DEI executive orders

In January 2025, the President issued two executive orders (EOs) concerning diversity, equity, and inclusion (DEI) and diversity, equity, inclusion, and accessibility, (DEIA) initiatives. These EOs are likely to have a significant impact on the practices of both the federal government and the private employer sector for years to come.

Ending Radical and Wasteful Government DEI Programs and Preferencing

The first EO, issues on January 20, 2025, is entitled “Ending Radical and Wasteful Government DEI Programs and Preferencing.” This EO directs the Office of Management and Budget (OMB), the Attorney General, and the Office of Personnel Management (OPM) to terminate all “discriminatory” programs. The definition of discriminatory programs includes illegal DEI and DEIA mandates, policies, programs, preferences, and activities of the federal government.

As a result of this directive, OPM and the Attorney General are to review and revise all existing federal employment practices, union contracts, and training policies or programs. All employment practices are to reward individual initiative, skills, performance, and work, and may not consider DEI or DEIA factors.

Under this directive, all federal employees overseeing DEI programs have been dismissed, despite their civil service protections. Therefore, challenges to these terminations are likely. Businesses also have responded, either by removing all mention of DEI from their organizational policies and communications, or by simply waiting to see what happens next before making changes.

Furthermore, the EO requires the head of each federal agency, department, or commission to terminate all DEI, DEIA, and environmental justice offices and positions. Any programs or plans involving “equity,” including grants or contracts, and DEA or DEIA performance requirements also must be stricken.

Finally, each agency must provide a list to OMB within 60 days of any agencies that the previous administration relabeled in a “misleading” manner for preservation purposes. Agencies also must provide a list of federal contractors who have provided their employees with DEI training or training materials.

Ending Illegal Discrimination and Restoring Merit-Based Opportunity

The second EO, issued on January 21, 2025, is entitled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity.” This EO took various other actions, also targeted at DEI programs and what it terms “illegal” discrimination. First, the EO revoked EO 11246, which required federal contractors to engage in affirmative action based on race and gender. The U.S. Department of Labor (DOL) is to immediately cease enforcement activity of the prior EO.

Next, the EO encourages private sector companies “to end illegal DEI discrimination and preferences.” Within 120 days of the EO, the Attorney General must submit a report to the President containing suggestions for enforcing civil rights laws and any other measures necessary to end illegal discrimination and preferences, including DEI, in the private sector.

Each federal agency must identify up to nine potential civil compliance investigations targeted at publicly traded corporations, large nonprofits and foundations, state and local bar and medical associations, and larger colleges and universities. Additionally, the Attorney General issued a follow-up memo advising private companies of potential criminal investigations into their DEI initiatives.

The EO also requires all federal contractors to certify that they are not operating illegal DEI programs or using unlawful preferences. As a result, federal contractors are awaiting guidance on what constitutes “illegal” DEI, out of concern about the potential for actions against them under the False Claims Act.

However, the EO leaves affirmative action in place for veterans and individuals with disabilities. Protections under Title VII of the Civil Rights Act of 1964 for discrimination based on race, color, religion, sex, or national origin still apply, as does the Supreme Court ruling interpreting Title VII as including discrimination based on sexual orientation and gender identity. Nonetheless, the EO eliminated EO 13672, which added sexual orientation and gender identity as protected classes, leaving a direct conflict between the EO and the relevant Supreme Court decision.

This EO leaves contractors with the direct message that any affirmative action is illegal. Still, contractors or subcontractors with affirmative action clauses already in contracts should adhere to those clauses.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Source: Hall Benefits Law © Mondaq Ltd., 2025

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