New Executive Order Revokes Executive Order 11246 and Targets Employer DEI Efforts

January 22, 2025

On Jan. 22, 2025, President Donald Trump issued a new executive order titled “Ending Illegal Discrimination And Restoring Merit-Based Opportunity,” which revoked Executive Order 11246 and directs federal enforcement agencies to target employers’ diversity efforts. Executive Order 11246 imposed federal nondiscrimination and affirmative action employment obligations on covered federal government contractors and subcontractors.

New Executive Order Actions

The new executive order revokes a variety of federal diversity, equity and inclusion (DEI); diversity, equity, inclusion and accessibility (DEIA); and affirmative action federal executive orders and presidential memoranda, including:

  • Executive Order 11246 of Sept. 24, 1965 (Equal Employment Opportunity)
  • Executive Order 13672 of July 21, 2014 (Further Amendments to Executive Order 11478, Equal Employment Opportunity in the Federal Government, and Executive Order 11246, Equal Employment Opportunity)

The new executive order also:

  • Directs that “[t]he Office of Federal Contract Compliance Programs within the Department of Labor shall 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.”
  • Advises that “[f]or 90 days from the date of this order, Federal contractors may continue to comply with the regulatory scheme in effect on January 20, 2025.”
  • Directs the Director of the Office of Management and Budget (OMB), with the assistance of the Attorney General, to:
    • “Excise references to DEI and DEIA principles, under whatever name they may appear, from Federal acquisition, contracting, grants, and financial assistance procedures to streamline those procedures, improve speed and efficiency, lower costs, and comply with civil-rights laws;” and
    • “Terminate all ‘diversity,’ ‘equity,’ ‘equitable decision-making,’ ‘equitable deployment of financial and technical assistance,’ ‘advancing equity’ and like mandates, requirements, programs, or activities, as appropriate.”
  • States that “[i]t is the policy of the United States to protect the civil rights of all Americans and to promote individual initiative, excellence, and hard work. I therefore order all executive departments and agencies (agencies) to terminate all discriminatory and illegal preferences, mandates, policies, programs, activities, guidance, regulations, enforcement actions, consent orders, and requirements. I further order all agencies to enforce our longstanding civil-rights laws and to combat illegal private-sector DEI preferences, mandates, policies, programs, and activities.”
  • Directs the head of each agency to include in every contract or grant award the following language:
    • “A term requiring the contractual counterparty or grant recipient to agree that its compliance in all respects with all applicable Federal anti-discrimination laws is material to the government’s payment decisions for purposes of section 3729(b)(4) of title 31, United States Code.”
    • “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.”

Implications for Federal Contractors

Executive Order 11246, Section 503 of the Rehabilitation Act of 1973 (the Rehabilitation Act), and Section 402 of the Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (VEVRAA) each imposed nondiscrimination and affirmative action obligations on holders of covered federal government contracts and subcontracts.

These obligations are enforced by the Office of Federal Contract Compliance Programs (OFCCP) within the U.S. Department of Labor. OFCCP has authority to proactively audit covered contractor facilities regarding compliance with these obligations, even when there is no individual or class complaint of discrimination.

The new executive order has significant implications for federal contractors and subcontractors covered by this regulatory structure. Of note:

  1. The nondiscrimination requirements of Executive Order 11246 and its affirmative action requirements regarding women and minorities (and OFCCP’s related implementing regulations) are no longer operative. However, as discussed below, nondiscrimination requirements of Title VII and other federal anti-discrimination laws continue to be in effect.
  2. Federal affirmative action, nondiscrimination, and reasonable accommodation requirements regarding disabled individuals and protected veterans remain in place as those obligations emanate from statutes (i.e., the Rehabilitation Act and VEVRAA) that are not subject to executive action.
  3. The new executive order does not alter federal nondiscrimination, non-harassment, and anti-retaliation obligations with respect to race, color, sex, gender, sexual orientation, sexual preference, pregnancy, religion, national origin, age, and disability under Title VII of the Civil Rights Act of 1964, the Equal Pay Act, the Age Discrimination in Employment Act, and the Americans with Disabilities Act.
  4. The revocation of Executive Order 11246 impacts pending and new OFCCP audits — as the agency’s audit jurisdiction is predicated on Executive Order 11246 and its implementing regulations. OFCCP audit requests focus on an employer’s “current” affirmative action plans, and the new executive order provides that contractors “may continue to comply with the regulatory scheme” for now (indicating that compliance is discretionary). Further, the new executive order directs OFCCP to “immediately cease” certain activities related to OFCCP’s audit practices and the agency’s focus on statistical impact.
  5. The new federal contracting/grant compliance requirement (i.e., “compliance in all respects with all applicable Federal anti-discrimination laws”) and certification requirement (i.e., “certify that [the employer/entity] does not operate any programs promoting DEI that violate any applicable Federal anti-discrimination laws”) appear to be subject to enforcement through False Claims Act mechanisms, which presents the risk of costly investigations and the potential for significant liability.

Targeting of Employer DEI Efforts

Even if an employer is not a federal contractor or subcontractor, the new executive order is notable in that:

  • It highlights the Trump administration’s view that many private-sector DEI preferences, mandates, policies, programs, and activities are “illegal” under existing federal civil rights laws.
  • It echoes arguments that many private groups and litigants have asserted in claims over the last few years regarding corporate DEI efforts.
  • It raises the specter that the new administration and its appointees will direct the U.S. Equal Employment Opportunity Commission (EEOC) and other agencies to aggressively investigate “reverse” and other discrimination claims regarding employer DEI activity generally.

For example, the new executive order:

  • Directs the Attorney General over the next 120 days, “in consultation with the heads of relevant agencies and in coordination with the Director of OMB,” to submit a report “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.”
  • States that such a report shall contain a proposed strategic enforcement plan identifying “[a] plan of specific steps or measures to deter DEI programs or principles (whether specifically denominated ‘DEI’ or otherwise) that constitute illegal discrimination or preferences.”
  • Directs that as a part of this plan each federal agency shall identify for enforcement targeting “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.”

Further, new Acting Chair of EEOC Andrea R. Lucas noted in an EEOC press release issued on Jan. 21, 2025:

“I look forward to restoring evenhanded enforcement of employment civil rights laws for all Americans. In recent years, this agency has remained silent in the face of multiple forms of widespread, overt discrimination. Consistent with the President’s Executive Orders and priorities, my priorities will include rooting out unlawful DEI-motivated race and sex discrimination; protecting American workers from anti-American national origin discrimination; defending the biological and binary reality of sex and related rights, including women’s rights to single sex spaces at work; protecting workers from religious bias and harassment, including antisemitism; and remedying other areas of recent under-enforcement.”

Where Can I Learn More?

A copy of the new executive order can be found here:

A copy of the White House’s fact sheet on the new executive order can be found here:

For questions about the new executive order and its implications for OFCCP audits, DEI programming and beyond, please contact the authors, your McGuireWoods contact, or a member of the firm’s affirmative action, labor and employment, or federal contracting teams.


RELATED WEBINAR

Federal Affirmative Action and DEI Update

The End of EO 11246 and Beginning of New Enforcement Targets
January 28, 2025
1-2 p.m. (ET) | 12-1 p.m. (CT) | 10-11 a.m. (PT)

Join a panel of affirmative action and government contracting team members from McGuireWoods for an overview of the new executive order and related legal implications and risks for all.

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