Affirmative Action For Federal Contractors: Will Trump’s EO Be The End Of DEI?

Reshaping DEI policies

On Jan. 22, 2025, President Donald Trump signed an Executive Order (EO) rescinding several prior directives, including one that prohibited employment discrimination based on race, color, religion, sex, sexual orientation, gender identity or national origin and required affirmative action for federal contractors and subcontractors.

One of the orders it revokes, EO 11246, was originally issued by President Lyndon B. Johnson in 1965, establishing the requirement that certain federal contractors and subcontractors establish affirmative action programs. 

As a result, not only is affirmative action no longer required, but the federal government will consider it to be illegal.

The new EO, titled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity,” says federal contractors “may” continue to comply with the “regulatory scheme” currently in place for up to 90 days. However, the Office of Federal Contract Compliance Programs (OFCCP), which is responsible for enforcing affirmative action, must immediately cease:
 

• Promoting “diversity.”
• Holding federal contractors and subcontractors responsible for taking “affirmative action.”
• Allowing or encouraging federal contractors and subcontractors to engage in workforce balancing based on race, color, sex, sexual preference, religion, or national origin.

The EO also requires that the Attorney General and heads of relevant agencies determine the appropriate measures to enforce civil rights laws and end discriminatory diversity, equity and inclusion (DEI). This EO marks a significant pivot. Affirmative action programs that were required for decades will soon be unauthorized and may create legal liability. 

The OFCCP’s enforcement power has been gutted, and contractors/subcontractors will now have to certify that they are not promoting unlawful DEI in the contracts themselves.

The impact this EO will have on states or municipalities that require their own contractors and subcontractors to engage in affirmative action is unclear, although it now seems these laws are in conflict with this EO.

Additionally, the EO provides that within 120 days the Attorney General and Secretary of Education will jointly issue guidance to all state and local educational institutions that receive federal funding, grants, or federal student loan assistance.

Notably, contractors’ responsibilities concerning protected veterans or individuals with disabilities, which are governed by statute, the Vietnam Era Veterans’ Readjustment Assistance Act and Section 503 of the Rehabilitation Act of 1973, respectively, are unaffected by this EO.

This EO likely will have a ripple effect. Entire industries have been established to promote diversity and inclusion in employment, and to assist contractors in complying with their affirmative action requirements.

A fact sheet also was released further, articulating the policy changes. 

This article first appeared here.

Share in the comments if your business is impacted by this order and how you plan to ensure compliance with your policies.

	Kenneth A. Rosenberg is a Partner at Fox Rothschild LLP.
	Kelly L. McNaughton is an Associate at Fox Rothschild LLP.