Labor & Employment Developments Blog

Significant attention has been given to President Trump’s actions regarding Diversity, Equity, and Inclusion (DEI) programs and policies, but the impact of those actions on private sector employees has not been clear. On his first two days in office, President Trump signed multiple executive orders addressing the use of DEI programs in government. One order, Executive Order 14151: Ending Radical and Wasteful Government DEI Programs and Preferencing, directed executive agencies to terminate all DEI offices, positions, plans, initiatives, or similar programs. Another order, Executive Order 14173: Ending Illegal Discrimination and Restoring Merit-Based Opportunity, directed all executive departments and agencies to terminate any discriminatory or unlawful preferences, mandates, policies, programs, activities, guidance, regulations, enforcement actions, consent orders, and requirements. President Trump took this action citing his administration’s position that such policies violate the text and spirit of longstanding federal civil rights laws.

As a part of Executive Order 14173, President Trump rescinded Executive Order 11246, originally issued in September 1965, which required federal contractors to implement specific affirmative action plans. Compliance with Executive Order 11246 has been a standard requirement in federal contracts for decades. However, believing these programs have been applied in ways that violate civil rights laws, President Trump repealed the mandate for federal contractors to maintain such programs. He also directed the Office of Federal Contract Compliance Programs within the Department of Labor to stop enforcing affirmative action requirements for federal contractors and subcontractors.

Although executive orders primarily apply to federal agencies, their impact extends to the private sector. President Trump’s orders are not based on new legislation, but rather on his administration’s interpretation that DEI and affirmative action programs may violate existing civil rights laws in the way they are implemented. While the president lacks the authority to prohibit private companies from maintaining DEI programs, his administration holds that, just as these initiatives violate the law within federal agencies, they may also do so in private-sector organizations.

Accordingly, President Trump directed agency heads to prepare reports identifying key areas of concern within their jurisdictions and assessing how private-sector DEI programs may violate existing law. He has asked agencies to identify up to nine potential civil compliance investigations targeting publicly traded corporations, large nonprofit organizations, foundations with assets exceeding $500 million, state and local bar and medical associations, and higher education institutions with endowments over $1 billion. If DEI programs are found to operate in a manner the administration believes is unlawful, agencies have been instructed to develop strategies to challenge them, potentially through litigation.

Following this directive, Attorney General Pamela Bondi has already issued an internal memorandum within the Department of Justice titled Ending Illegal DEI and DEIA Discrimination and Preferences. This memo directs the DOJ’s Civil Rights Division to investigate, eliminate, and penalize illegal DEI and DEIA preferences, mandates, policies, programs, and activities in the private sector and in educational institutions that receive federal funds.  How these actions will be carried out are, at this point, unclear. The memo directs the Civil Rights Division and the Office of Legal Policy to jointly submit a report by March 1, 2025 detailing how the agency will approach investigating DEI initiatives in the private sector, which should provide guidance to employers on how to navigate these issues. For now, the DOJ’s memorandum specifically provides that it is directed at programs, initiatives, or policies that discriminate, exclude, or divide individuals based on race or sex.  It does not prohibit educational, cultural, or historical observances—such as Black History Month, International Holocaust Remembrance Day, or similar events—that celebrate diversity, recognize historical contributions, and promote awareness without engaging in exclusion or discrimination. 

Ultimately, whether DEI programs violate civil rights laws will be determined by the courts based on a fact-intensive review of each specific program. Agency employees and federal contractors directly impacted by the President’s order have already sought relief from the judiciary, and those challenges are making their way through the courts. As of now, DEI programs are not inherently unlawful, and private employers may continue promoting diversity within their organizations. However, given the administration’s focus on scrutinizing these initiatives and pursuing legal challenges, employers should ensure their DEI efforts are not pursued in a way which may violate applicable state and federal laws, or invite claims of exclusion. The KMK Labor & Employment team is available to assist employers in fostering a diverse workforce while maintaining legal compliance.