EO 11246 No More: Requirements for Federal Contractors Under President Trump’s Executive Order

Section 3 of President Trump’s Executive Order entitled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” addresses the federal contracting process and revokes Executive Order, EO 11246, a long-standing order that imposed affirmative action requirements on federal contractors and recipients of federal grants.  This post covers the impact of EO 11246’s revocation. 

Brief Background of Executive Order 11246

In 1965, President Lyndon B. Johnson signed EO 11246, titled “Equal Employment Opportunity,” with the purpose of prohibiting discrimination in employment by federal contractors and subcontractors.  EO 11246 imposed requirements on federal contractors and subcontractors to safeguard equal employment opportunities by implementing affirmative action programs.  Among other obligations, EO 11246 required contractors and subcontractors to file compliance reports with the government that included information about the contractor’s employment practices, policies, programs, and a demographic breakdown of the workplace by race and sex.  The Office of Federal Contract Compliance (OFCCP) was tasked with monitoring compliance and enforcement with EO 11246.

President Trump’s Executive Order Removes Affirmative Action Program Requirements for Federal Contractors and Grantees and Imposes New Requirements

President Trump’s Executive Order revokes EO 11246 and thereby removes any affirmative action obligations imposed on federal contractors, subcontractors, and grantees.  The Executive Order prohibits federal contractors and subcontractors from considering “discriminatory and illegal preferences, mandates, policies, programs, regulations, enforcement actions, and requirements,” and as part of this, requires that the OFCCP “immediately cease (1) promoting ‘diversity’; (2) holding Federal contractors and subcontractors responsible for taking ‘affirmative action’; and (3) allowing or encouraging Federal contractors to engage in workforce balancing based on race, color, sex, sexual preference, religion, or national origin.” 

In response to this, the acting U.S. Department of Labor Secretary issued an agency order directing all DOL employees to “cease and desist all investigative and enforcement activity under the rescinded Executive Order 11246.”  It applied to all DOL employees including the OFCCP and captures all “pending cases, conciliation agreements, investigations, complaints, and any other enforcement-related or investigative activity.” 

Separately, in addition to removing affirmative action requirements, the Executive Order now requires that the following provisions be included in federal contracts, subcontracts, and grants: “(A) A term requiring the contractual counterparty or grant recipient to agree that its compliance in all respects with all applicable Federal anti-discrimination laws is material to the government’s payment decisions. . .; and (B) A term requiring such counterparty or recipient to certify that it does not operate any programs promoting DEI that violate any applicable Federal anti-discrimination laws.” As we covered here, while the Executive Order ostensibly permits federal contractors to continue to maintain DEI programs if they do not violate federal anti-discrimination laws, the breadth and scope of lawful practices now remain unclear.  Without a court decision or agency guidance providing more detail regarding the type of DEI program that would (or would not) violate federal anti-discrimination laws, the Executive Order remains open to interpretations that could support claims against contractors by the government and private parties.  The Executive Order also directs the Office of Management and Budget (OMB) to remove DEI-related principles and language from federal contracts and grants.

What Requirements Remain in Place After EO 11246’s Revocation?

Although the OFCCP is no longer required to monitor and enforce compliance with EO 11246, at present it continues to have enforcement power under Section 503 of the Rehabilitation Act and the Vietnam Era Veterans’ Readjustment Act (VEVRA), which relate to separate affirmative action requirements for qualified disabled persons and veterans.  That said, the agency member directed the OFCCP to notify all regulated parties with “open reviews or investigations” that the “Section 503 and VEVRAA components of the review or investigation are being held in abeyance pending further guidance.”

What Does This Mean for Federal Contractors and Grantees?

Federal contractors and grantees must remain aware of the following key points and requirements: 

• Federal contractors and grantees with affirmative action programs under EO 11246 (related to race or sex affirmative action) will need to disband those programs by April 21, 2025 (90 days from President Trump’s Executive Order).  Federal contractors and grantees may continue with their programs through April 21, 2025 but should be prepared to disband those programs and turn their attention to complying with state and local laws.
• The OFCCP has also ceased investigations and enforcement activity related to EO 11246 requirements; federal contractors and grantees should review any pending OFCCP activity to determine if it arose under EO 11246, and preserve documentation and files related to such activity for the time being.
• In the absence of EO 11246 requirements, state and local laws will come to the forefront, and federal contractors and grantees should review their DEI programs to ensure they are aligned with any applicable anti-discrimination laws. But they should also review their pay transparency policies and procedures and conduct equal pay audits to confirm how they will stay in compliance with those related laws. 
• Although there is uncertainty over future enforcement efforts, federal contractors and grantees should continue complying with any obligations under Section 503 of the Rehabilitation Act and VEVRA.
• Federal contractors and grantees should work with counsel to ensure that they meet and abide by the new certification and affirmation language requirements now required in federal contracts. 
• Federal contractors and grantees should partner with key stakeholders, including human resources professionals, legal professionals and other business stakeholders, who can provide critical advice about what is needed to achieve the organization’s mission and goals while accounting for the current political environment around this issue.
• Federal contractors and grantees should continue to monitor new developments and partner with legal counsel to determine their options. 

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.  You can access more coverage on the administration’s impact on the workplace here.  And check out our “Predictions and Practical Policies” podcasts series, which covers what employers should expect with the new administration and recommended next steps.

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