What Federal Contractors Need to Know About President Trump’s Anti-Discrimination Order
On January 21, President Donald J. Trump issued a new Executive Order titled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” that formally rescinds President Lyndon B. Johnson’s Executive Order 11246, as well as other executive orders.
Since 1965, Executive Order 11246 prohibited federal contractors from discriminating against applicants and employees on the basis of various protected characteristics, including race and sex, and requires federal contractors to “take affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to their race, color, religion, sex, sexual orientation, gender identity, or national origin.” The order has been a key legal authority used to promote diversity and reduce bias among federal contractors via the implementation of affirmative action plans (AAPs) and other measures.
Following the issuance of the new Executive Order, Acting Secretary of the U.S. Department of Labor Vincent N. Micone III on January 24 directed all DOL workers — including the Office of Federal Contract Compliance Programs, or OFCCP, which enforced Executive Order 11246 — to abandon all pending cases, conciliation agreements, investigations, complaints and "any other enforcement-related or investigative activity” under the rescinded Executive Order 11246 and the regulations promulgated thereunder.
Under President Trump's Executive Order, there is a 90-day period during which federal contractors "may continue to comply with the regulatory scheme in effect" under Executive Order 11246. That means federal contractors may continue to comply with OFCCP regulations with respect to Executive Order 11246, including affirmative action requirements, through April 20, 2025.
Effect on VEVRAA and Section 503
The impact of the new Executive Order with respect to employment initiatives applicable to veterans and individuals with disabilities is less than clear. The Executive Order does not address Section 503 of the Rehabilitation Act, which governs individuals with disabilities, or the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA), which governs protected veterans.
However, some of the language in the Executive Order purports to reach broader than the scope of Executive Order 11246, including the directive that OFCCP shall immediately cease “[h]olding Federal contractors and subcontractors responsible for taking ‘affirmative action’.” Notably, this broad language concerns what the OFCCP can or cannot do from an enforcement perspective, and not what a federal contractor is required to do under VEVRAA or Section 503. Consistent with this, part of Micone’s order also directed OFCCP to notify parties subject to pending reviews or investigations that “the Section 503 and VEVRAA components of the review or investigation are being held in abeyance pending further guidance.” (emphasis added).
As currently worded, President Trump’s Executive Order does not impact a federal contractor’s obligations under VEVRAA or Section 503. Such obligations stem from statutes, and not an executive order capable of being rescinded by the President via a subsequent executive order.
Indeed, while not specifically addressing Section 503 (or VEVRAA), the Executive Order does specifically state that it “does not apply to lawful Federal or private-sector employment and contracting preferences for veterans of the U.S. armed forces . . . .” The OFCCP’s website also states that “[r]equirements under Section 503 of the Rehabilitation Act, 29 U.S.C. 793, and the Vietnam Era Veterans' Readjustment Assistance Act (VEVRAA), 38 U.S.C. 4212, both enforced by OFCCP, are statutory and remain in effect.”
Based on all of this, it appears that, at least currently, contractors and subcontractors should still comply with the requirements under VEVRAA and Section 503, including the affirmative action plan requirements.
Diversity, Equity and Inclusion (DEI)
President Trump’s new Executive Order requires that a contractor or subcontractor “certify that it does not operate any programs promoting Diversity, Equity and Inclusion (DEI) that violate any applicable federal anti-discrimination laws.” (emphasis added). The Executive Order also directs the Attorney General 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.” Given these directives, all employers should evaluate the sustainability of DEI initiatives given the new Executive Order.
At this juncture, the full impact of the new Executive Order is unclear. However, we want to make you aware of the new mandate as you implement and evaluate employment practices and plan for affirmative action compliance. Hopefully, the agencies impacted by the Executive Order will issue guidance to assist employers in determining the impact on their operations.
Please contact Karleen J. Green, Jessica Coco Huffman or any member of the Phelps Labor and Employment team if you have questions or need advice or guidance.
