What to do about DE&I Programs? Breaking Down Trump’s Revocation of Executive Order 11246.
- Brooke Poling
- Jan 28
- 3 min read
On January 21, 2025, the Trump Administration signed an Executive Order (“EO”) entitled “Ending Illegal Discrimination and Restoring Merit Based Opportunity.” The EO revokes Executive Order 11246 of September 24, 1965, which required government contractors to take affirmative action in applying equal employment opportunities. The EO’s purpose is to end “illegal” DE&I programs in the federal government and directs the Office of Federal Contract Compliance Programs to 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.
Impact on Private Employers
Although most of the EO directs actions toward federal contractors, Section 4 is entitled “Encouraging the Private Sector to End Illegal DEI Discrimination and Preferences.” Under Section 4, federal agencies and the Attorney General are ordered to make “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[]” within 120 days of the EO. The forthcoming plan must include:
Key sectors of concern within each agency’s jurisdiction;
The most egregious and discriminatory DEI practitioners in each sector of concern;
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. 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;
Other strategies to encourage the private sector to end illegal DEI discrimination and preferences and comply with all Federal civil-rights laws;
Litigation that would be potentially appropriate for Federal lawsuits, intervention, or statements of interest; and
Potential regulatory action and sub-regulatory guidance.
What Does This Mean for Employers?
Private employers are still required to comply with Title VII of the Civil Rights Act of 1964, which prohibits discrimination based on race, color, sex, religion, or national origin. Otherwise, detailed guidance for maintaining or revising current DE&I programs is not yet available and what constitutes an “illegal” DE&I program has not yet been defined.
However, the Supreme Court’s 2023 decision in Students for Fair Admissions, Inc. v. President and Fellows of Harvard College may offer insight. In Students for Fair Admissions, the Supreme Court ruled that universities could not make race a “determining” factor in admissions decisions. Specifically, Harvard and the University of North Carolina had admission scoring sheets that included race. The Court found that the universities’ scoring mechanisms violated the Equal Protection Clause of the Fourteenth Amendment.
Some large corporations like Costco have refused to pare back their DE&I initiatives. Costco’s board chair, Tony E. James, is quoted as saying “[o]ur commitment to inclusion ... does not and has never included quotas or systematic preferences, nor does it mean compromising merit[.]”[1] James’s mention of Costco’s lack of “quotas or systematic preferences” may be key to tailoring compliant DE&I programs.
Should Employers Get Rid of their DE&I Initiatives?
Not so fast. DE&I initiatives are still valuable to your workforce and bottom line. Diverse workplaces propel innovation and creative thinking, as well as reach into more diverse consumer markets. For example, Costco’s sales rose 7.5% in the most recent quarter, and its net income increased 13% from last year.[2]
Additionally, the EO's Section 4 recommendation report will likely be released in late May. Once additional federal guidance becomes available, it will be easier to revise existing DE&I initiatives. However, now is the time to start reviewing your current programs. What is in place? Are your policies, procedures, and programs compliant with Title VII? What goals are you trying to achieve with your DE&I programs? How are you measuring those goals?
As the government and employers continue redefining DE&I for the workplace, seek guidance from your employment attorney, human resources professionals, and consultants. Optimal Employee Relations is happy to assist you along the way.
[2] Id.
Comments