve out that defers to the authority of executive departments and agencies, and the heads thereof, which leaves an open question as to how agencies (such as the EEOC) will go about interpreting and implementing these changes. 
4. Review (and Reconsider) Contracts with the Federal Government:  To the extent that an employer contracts with the federal government, the Executive Order indicates that programs which otherwise promote “DEI in violation of federal anti-discrimination law” will be under increased scrutiny. Though enforcement and implementation of this stated goal is yet to be seen, employers should review future contracts and grants to determine the extent of the certifications that may be required and what sort of DEI efforts employers can engage in while accurately attesting to such certifications. 
5. Allow for the Wind Down of Federal Contractors’ Race and Sex-Based Affirmative Action Programs While Maintaining Disability and Veteran Affirmative Action Programs:  Absent a successful legal challenge or some intervening guidance from OFCCP to the contrary, federal contractors with affirmative action programs that have existed under Executive Order 11246 (related to race or sex affirmative action) will need to disband those programs by April 21st. This is a seismic shift for federal contractor compliance, particularly as the Executive Order 11246 framework (and associated OFCCP regulations) have existed for decades and President Trump’s first administration left these programs untouched. Further, while the Executive Order has the effect of eliminating affirmative action programs based on race and sex, it is silent as to whether there will be any impact on affirmative action programs on the basis of disability, and the Executive Order explicitly exempts veterans from its reach. Neither is surprising given that contracting preferences based on disability and veteran status are governed by statutes, not executive orders. (The Rehabilitation Act of 1973 governs disability affirmative action and the Veterans’ Readjustment Assistance Act of 1974 governs veteran affirmative action.) Accordingly, affirmative action programs on the basis of disability or veteran status (both of which are addressed by statutes outside the scope of Executive Order 11246) may remain intact, although there are some questions around this issue given directives to federal agencies against the promotion of “diversity,” workforce balancing, or responsibility for taking “affirmative action.” Federal contractors should look to potential OFCCP guidance as to winddown efforts but also as to continued affirmative action efforts to ensure compliance. 
6. Continue to Account for Existing Federal Anti-Discrimination Laws:  While this may be obvious, we believe it worth mentioning, given some of the early market reactions to the Executive Order: federal anti-discrimination laws that apply to private employers, including Title VII, the ADA, the ADEA, and other measures, are still the law of the land and employers should make sure to reinforce their existing anti-discrimination policies and programs. Similarly, but importantly, certain employers (at present) are still required to comply with employee demographic data reporting via the federal EEO-1 process (which large employers submit in the second quarter of each year) – this compliance obligations remains unaffected by the Executive Order. 
7. Continue to Account for State and Local Anti-Discrimination Laws:  Likewise, the Executive Order does not purport to preempt state/local law obligations employers may have related to non-discrimination in the workplace. Just by way of example, although some federal contractor compensation disclosure requirements will fall away in the absence of Executive Order 11246, many states and localities have salary disclosure and wage transparency laws, some of which require employee demographic data reporting, and employers will need to continue to comply with these requirements. 
8. Consider an Appropriate Communications Strategy:  Employers continue to increasingly find themselves on the front lines of many social issues, and the issuance of the Executive Order is no exception. Employers will need to decide quickly whether and how they might address this latest development (and similar Trump-related workforce developments), both internally and externally, as public reaction has been, and is likely to remain, strong across the political spectrum. Employees, board members, investors, clients, vendors and other important business relationships may advocate for companies to take (or not take) a visible position on this issue. Employees may also wish to speak up themselves, including on employer platforms. Whether to speak and if so, what to say, should be evaluated in light of variables such as reputational risk, talent acquisition and employee retention priorities, investor sentiments, community focus, and other business interests. Of course, not speaking at all remains an option – some organizations have decided that no message is their best message in response to divisive or politically challenging issues – particularly given the blitz of these issues over the past several years and the fatigue associated with current events. But many others will speak out and due consideration should be given, and important stakeholder feedback sought, on how best to communicate on this latest development, including in a manner that adheres to the law while optimizing stakeholder relationships.
9. Consider the Executive Order in the Context of Corporate Disclosures:  The Executive Order does not explicitly provide any direction to private employers regarding DEI practices through corporate disclosure statements. For years, many public companies that file corporate disclosure statements have voluntarily shared information about the companies’ diversity efforts, demographic statistics, and other similar information to provide investors information about the company’s human capital risks, planning and oversight. As part of the overall communication strategy, employers should work with employment and corporate disclosure counsel to ensure that the latest upcoming and future rounds of disclosures reference (or do not reference) company DEI programs appropriately and otherwise signal ongoing compliance with applicable law, particularly given the Executive Order’s directive to target publicly traded corporations for potential civil compliance investigations.
10. Use Legal Counsel and other Key Stakeholders as an Important Asset During This Process:  Legal compliance, while of course necessary and critical, alone will not drive this process. While employers should consult legal counsel to better understand the (evolving) legal framework applicable to DEI and to ensure legally complaint DEI program design and implementation, it’s just as important that employers partner with all stakeholders, including human resources professionals, key business stakeholders (such as the C-suite and senior management, as well as the board) who can provide critical advice about what is needed to achieve the employer’s corporate mission and goals, while accounting for the current political environment around this issue. 

The Mintz Employment team is continuing to monitor ongoing announcements by the Trump Administration along with other judicial and legislative developments and stands ready to assist employers in responding to the rapidly evolving landscape. For more detail on legal shifts with the change in administration, our colleagues recently hosted a webinar found here and have recorded a series of “Predictions and Practical Policies” podcasts found here that detail what employers should expect with the new administration and recommended next steps to prepare. And look out for more thought leadership on this and related issues as events unfold. 

Subscribe To Viewpoints