On March 19, the Equal Employment Opportunity Commission issued two technical assistance documents related to the Presidential January 2025 Executive Orders on DEI (Diversity, Equity and Inclusion). Check out the statement jointly issued by The Department of Justice and the EEOC. The technical assistance can be accessed here and here.
The guidance contains a reminder of the scope of the Title VII protections which prohibit employment discrimination based on protected characteristics and reiterates the protections should apply equally to all—including individuals who are a part of a “minority group” and “majority group”—eliminating “reverse discrimination” and “higher evidentiary burdens.” Far too many employers defend certain types of race or sex preferences as good, provided they are motivated by business interests in ‘diversity, equity, or inclusion.’ But no matter an employer’s motive, there is no ‘good,’ or even acceptable, race or sex discrimination,” said EEOC Acting Chair Andrea Lucas.
On January 20, 2025, President Trump signed an Executive Order, entitled “Ending Radical and Wasteful Government DEI Programs and Preferencing.” This EO directs the government to terminate “all discriminatory programs, including illegal DEI and “diversity, equity, inclusion, and accessibility” (DEIA) mandates, policies, programs, preferences, and activities in the Federal Government, under whatever name they appear.
To carry out this directive, the Director of OPM, with the assistance of the Attorney General as requested, shall review and revise, as appropriate, all existing Federal employment practices, union contracts, and training policies or programs to comply with this order. One of the directions in the order includes “hear[ing] reports on the prevalence and the economic and social costs of DEI, DEIA, and “environmental justice” in agency or department programs, activities, policies, regulations, guidance, employment practices, enforcement activities, contracts (including set-asides), grants, consent orders, and litigating positions.
On March 14, 2025, the Fourth Circuit Court of Appeals lifted the nationwide injunction on enforcement of the Executive Orders (“EO”) concerning diversity, equity, and inclusion programs. This means the enforcement of the EOs can continue while the legal challenges continue. As a contractor, executive agencies can now seek certifications from contractors and grant recipients regarding Diversity, Equity, and Inclusion (DEI) compliance with federal antidiscrimination laws. You should note the legal consequences, including exposure to False Claims Act liability, when making the required certifications under these orders.
On January 21, 2025, President Trump signed Executive Order 14173 entitled “Ending Discrimination and Restoring Merit Based Opportunity.” This EO essentially eliminated the requirement for federal contractors and subcontractors to maintain affirmative programs and prohibits federal contractors, subcontractors, and grant recipients from maintaining DEI or DEIA Programs. EO 14173 targets “illegal DEI and DEIA” policies. The stated purpose of the EO is “to ensure it [enforces the civil-rights laws] by ending illegal preferences and discrimination.
The EO revoked several prior and long-standing executive orders including Executive Order of September 24, 1965 (Equal Employment Opportunity, Executive Order 13672 of July 21, 1974, further Amendments to Executive Order 11478, Equal Employment Opportunity in the Federal Government, and Executive Order 11246, Equal Employment Opportunity). Executive Order 14173 permitted Federal Contractors to continue to comply with the regulatory scheme in effect on January 20, 2025, roughly until the end of April 2025. It ordered the Office of Federal Contract Compliance to immediately cease promoting diversity and holding federal contractors and subcontractors responsible for “affirmative action,” which would include those “16 steps” outlined in EO 11246. The EO went on to require every contract or grant to include as a material condition of the contract or grant that “compliance all applicable Federal anti-discrimination laws are material to the government’s payment decisions” and “to certify that it does not operate any programs promoting DEI that violate any applicable Federal anti-discrimination laws.”
This certification implicates the False Claims Act and failure to appropriately certify may expose a contractor or subcontractor to liability under either the criminal or civil statues.
EO 14173 also include a direction to the Attorney General to issue a report within 120 days 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.
EO 14173 defined the prohibited conduct as illegal discrimination and preferences, and workforce balancing based on race, color, sex, sexual preference, religion, or national origin. This conduct has long been prohibited under Title VII of the Civil Rights Laws.
Contractors and subcontractors have 90 days to eliminate their DEI programs if they are inconsistent with the EO. What is problematic is that DEI is not well-defined in the EO. Starting April 21, 2025, contractors “shall not consider race, color, sex, sexual preference, religion, or national origin in ways that violate the Nation’s civil rights laws.” Furthermore, contractors, subcontractors, and grant recipients are prohibited from maintaining any DEI programs.
If you are a contractor, you would be well advised to review your affirmative action policies and DEI programs. You should review your internal policies and practices, hiring practices and other policies to ensure they do “not consider race, color, sex, sexual preference, religion, or national origin,” or otherwise potentially violate the new directives contained in these EOs.
On March 14, 2025, another EO was signed titled “Continuing the Reduction of the Federal Bureaucracy.” This eliminated the Community Development Financial Institutions Fund and the Minority Business Development Agency (established 3/5/69 by Nixon by EO 11458). It also reduced funding to the bare minimum required by any statute.
The Community Development Financial Institutions Fund provide funding for many of the bonding and capital access programs that allow MWBE businesses to obtain funding at reasonable rates. Certain of the CDFI programs include Capacity Building Initiative, Bond Guarantee Programs, Small Dollar Loan Program, etc. If you are a small business which has or obtains funding through the CDFI, you should reach out to the financing institution to determine the impact of the EO on your situation.
If you have any questions about registration, please reach out to Lorraine D’Angelo, LDA Compliance Consulting, Inc. by email, lorraine@ldacomplianceconsulting.com or telephone, (914) 548-6369.