On January 20 and 21, 2025, President Trump signed two Executive Orders with significant impact on Diversity, Equity, and Inclusion (DEI) practices in federal employment, government contracting, and the private sector. These orders reflect the administration's view that DEI initiatives violate civil rights laws following the 2023 Supreme Court ruling in Students for Fair Admission v. Harvard, which struck down race-based affirmative action in college admissions. These Executive Orders require the application of “merit-based” standards for hiring and promotion and have upended federal employment practices and sent shockwaves through the private sector and higher education as well. Here are some highlights.
Key Provisions of the Executive Orders:
1. Ending DEI Programs in Federal Agencies: The first Executive Order, “Ending Radical and Wasteful Government DEI Programs and Preferencing,” mandates that all federal agencies, departments, and commissions eliminate DEI offices, positions, and programs within 60 days. This includes diversity training, race-based hiring or promotion practices, and other DEI-related initiatives. Federal agencies will be required to adopt strictly merit-based policies, focusing on qualifications and performance rather than race or gender.
2. Restricting DEI in Federal Contracting and Cautioning the Private Sector: The second order, “Ending Illegal Discrimination and Restoring Merit-Based Opportunity,” prohibits the federal government from awarding contracts to private companies that engage in DEI hiring practices and requires all government contracts certify that the contractor does not engage in any DEI programs. It also encourages private employers to review and potentially eliminate DEI policies. The order directs the Attorney General, Office of Management and Budget, and federal agencies to identify companies with the most egregious DEI practices for investigation. Additionally, it requires new guidance for state, local, and higher education institutions receiving federal funds to ensure compliance with the Harvard decision. Several long-standing Executive Orders that supported DEI, including a 1964 order banning discrimination in federal contracting, have been revoked.
3. Importantly, these two Executive Orders do not apply to preferences for military veterans and disabled individuals.
Implications for Employers and Employees
1. Federal Agencies: Federal agencies must dismantle DEI offices and halt any race- or gender-based hiring, promotion, or training initiatives. This shift will require agencies to implement merit-based policies and ensure diversity efforts are non-race- or gender-specific. Federal employees working in DEI programs or overseeing such initiatives will be directly impacted by these changes.
2. Federal Contractors: Government contractors must align their hiring and promotion practices with merit-based standards, removing any DEI-related goals or programs. Contractors that fail to comply could risk losing federal contracts or facing legal challenges, which underscores the importance of revising employment strategies to meet these new mandates.
3. Private Sector: While the orders apply directly to federal agencies and contractors, they also strongly encourage private sector employers to reconsider DEI programs that could be seen as discriminatory. The Department of Justice’s Civil Rights Division is expected to investigate and potentially penalize companies that maintain race- or gender-based preferences in hiring, training, or promotions. This could create pressure on private sector companies to adopt race-neutral diversity practices to avoid legal scrutiny. Private sector employers will need to review and potentially revise their hiring and promotion strategies to ensure compliance with new mandates.
Impact:
Daily reports of the impact of these Executive Orders are available in all news media and reflect the chaos they have injected into established DEI practice. Legal challenges have been filed and are ongoing in the federal courts.
For example, on February 3, 2025, multiple organizations, including the National Association of Diversity Officers in Higher Education, filed a lawsuit against President Trump’s administration in the District of Maryland, seeking to block the Executive Orders. The court issued on preliminary injunction on February 21, which temporarily blocks (1) the provision requiring that agencies terminate DEI-related contracts or grants, (2) the provision requiring all government contracts certify that no DEI programs are used by the contractor, and (3) the provision directing the Attorney General to deter the private sector from engaging in DEI practices, including identifying civil compliance investigations. Under the preliminary injunction, only the provision authorizing the Attorney General to prepare a specific report and conduct related investigations remains effective.
There are additional lawsuits pending in federal court on this issue. A lawsuit was filed in the District of D.C. by the NAACP Legal Defense Fund and Lambda Legal on behalf of several civil and human rights organizations challenging these two Executive Orders, among others. The National Council of Nonprofits, with other groups, also filed suit in the District of D.C. This lawsuit challenges a memorandum issued by theOffice of Management and Budget requiring every federal agency to temporarily pause any activity that may be implicated by the DEI Executive Orders and other related Executive Orders.
These legal challenges will likely delay the full implementation of the Executive Orders, and their outcome may set important precedents for future cases involving DEI policies in both the public and private sectors. Meanwhile, the government appears to be following this edict through the newly established Department of Government Efficiency (DOGE), which is overseeing enforcement and issuing directives to various federal agencies. We can anticipate more lawsuits as the attack on DEI by the new administration continue through the actions of DOGE and otherwise.
Next Steps for Employers and Employees:
With DEI under attack by the new administration, organizations are taking steps to address the federal edict. In particular, employers in the federal sector are reviewing their DEI practices to ensure compliance with these new directives. Government contractors also are squarely within the ambit of the Executive Orders. Private sector employers without government contracts may also want to reassess their DEI strategies to mitigate legal risks given the threat of Department of Justice Civil Rights Division investigation and potential imposition of penalties against companies that maintain race- or gender-based preferences in hiring, training, or promotions. Employees can expect changes to workplace diversity policies in government agencies and contracting firms as well as other organizations in the private sector, but there appear to be workplaces where DEI initiatives will continue unchanged.
Employers and employees should closely monitor legal developments in the coming months, as the full impact of these Executive Orders will continue to unfold.
For assistance navigating these changes and for advice on compliance with the Executive Orders and any court orders issued in the litigation which has ensued, please reach out to the Berke-Weiss Law team for guidance.
