President Donald Trump signed an Executive Order (EO) on January 21, 2025, titled “Ending Illegal Discrimination and Restoring Merit Based Opportunity.” This EO addresses multiple areas, but of particular significance to federal government contractors is the revocation of EO 11246.

In 1965, President Lyndon B. Johnson issued EO 11246, which prohibited discrimination by federal agencies and federal government contractors and required affirmative action to ensure equal employment opportunity. Additionally, it mandated most federal contractors to implement written Affirmative Action Plans, which were subject to audit by the Office of Federal Contract Compliance Programs (OFCCP). In the event that these audits resulted in a non-compliance finding, EO 11246 provided for various remedies, including back wage payments and specific commitments, such as hiring qualified individuals based on gender and race. Further, if a problem was noted in an audit, the contractor was likely bound to report on compliance for a multi-year period.

The new EO issued by President Trump is based, in part, on the rationale that affirmative action may result in preferences for individuals within those protected classes. It also maintains that other federal statutes already prohibit discrimination on the basis of various protected classes, such as Title VII of the Civil Rights Act of 1964.

Furthermore, the EO will require federal government contractors to sign agreements that include a clause committing them to comply with all federal anti-discrimination laws. Contractors will also be required to certify that they do not operate any Diversity, Equity, and Inclusion (DEI) programs in violation of federal law prohibiting discrimination.

Contractors should note that they are still required to develop written plans as required by Section 503 of the Rehabilitation Act and the Vietnam Veterans Era Readjustment Rights Act.

The recent EO also impacts private employers who are not federal government contractors. Private employers are directed to comply with federal non-discrimination laws and to eliminate illegal private sector DEI preferences, mandates, policies, programs, and activities. To ensure compliance, federal agencies are directed to look for, identify, and eliminate illegal DEI activities.

At this time, some issues remain unclear, including the potential impact on ongoing enforcement audits. Additionally, there is no clear process for identifying or locating DEI programs—under any title or designation—that may be operating in a manner contrary to federal anti-discrimination laws.

For the time being, employers who are federal government contractors may continue to follow their affirmative action plans concerning females and minorities for 90 days after January 21, 2025. After that period, they must cease following the requirements of EO 11246.

Employers should also review all policies and programs related to the terms and conditions of employment to ensure they are being applied consistently to all applicants and employees without any preference based on protected classifications. Specifically, if an employer has a policy or program focused on DEI, it should be carefully examined for any indication of preference or favoritism based on factors other than merit or qualifications.

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Photo of Dan Stern Dan Stern

Dan works closely and seamlessly with his clients to develop policies, practices, and programs designed to bring clarity and consistency to their overall employment environment in order to minimize potential claims or regulatory scrutiny. He recognizes that even the most well-crafted and well-intentioned…

Dan works closely and seamlessly with his clients to develop policies, practices, and programs designed to bring clarity and consistency to their overall employment environment in order to minimize potential claims or regulatory scrutiny. He recognizes that even the most well-crafted and well-intentioned employment policies won’t serve his clients well if they are not practical or compatible with a company’s operations or culture.

Photo of Daisy Ramirez Daisy Ramirez

Daisy Ramirez is an associate attorney in Dykema’s Labor and Employment and Litigation groups, providing counsel to clients on a range of employment and commercial disputes. Daisy assists clients in navigating complex workplace issues and represents them in various litigation matters.