The Trump Administration Brings Attack on Illegal DEI Policies to the Private Sector

The Trump Administration Brings Attack on Illegal DEI Policies to the Private Sector

Brett Whitley, Associate

            President Donald Trump has issued a flurry of Executive Orders in his first few days in office that aim to eliminate “diversity, equity, and inclusion” (“DEI”) policies in the private and public sphere.  President Trump’s Executive Order titled, “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” (the “Order”), revokes decades-old Executive Order 11246, which, among other things, aimed to ensure that private sector employers working for the federal government under contract did not discriminate on the basis of race, color, religion, sex, sexual orientation, gender identity, or national origin.  However, despite the Order, private employers with DEI policies need not and should not eliminate these policies without a thorough audit of the same.

Revocation of Executive Order 11246 and the Order Replacing It

            In 1965, during the midst of the civil rights movement, President Lyndon B. Johnson signed Executive Order 11246 (“EO 11246”).[1]  Part II of EO 11246 required all government contracting agencies to include in their contracts with any given contractor provisions that require the contractor to agree that it will not discriminate against any employee or applicant for employment because of race, color, religion, sex, sexual orientation, gender identity, or national origin.[2]  Further, EO 11246 required that contractors take affirmative action to provide employment to persons from within minority or underrepresented classes. 

            However, just days into his presidency, President Donald Trump signed the Order revoking EO 11246, which will go into effect on April 20, 2025.[3]  Specifically, per the language of the Order, it seeks to end “illegal preferences and discrimination” in diversity, equity, and inclusion (“DEI”) policies, such as those included in EO 11246.  This Order, once effective, will have a dramatic impact on the American workforce, given that approximately one-fifth of the entire U.S. labor force is employed by private sector employers contracting with the federal government.

            In particular, the Order provides that “federal contractors and subcontractors shall not consider race, color, sex, sexual preference, religion, or national origin in ways that violate the Nation’s civil rights laws” during their employment, procurement, and contracting practices. Similarly, the Order requires that the heads of federal contracting agencies “include in every contract or grant award: 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.”

            The Order also sets its anti-DEI policy sights on private sector employers who do not contract with the federal government, but have DEI policies, in Section 4 of the Order.  Section 4 states that the heads of all federal contracting agencies, with the assistance of the Attorney General “shall take all appropriate action with respect to the operations of their agencies to advance in the private sector the policy” of combatting illegal private-sector DEI preferences, mandates, policies, programs, and activities (the “Policy”).  Section 4 goes on to task the heads of federal agencies with submitting a report containing recommendations for enforcing the Policy and taking “other appropriate measures to encourage the private sector to end illegal discrimination and preferences, including DEI.  Section 4 even goes so far as to require that the federal contracting agency heads meet a quota of nine potential offenders of the Policy.  The report is due May 20, 2025.

            Though Section 4 is unclear as to what “appropriate action” or “appropriate measures” could entail, litigation against these organizations, corporations, associations, etc. that are violating the Policy through their DEI programs is possible, as Section 4 states that the report should identify “litigation that would be potentially appropriate for Federal lawsuits.”

Employer Considerations

            Colorado employers should remember that, per its plain language, the Order is premised on ending illegal discrimination, such as hiring quotas or preferential treatment in DEI programs that could run afoul of civil rights laws, meaning that so long as a private employer’s DEI initiatives do not conflict with federal laws like Title VII of the Civil Rights Act, the Age Discrimination in Employment Act, or the Americans With Disabilities Act, these initiatives will likely be legally compliant notwithstanding the Order’s prohibitions.  However, private sector employers should ensure that their DEI initiatives and policies are legally compliant by conducting an audit of said initiatives or policies with the help of legal counsel, like Campbell Litigation, before assuming they are not at legal risk, whether the risk comes from a workplace lawsuit or from a federal investigation.

[1] Executive Order 11246, 30 FR 12319.

[2] President Barack Obama signed Executive Order 13672, amending Executive Order 11246 to prohibit federal contractors and subcontractors from discriminating on the basis of sexual orientation and gender identity.  See U.S. Dep't of Labor, History of Executive Order 11246, https://www.dol.gov/agencies/ofccp/about/executive-order-11246-history (last visited Jan. 28, 2025).

[3] The White House, Ending Illegal Discrimination and Restoring Merit-Based Opportunity, https://www.whitehouse.gov/presidential-actions/2025/01/ending-illegal-discrimination-and-restoring-merit-based-opportunity/ (last visited Jan. 28, 2025).