Consuela A. Pinto, PintoBrown PLLC
On January 22, 2025, two days into President Trump’s second term in office, he issued an Executive Order titled Ending Illegal Discrimination and Restoring Merit-Based Opportunity (Order). The Order reinforces that civil rights laws protect Americans from discrimination and “serve as a bedrock supporting equality of opportunity for all Americans.” Simultaneously, the Order rescinded Executive Order 11246 (EO 11246), ending 60 years of affirmative action and nondiscrimination requirements in federal contracting, and called for the end of “illegal” DEI preferences and discrimination.
- RESCISSION OF THE EO 11246
The Office of Federal Contract Compliance Programs (OFCCP), an agency within the US Department of Labor, was tasked with enforcing EO 11246 as well as Section 503 of the Rehabilitation Act (Section 503) and the Vietnam Era Veterans Readjustment Act (VEVRAA). The President’s Order focused exclusively on EO 11246.
EO 11246 prohibited federal contractors and federally‐assisted construction contractors and subcontractors from discriminating in employment on the basis of race, color, religion, sex, sexual orientation, gender identity and national origin. EO 11246 also required federal contractors and subcontractors to take affirmative action to recruit diverse, qualified applicants.
Following issuance of the Order, Acting Secretary of Labor, Vicent Micone, issued Secretary’s Order 03-2025 on January 24, 2025, directing OFCCP to “immediately cease and desist all investigations and enforcement activity under the rescinded Executive Order 11246…” Order 03-2025 applies to all pending compliance reviews, complaint investigations, enforcement actions, and conciliation agreements. The order applies to all Department of Labor employees, including OFCCP, Office of Administrative Law Judges and the Administrative Review Board.
Key Takeaways:
- All pending OFCCP compliance reviews are canceled. All enforcement actions are dismissed. Contractors are not required to comply with the terms of any conciliation agreements or consent decrees in effect on January 21, 2025.
- Repeal of the Executive Order does not affect contractors’ obligations to comply with affirmative action and non-discrimination obligations of Section 503 or VEVRAA. Additionally, contractors are still required to comply with annual VETS-4212 reporting obligations.
- All employers, including contractors, with at least 100 employees, must continue filing annual EEO-1 reports.
Rescission of EO 11246 is only one aspect of the President’s Order. The Order also calls for an end to all “illegal” race- and sex-based preferences under the guise of “diversity, equity, and inclusion” or “diversity, equity, inclusion, and accessibility” that may violate the civil-rights laws. The stated goal of the Order is to “restor[e] merit-based opportunity.” It specifically focuses on eliminating diversity initiatives that preference a specific group based on gender, race, and ethnicity.
Such race, ethnicity and gender-based preferences have always been unlawful under Title VII of the Civil Rights Act and Executive Order 11246. To the extent there was any doubt, the Supreme Court’s 2024 decision in SFFA v. President and Fellows of Harvard College, referenced in the Order, made the it clear that such preferences are unlawful under Title VI and, by extension the employment world. However, initiatives that focus on a cross section of the workforce without regard to race, ethnicity, or gender have always been and still are permissible.
THE PATH FORWARD
Take Action to Minimize Legal Risk. Audit all DEI initiatives to confirm legal compliance.
In an effort to ferret out “illegal” DEI, the Order directs every federal agency to identify up to nine “potential civil compliance investigations” of:
- Publicly traded corporations
- Large non-profit corporations or associations
- Foundations with assets of at least $500 million
- State and local bar associations
- State and local medical associations
- Institutions of higher education with endowments exceeding $1 billion
The purpose of this exercise is to encourage the end of illegal DEI in the private sector through litigation, regulatory action and subregulatory guidance.
Nevertheless, all employers with DEI programs, regardless of whether they fall within the categories above, should conduct a comprehensive review of all current DEI programs and initiatives to confirm that they are in compliance with the President’s Order and current legal precedent. Reviews should be conducted under the attorney-client privilege and results and actions taken, if any, should be documented.
Go Back to Basics
Employers have significant legal leeway to develop creative recruiting strategies that will attract a diverse pool of qualified applicants that does not include gender, race, or ethnicity. For example, consider an internship for first generation college students or a three-month transitional job training program for family caregivers who have been out of the workforce for a period of time. Expand recruiting efforts and professional development opportunities for veterans and individuals with disabilities.
Review job descriptions to confirm that the required qualifications are necessary and job related. Eliminate those qualifications that are not necessary or job-related. This type of analysis could make a greater cross section of a population qualified for the role and add to the overall diversity of the organization. This exercise is a best practice for all employers required to comply with Title VII. Eliminating qualifications that are not job-related or consistent with business necessity reduces the risk of disparate impact claims.
The second Trump Administration hit the ground running. The rescission of the EO 11246 and the laser focus on DEI is just the beginning.
