On January 21, 2025, President Trump issued an Executive Order (EO) titled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity.” This new EO is meaningful to all employers, whether or not they have government contracts.

As it relates specifically to federal government contractors and subcontractors, the President’s EO revoked EOs issued by prior administrations that require federal contractors (and subcontractors) to create and monitor affirmative action programs for minorities and females (EO 11246 and EO 13672, which amended EO 11246). President Trump’s EO also gives specific instructions to the Office of Federal Contractor Compliance Programs (OFCCP), which has been responsible for enforcing the previous EOs relating to affirmative action programs for minorities and females, along with affirmative action for veterans and individuals with disabilities. The new EO instructs the OFCCP to immediately stop promoting diversity, requiring affirmative action, or allowing “workforce balancing” based on race, color, sex, sexual preferences, religion, or national origin. It further reinforces that federal contractors and subcontractors cannot consider race, color, sex, sexual preference, religion, or national origin in a way that violates civil rights laws. Note that the EO does not impact the use and enforcement of affirmative action programs related to individuals with disabilities and protected veterans.

The new EO also impacts the terms that will be included in federal contracts and grants. Going forward, those companies entering into federal contracts or grants must certify that they will comply with all anti-discrimination laws and will not operate diversity, equity, and inclusion (DEI) programs that violate such laws. President Trump further directs the Office of Management and Budget (OMB) to make appropriate changes under the new EO and eliminate all references to DEI and DEIA principles from federal acquisition, contracting, grants, and financial assistance procedures.

In addition, the new EO directs heads of federal agencies to take steps to encourage the private sector to end “illegal DEI discrimination and preferences.” Agencies have been instructed to provide the President recommendations for enforcing civil rights laws and ending discriminatory DEI practices. In doing so, the agencies are asked to identify “the most egregious and discriminatory DEI practitioners in each sector of concern,” including “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.”

We are continuing to analyze the impact of this new EO. If you are a federal contractor or subcontractor, as of now, you are no longer required by federal law to implement and comply with affirmative action programs related to minorities and females. If you are required to engage in affirmative action related to veterans and individuals with disabilities, you should continue doing so, as the new EO does not impact those laws. As always, all employers – whether or not you are a federal contractor – should ensure that their policies and programs are compliant with anti-discrimination laws and that their decisions are not based on any protected categories.

If you have any questions, please contact Tami A. Earnhart or any other member of Ice Miller's Workplace Solutions Group.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader must consult with legal counsel to determine how laws or decisions discussed herein apply to the reader's specific circumstances.