During his first week in office, President Trump issued multiple executive orders, including several that rescind previous orders related to diversity, equity, and inclusion (“DEI”) within the federal workforce. These new directives call for the elimination of DEI programs within federal agencies and government contracting, marking a significant shift in federal policy. It is not yet clear whether these executive orders will survive legal challenges, and whether they will result in actual changes or are just an expression of policy values. In light of these uncertainties, companies with federal contracts should consult with counsel, and other private companies should monitor any legal changes and consult counsel as needed.

Key actions include:

“Initial Rescissions of Harmful Executive Orders and Actions,” signed January 20, 2025, rescinded over 70 executive orders and executive memoranda from former President Joe Biden’s administration. In particular, they rescind a number of previous executive orders signed by former President Biden that promoted DEI goals within the federal government, including “Advancing Racial Equity and Support for Underserved Communities Through the Federal Government (EO 13985)”, “Diversity, Equity, Inclusion, and Accessibility in the Federal Workforce (EO 4035)”, and “Advancing Economy, Efficiency, and Effectiveness in Federal Contracting by Promoting Pay Equity and Transparency (EO 14069 ).”

“Ending Radical and Wasteful Government DEI Programs and Preferencing,” signed January 20, 2025, mandates a dismantling of diversity, equity, and inclusion (DEI) offices and initiatives within the federal government. It also revokes a previous executive order that reinstated the ability of federal contractors to conduct certain anti-bias workplace training in the workplace, which Trump also sought to limit in his first term. This order requires every agency, department, or commission head, along with the Attorney General and the Directors of the Office of Management & Budget and Office of Personnel Management, to create a list of all federal contractors who have provided DEI training or DEI training materials and federal grantees who have received federal funding “to provide or advance DEI and environmental justice programs, services, or activities since January 20, 2021.” The order does not address what action may be pursued to federal contractors on this list.

“Ending Illegal Discrimination and Restoring Merit-Based Opportunity,” signed January 21, 2025, revokes a number of previous executive orders that established anti-discrimination protections and advanced efforts to improve diversity and equity in the federal workforce. It expressly reverses Lyndon B. Johnson’s 1965 Executive Order 11246, which mandated federal departments, agencies, and contractors to engage in affirmative action to ensure an inclusive workforce by preventing discrimination against any employee or applicant because of certain protected characteristics.

This order impacts affirmative action and other anti-discrimination practices that previously applied to applicable federal contractors. It eliminates federal contractor affirmative action requirements and directs the Office of Federal Contract Compliance Programs (OFCCP) to “immediately cease: (A) promoting ‘diversity’; (B) holding Federal contractors and subcontractors responsible for taking ‘affirmative action’; and (C) allowing or encouraging Federal contractors and subcontractors to engage in workforce balancing based on race, color, sex, sexual preference, religion, or national origin.” It also requires the head of each agency to include terms in every contract or grant awards that require the contractual counterparty to (1) affirm that it is complying with applicable federal anti-discrimination laws and (2) certify that it does not operate any programs promoting DEI that violate applicable federal anti-discrimination laws.

It further directs federal agencies to take action against “DEI discrimination” throughout the private sector by encouraging them against voluntarily engaging in DEI activities and initiatives. The order states that, “the Attorney General, within 120 days of this order, in consultation with the heads of relevant agencies and in coordination with the Director of OMB, shall submit a report to the Assistant to the President for Domestic Policy containing recommendations for enforcing Federal civil-rights laws and taking other appropriate measures to encourage the private sector to end illegal discrimination and preferences, including DEI.” Specifically, the Attorney General must create a “strategic enforcement plan” that identifies “sectors of concern,” within each agency’s jurisdiction, identifies the “most egregious” DEI practitioners in each sector of concern, and outlines specific deterrence steps for DEI programs deemed discriminatory, which includes potential litigation strategies and regulatory actions. It further states that, “as a part of this plan, each agency shall identify up to nine potential civil compliance investigations of publicly traded corporations, large non-profit corporations or associations, foundations with assets of 500 million dollars or more, State and local bar and medical associations, and institutions of higher education with endowments over 1 billion dollars.” The order does not define what the administration believes to be an “illegal” DEI program or initiative and does not impose any new obligations on private employers.

These executive orders do not relieve employers of compliance with existing federal anti-discrimination laws, which include Title VII of the Civil Rights Act of 1964, Age Discrimination in Employment Act (ADEA), and Americans with Disabilities Act (ADA). There are also compliance obligations under the Vietnam Era Veterans Readjustment Assistance Act (VEVRAA) and Section 503 of the Rehabilitation Act. California employers must also continue to comply with California’s Fair Employment and Housing Act (FEHA.) It is expected that there will be legal challenges to President Trump’s executive orders based on these anti-discrimination laws, as well as challenges based on whether President Trump has the authority to unilaterally take the actions outlined in these executive orders. While it goes beyond the scope of the Special Alert to detail existing cases, there is still much uncertainty about what will result from these legal challenges.

What impacts will President Trump’s executive orders have on private companies? The answer depends on whether the company contracts with the federal government and how so. President Trump’s recent executive orders significantly impact employers engaged in federal contracting. The January 21, 2025 order purports to mandate the elimination of DEI initiatives that violate existing federal anti-discrimination laws among federal contractors. This order expresses the goal to prohibit organizations from implementing DEI employment programs for positions funded by federal contracts. Consequently, private employers with federal contracts should consult legal counsel to assess their DEI policies for compliance with applicable law and analyze the risks that the federal government could rescind existing contracts or refuse to grant future opportunities. Private employers without federal contracts may not feel direct or immediate effects, but the broader shift in federal policy could have indirect consequences. Private employers should closely monitor the legal landscape, including litigation applying existing federal and state law in the context of DEI initiatives and possible state-level changes in law and regulations related to workplace diversity programs. Private employers with concerns about this issue should consult legal counsel.

If you have questions or need advice about how these executive orders will affect your business, please contact us.

• Kim A. Edmunds (kedmunds@wilsonturnerkosmo.com)
• Emily J. Fox (efox@wilsonturnerkosmo.com)

Wilson Turner Kosmo’s Special Alerts are intended to update our valued clients on significant employment law developments as they occur. This should not be considered legal advice.