Uncharted Waters: Employers Brace for Significant and Unprecedented Changes to Employment Law Enforcement Under New Administration

As the Trump administration transitioned into power, the White House issued over 25 executive orders in the first days in office addressing a variety of topics including many focused on employment laws. While the flurry of executive orders was more or less expected, the scope of the employment-related orders surpassed that of prior administrations. This alert provides an overview of President Trump’s recent executive order on diversity, equity, and inclusion (DEI) in the federal workforce and private sector, as well as the shift in enforcement priorities for the Equal Employment Opportunity Commission (EEOC). It also outlines certain steps employers can take to adjust to this changing regulatory landscape.

Executive Order on Protecting Civil Rights

On 21 January 2025, in one of his first employment-related actions, President Donald J. Trump issued an Executive Order entitled Protecting Civil Rights and Expanding Individual Opportunity (DEI EO). The DEI EO revokes Executive Order 11246 (EO 11246), issued in 1965 by President Lyndon B. Johnson, which established requirements for nondiscriminatory practices in hiring and employment by federal contractors and required federal contractors to engage in specified affirmative action to ensure equal employment opportunity.¹ Prior to the issuance of DEI EO, covered businesses could not discriminate on the basis of, and were required to take affirmative steps to ensure equal employment opportunity with respect to, race, color, religion, sex, sexual orientation, gender identity, and national origin. In addition to revoking EO 11246, the DEI EO directed the Office of Federal Contract Compliance Programs (OFFCP) to cease doing all of the following: “promoting diversity;” holding federal contractors responsible for taking “affirmative action”; and allowing or encouraging federal contractors to engage in “workforce balancing” based on race, color, sex, sexual preference, religion, or national origin. Further, the DEI EO will require federal contractors to certify in their agreements to federal contracts that they do not operate any programs promoting DEI that violate any applicable federal anti-discrimination laws. The DEI EO provides a safe harbor provision permitting covered federal contractors to continue to comply with EO 11246 for a period of 90 days on a voluntary basis.

Notably, the restrictions for the OFCCP derived from the DEI EO are not directed at ceasing efforts for the benefit of those with veteran status and or recognized disabilities. While the DEI EO proposed sweeping action, it does not address federal contractor requirements under Section 503 of the Rehabilitation Act of 1973, related to affirmative action and nondiscrimination based on disability, or the Vietnam Era Veterans’ Readjustment Assistance Act of 1974, related to affirmative action and nondiscrimination as to protected veterans. Both of those statutes remain in effect, and OFCCP released a public message on 23 January 2025 indicating those will continue to be enforced.

In addition to its directives to federal contractors, the DEI EO encourages the private sector to end “illegal DEI discrimination” and ordered “all agencies to enforce our longstanding civil-rights laws and to combat illegal private-sector DEI preferences, mandates, policies, programs, and activities.” To support enforcement of the private sector mandate, the DEI EO requires the Attorney General, in conjunction with the heads of Executive Branch agencies, to submit a report within the next 120 days containing recommendations for enforcing federal civil-rights laws, “encouraging the private sector to end illegal discrimination and preferences,” including DEI, and identifying up to nine potential civil compliance investigations of publicly traded corporations, large nonprofit corporations or associations, foundations with assets of US$500 million or more, state and local bar and medical associations, and institutions of higher education with endowments over US$1 billion.

Underpinning the DEI EO is the president’s position, as stated in the DEI EO, that employers have adopted and actively used “dangerous, demanding and immoral race-and sex-based preferences under the guise of terms such as diversity; diversity and inclusion; diversity, equity, and inclusion (DEI); or diversity, equity, inclusion, and accessibility (DEIA).” The DEI EO states that “illegal DEI” policies “undermine our national unity, as they deny, discredit, and undermine the traditional American values of hard work, excellence, and individual achievement in favor of an unlawful, corrosive, and pernicious identity-based spoils system.”

A Shift in EEOC Enforcement Priorities

In addition to the sweeping changes under the DEI EO, the new Acting Chair of the EEOC, Andrea Lucas (Acting Chair Lucas), announced on 21 January 2025, the enforcement priorities for the EEOC, which dovetailed with the DEI EO. In the EEOC’s press release, Acting Chair Lucas highlighted that her focus would be “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.” Acting Chair Lucas stated that, in recent years, the EEOC had “remained silent in the face of multiple forms of widespread overt discrimination” and that the agency would work to restore “evenhanded enforcement” of federal civil rights laws. The EEOC is charged with enforcing federal laws that make it illegal to discriminate against a job applicant or an employee because of the person’s race, color, religion, sex, national origin, age (40 years or older), disability, or genetic information.

Looking Ahead

As an initial matter, although significant in ending affirmative action in employment, neither the DEI EO nor the EEOC enforcement priorities change current federal equal employment statutes or the case law interpreting them. While changes in enforcement priorities are expected with a change in presidential administrations, the DEI EO represents a sharp turn in the enforcement of equal employment laws and regulations, specifically that there will be a significant focus on enforcement activities relating to DEI programs that utilize, encourage, or facilitate discriminatory preferences. All employers—covered contractors and private employers alike—should take these legal developments seriously, as it is possible they will be debarred from federal contracting or receive sustained EEOC complaints if they defy these laws and engage in “illegal DEI discrimination.” Currently, federal contractors are required to certify on an annual basis through the OFCCP Contractor Portal that they are meeting their requirements to develop and maintain annual affirmative action programs. It seems likely that this certification will be revised to require covered contractors to certify annually instead that they are not operating programs promoting DEI that violate applicable federal anti-discrimination laws. The certifications, presumably, will still include representations of efforts focused on employment of people with disabilities and veterans.

Among other things, in light of these legal developments, employers can expect an uptick in “reverse discrimination” complaints from both applicants and employees—i.e., claims brought by individuals who are not minorities or otherwise underrepresented in the employer’s workforce—as well as in government investigations. Employers also may experience “discrimination testing” by applicants, if they have not already, where applicants submit multiple resumes with similar education and experience information but varied demographic indicators to see whether applicants with the certain personal characteristics are favored in the employer’s selection process. Employers should ensure that their internal human resource team members are trained on how to properly respond to and investigate such allegations. Employers should also ensure that their talent acquisition team members and hiring managers are trained regarding lawful selection and interviewing criteria. 

The DEI EO contains directives that are substantially distinct from current federal contractor obligations, however, additional guidance is expected in the coming weeks as to how federal contractors should comply. Federal contractors should work with counsel to evaluate existing compliance programs as well as pending audits in the context of the DEI EO. The EEOC’s enforcement priorities dovetail with the DEI EO, and while the DEI EO does not contain a directive for private employers outside of the federal contracting area, it signals that it will seek to eradicate “illegal DEI” in the private sector. Moreover, while the EEOC may also seek to roll back enforcement of rights for transgender and non-binary individuals under Title VII of the Civil Rights Act of 1964, to be in line with the Trump administration’s executive order on sex and gender identity², three of the current Democratic commissioners³ released a statement confirming that, in their view, transgender workers remain protected by federal law.

Although EEOC enforcement priorities will be implemented gradually, all employers should take note regarding the federal government’s new focus, and conduct internal audits of their DEI policies and procedures, especially as to recruitment and hiring (including with respect to internship programs), to ensure they are nondiscriminatory. Further, employers should work with counsel to ensure hiring and retention practices and accommodation and anti-harassment policies comply with applicable law, such as Title VII of the Civil Rights Act of 1964 and the Americans with Disabilities Act, and revise policies that are not in compliance. Employers should keep in mind that various state law requirements under anti-discrimination laws may be contrary to the federal directives in the DEI EO, the Gender EO, and the EEOC enforcement priorities, which will increase uncertainty surrounding compliance. 

As noted above, federal contractors will be required to certify in their government contracts, subject to the False Claims Act, that they do not have any DEI-related programs that violate Title VII. In order to confidently make that certification, employers should ensure that benefits and employment opportunities within the workplace (including mentorship programs, affinity groups/employee resource groups, etc.) are inclusive, open to everyone, and have no exclusions based on race, gender, or other protected class bases. Employers should also ensure that training programs do not include stereotypes or generalizations based on race or gender. Unconscious bias training likely remains permissible (as indicated by OFCCP in the first Trump administration relating to Executive Order No. 13950 (EO 13950)), but employers should ensure that training requirements are applied neutrally across the workforce and such training covers unconscious bias from all angles. 

Notably, the DEI EO includes an express provision indicating that contractors and other entities covered by the DEI EO may continue to engage in First Amendment protected speech. This provision was likely included to help defend against any potential challenge to the DEI EO that would be similar to the challenges to EO 13950 in the prior Trump administration. While there is still much uncertainty around the scope of the DEI EO, it appears to emphasize that its focus is on prohibiting exclusionary or discriminatory practices that violate federal anti-discrimination law—rather than on efforts to change organizational missions or advocacy, which may raise First Amendment concerns. Of course, the scope of what is “illegal DEI” may be more clearly defined as more guidance related to the DEI EO is released in the coming weeks. 

Finally, subject to further guidance from the Executive Branch and EEOC, employers may consider renaming current DEI programs to something more in line with the federal government’s new focus, such as an Equal Employment Opportunity program.⁴ Equal employment opportunity is the touchstone of Title VII and the EEOC’s mission, and is plainly consistent with the EEOC’s own name. 

Conclusion

There are likely to be many more developments in the coming days and weeks. Our Labor, Employment, and Workplace Safety practice can assist with compliance for private employers and federal contractors. Stay tuned for updates as well as more information regarding an upcoming webinar on this topic.