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Late on the night of January 21, 2025, President Trump signed the “Ending Illegal Discrimination And Restoring Merit-Based Opportunity” Executive Order (the “EO”). This EO, like a number of the executive orders issued on his first day in office, took aim at Diversity, Equity, and Inclusion (“DEI”) programs by, among other things, broadly directing executive agencies and departments to terminate all “discriminatory and illegal preferences, mandates, policies, programs, activities, guidance, regulations, enforcement actions, consent orders, and requirements;” curtailing the Office of Federal Contract Compliance Programs’ (OFCCP) operational authority and directing agencies to scrutinize the DEI practices of private sector employers. Additionally, this language raises questions about the future and status of certain programs, preferences, and set-aside procurements administered by the U.S. Small Business Administration, U.S. Department of Transportation, and other agencies. 

The first portion of the EO rescinds Executive Order 11246 (1965), which established the OFCCP and provided the OFCCP its operational authority to ensure the compliance with anti-discrimination laws by federal contractors. The EO specifically orders the OFCCP to immediately cease promoting “diversity”, enforcement of “affirmative action” and “allowing or encouraging Federal contractors and subcontractors to engage in workforce balancing based on race, color, sex, sexual preference, religion, or national origin.” It states that federal contractors “may – not “must” –  continue complying with the existing regulatory scheme for ninety (90) days after January 21, 2025. The impact of the EO on pending compliance reviews, complaint investigations, or other enforcement activities is as yet unknown. 

Significantly for federal contractors, the EO directs agencies to include in all contract or grant awards a provision requiring contractors to certify that they do not operate any programs promoting DEI “that violate any applicable Federal anti-discrimination laws” and that compliance with applicable federal anti-discrimination laws is material for payment; non-compliance falls under 31 U.S.C. 3729(b)(4), “False Claims.” Federal contractors should expect to see contractual language implementing this directive in new procurements and modifications to existing contracts.

The second portion of the EO focuses on DEI programs in the private sector. Specifically, the EO directs agency heads to submit reports within one hundred and twenty (120) days identifying:

  • Key sectors within each agency’s jurisdiction;
  • Private sector companies with the most “egregious and discriminatory” DEI programs;
  • A plan to deter DEI programs “that constitute illegal discrimination or preferences.” As part of the plan, agencies are directed to identify up to 9 potential investigations of publicly traded corporations, large non-profit corporations or associations, foundations with assets over $500M, state and local bar and medical associations, and universities with endowments over $1B;
  • Litigation that would be potentially appropriate for Federal lawsuits, intervention, or statements of interest; and
  • Potential regulatory action and sub-regulatory guidance.

Significantly, the EO is directed at DEI programs and practices that violate federal anti-discrimination laws—not all DEI efforts. The lawfulness of DEI programs and practices within the private sector is still determined by the applicable statutes, e.g., Title VII of the Civil Rights Act, and the case law interpreting the statutes. That said, given the increased scrutiny that is expected to flow from this EO, federal contractors and non-federal contractors alike should review their DEI policies and practices for compliance with existing law and consult with counsel as needed.

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Photo of Peter J. Eyre Peter J. Eyre

Peter J. Eyre is a partner and co-chair of Crowell & Moring’s Government Contracts Group. He is also a member of the firm’s Management Board. Peter was named to BTI Consulting Group’s list of “Client Service All-Stars” in 2016, 2017, and 2019 and…

Peter J. Eyre is a partner and co-chair of Crowell & Moring’s Government Contracts Group. He is also a member of the firm’s Management Board. Peter was named to BTI Consulting Group’s list of “Client Service All-Stars” in 2016, 2017, and 2019 and has been named an Acritas Star, Acritas Stars Independently Rated Lawyers (2016, 2017, 2019). He is nationally ranked by Chambers USA in Government Contracts since 2014, and by Super Lawyers since 2017.

Photo of Kris D. Meade Kris D. Meade

Kris D. Meade is co-chair of Crowell & Moring’s Labor & Employment Group. He is also a member of the firm’s Management Board and Executive Committee. He counsels and represents employers in the full range of employment and traditional labor law matters, including…

Kris D. Meade is co-chair of Crowell & Moring’s Labor & Employment Group. He is also a member of the firm’s Management Board and Executive Committee. He counsels and represents employers in the full range of employment and traditional labor law matters, including individual and class action lawsuits filed under Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, ERISA, and companion state statutes. Kris represents employers in connection with union organizing campaigns, collective bargaining, labor arbitrations, and unfair labor practice litigation. In 2020, Chambers USA recognized Kris as a leading labor and employment lawyer.

Photo of Amy Laderberg O'Sullivan Amy Laderberg O'Sullivan

Amy Laderberg O’Sullivan is a partner in the firm’s Washington, D.C. office, a member of the Steering Committee for the firm’s Government Contracts Group, and former chair of the firm’s Diversity Council. Her practice involves a mix of litigation, transactional work, investigations, and

Amy Laderberg O’Sullivan is a partner in the firm’s Washington, D.C. office, a member of the Steering Committee for the firm’s Government Contracts Group, and former chair of the firm’s Diversity Council. Her practice involves a mix of litigation, transactional work, investigations, and counseling for corporate clients of all sizes and levels of experience as government contractors. On the litigation side, she has represented corporate clients in bid protests (agency level, GAO, ODRA, Court of Federal Claims, Court of Appeals for the Federal Circuit, as well as state and local bid protests in numerous jurisdictions), size and status protests before the U.S. Small Business Administration, claims litigation before the various Boards of Contract Appeals, Defense Base Act claims litigation at the Administrative Law Judge and Benefits Review Board levels, civil and criminal investigations, and she has been involved in complex commercial litigation.

Photo of Rebecca Springer Rebecca Springer

Rebecca Springer joined Crowell & Moring in 1999 and currently serves as partner in the Labor & Employment Group. Her practice focuses on labor and employment litigation and counseling, particularly in the area of Office of Federal Contract Compliance Programs (OFCCP) compliance. Rebecca…

Rebecca Springer joined Crowell & Moring in 1999 and currently serves as partner in the Labor & Employment Group. Her practice focuses on labor and employment litigation and counseling, particularly in the area of Office of Federal Contract Compliance Programs (OFCCP) compliance. Rebecca has extensive experience conducting audits of personnel practices, preparing Affirmative Action Plans, and counseling clients on affirmative action issues. She also has experience conducting statistical analyses of compensation and other personnel practices for purposes of class action litigation, OFCCP compliance audits, and employer self-audits, and frequently teams with labor economists to analyze compensation and advise clients on potential risks and proactive measures to address compensation disparities.

Photo of Katie Erno Katie Erno

Katie Erno is a counsel in Crowell & Moring’s Labor & Employment Group. Katie represents companies in a wide range of complex commercial disputes, with a focus on employment litigation and counseling.

Specifically, Katie litigates a variety of wage and hour claims, class…

Katie Erno is a counsel in Crowell & Moring’s Labor & Employment Group. Katie represents companies in a wide range of complex commercial disputes, with a focus on employment litigation and counseling.

Specifically, Katie litigates a variety of wage and hour claims, class actions, discrimination and harassment claims, shareholder disputes, and issues related to corporate governance. She has deep experience in all stages of litigation, from drafting and challenging complaints, fact and expert discovery, drafting and arguing discovery and dispositive motions, trial, and appeals. Her cases range from single-plaintiff disputes to class actions and complex litigation involving large liability exposure in the context of high-profile bankruptcies. Katie enjoys learning the intricacies of her clients’ businesses and tailors her litigation approach with her clients’ ultimate business objectives in mind.