Within days of his second inauguration, President Trump issued a number of Executive Orders. While the impact of his Executive Orders will be seen with time, many employers may be left wondering how the Executive Orders addressing Diversity, Equity, and Inclusion (“DEI”) impact them.
With these new Executive Orders, private employers[1] are justifiably re-evaluating any action they have planned to take to move DEI forward. Private employers need to know two critical factors. First, the recently issued Executive Orders addressing DEI only cover the federal government workforce. Second, an Executive Order cannot replace or contravene statutes enacted by Congress (federal laws), state laws, or Supreme Court precedent. As such, all federal laws, state laws and Supreme Court precedent prohibiting employment discrimination remain intact and unchanged by the recent Executive Orders, and significant changes to internal DEI efforts may result in increased discrimination claims. However, how the federal government enforces such laws and Supreme Court precedent considering the recent Executive Orders is yet to be seen.
While President Trump’s recent Executive Orders addressing DEI apply to the federal workforce and/or federal contractors and subcontractors, they also explicitly put private employers on notice of the administration’s intent to take every action possible to encourage private employers to roll back or eliminate their “illegal” DEI programs and initiatives. In the time leading up to President Trump’s inauguration, and anticipating this wave of change in policy, many large private employers have already either rolled back or rebranded their DEI efforts to avoid the anticipated backlash from the new administration or consumers.
There are several steps private employers may consider to assess whether their DEI programs and policies can withstand any challenges or audits. First private employers should review their internal policies and initiatives to ensure they are in compliance with applicable federal, state and local laws prohibiting employment discrimination. This may involve reviewing and revising any DEI-related programs, training initiatives, or hiring practices to ensure that there are no “illegal DEI . . .mandates, policies, programs, preferences and activities.” This would also include eliminating any specific demographic targets or goals that could be perceived as impermissible quotas. Employers must also ensure that performance evaluations, hiring practices, and advancement opportunities are based on individual merit, skills, and performance, rather than being influenced by achieving diversity targets, goals or mandates. Second, private employers should review applicable state and local DEI-focused laws, as compliance with them remains unchanged by the recent Executive Orders.
Third, private employers should review contracts to determine if they can be interpreted to be a contractor or sub-contractor with the federal government and/or receive federal funding. Until the contracts are amended, there may be a conflict between the contractual obligations and current Executive Orders. In addition, federal grants awarded to advance DEI initiatives, hiring or recruitment will likely be eliminated, such that employers may need to reassess and adjust their efforts to align with the new mandates.
Fourth, private employers should also consider reviewing their relationships with any external vendors or consultants that provide DEI training and related services. The review should include ensuring that any materials, programs, or practices adopted are in compliance with applicable federal, state and local law. In states and localities with their own DEI laws and required materials for mandatory trainings, private employers must continue to comply fully with those requirements.
Finally, employers should stay vigilant regarding potential legal implications and risks associated with their DEI programs. Employers should consult with legal counsel to ensure that their policies and practices remain compliant across all levels based on where they are doing business or have a presence. A proactive approach in addressing these shifts in policy will not only help employers stay within legal boundaries but will also position them as leaders in fostering a workplace that is inclusive and supportive of all employees. In the end, litigation has already been filed challenging some of President Trump’s Executive Orders and more will likely be filed. The impact of these challenges remains to be seen.
What Private Employers Can Do Now:
Continue with Your Current Policies and Practices: President Trump’s Executive Orders addressing DEI only apply to the federal workforce (federal contractors and subcontractors). As such, private employers who do not conduct any business with the federal government may continue with the DEI programs they already have in place, so long as they comply with preexisting federal, state, and local laws.
Create an Inclusive Hiring Pipeline: Evaluate your recruiting strategies to expand your applicant pool. Consider recruiting at historically Black colleges and universities, minority industry groups, or veteran- or disability-focused employment or training programs. Build partnerships with organizations that focus on providing access to talent from underrepresented groups, in addition to your typical talent sources. Recruiting from a broad range of resources is a legally sound approach to creating a pipeline of diverse talent. Make clear that all hiring decisions will be made to select the best-qualified candidate regardless of any protected characteristic.
Carefully Evaluate Affirmative Action Policies and Practices: Given the rescission of EO 11246, private employers with voluntary affirmative action plans should seek more guidance on President Trump’s Executive Orders with regard to their affirmative action programs for job applicants and employees to ensure they remain compliant with legal requirements. In addition, private employers should seek legal guidance to determine what policies and practices should permissibly continue.
Provide Available Resources to All: When implementing mentoring, executive training, and leadership initiatives, ensure that classes or groups of employees are not prohibited from applying or being considered. Employers should be aware of potential reverse discrimination claims when implementing workplace diversity initiatives. Broadly defining diversity to include factors beyond race and sex, such as experience, education, and interests, may help deter such claims.
Recognize that Diversity Goes Beyond EEO-1 Classifications: The Supreme Court in Students for Fair Admissions v. President and Fellows of Harvard College and Students for Fair Admissions v. University of North Carolina noted that diversity does not begin or end with the six noted EEO-1 race classifications (Caucasian, Native Hawaiian or other Pacific Islander, American Indian or Native Alaskan, Asian, Hispanic or Latino, Black or African American). Indeed, President Trump’s Executive Orders addressing DEI do not appear to eliminate diversity efforts designed to promote veterans and workers with disabilities. Employers’ DEI efforts can champion these and other nontraditional aspects of diversity, such as diversity of thought, opinion, culture, geographic location, neurodiversity, languages, religion, national origin, citizenship status, ethnicity, gender identity, morals and more. Consideration of the intersectionality of all aspects of diversity remains legal and key to ensuring an inclusive workforce. It is important to reiterate that all DEI discussions must adhere to your company’s antiharassment and antidiscrimination policies. Consider engaging a skilled facilitator to guide the conversation respectfully and suitably.