Remind me, what's an executive order?
Executive orders are directives ordered by the president of the United States that direct government companies and officials to take specific actions. While they are not laws, they have the force of law and effect how existing laws are implemented or enforced.
Executive orders affect the agencies of the executive branch and for that reason do not require the approval of Congress. They must be within the president's constitutional authority and employment might be challenged in court if deemed unconstitutional.
Executive orders may be rescinded, reversed by future presidents, or challenged in court, and enforcement priorities can change during any administration.
The brand-new administration's actions have significant impacts beyond executive orders. For more on mitigating danger, worldwide organizations can seize brand-new chances by remaining nimble.
Implications of the executive orders for DEI initiatives and employment in private-sector companies
On Jan. 21, President Trump provided "Ending Illegal Discrimination and Restoring Merit-Based Opportunity," which reverses various previous executive orders and memoranda, including Executive Order 11246 (EO 11246) checked in 1965 by President Lyndon B. Johnson.
EO 11246 needed every government agreement to consist of a declaration that the contractor will not discriminate versus any employee or candidate for work based on race, creed, color, or national origin.
Despite President Trump's new executive order, the underlying federal anti-discrimination law remains unchanged for private-sector employees.
However, the executive order signals that there might be changing enforcement top priorities in the new administration. The order directs all federal firms to "combat illegal private-sector DEI preferences, mandates, policies, programs, and activities."
In December 2024, President-elect Trump tapped Harmeet K. Dhillon to lead the Justice Department's civil liberties office, indicating his record of "suing corporations who utilize 'woke' policies to victimize their workers."
In addition to revoking EO 11246, the Jan. 21 executive order instructs each company of the federal government to determine "up to nine prospective civic compliance investigations" of private sector entities within 120 days of the order - by May 21, 2025.
The economic sector entities based on these investigations include publicly traded corporations, big nonprofits - including bar associations - big foundations, and universities whose endowments surpass US$ 1 billion.
Organizations that may be targeted should ask:
- What is my company's danger tolerance?
- How will staff members react to the business's actions?
- How will clients and stakeholders react?
What internal counsel ought to consider:
Assess any federal agreements and grants
- Determine if they include any terms or conditions associated with DEI that might conflict with current laws and policies
Review your company's existing DEI policies to understand your danger
- Prepare for increased analysis and possible civil compliance investigations
Document, document, document
- Hiring and recruitment procedures
- Performance evaluations and promotion decisions
- Training materials and attendance records
- Any modifications to DEI policies
Implications for federal specialists
Among other measures, the Jan. 21 Executive Order requires the heads of federal companies to include particular terms in every agreement or grant award:
- "A term requiring the contractual counterparty or grant recipient to concur that its compliance in all aspects with all relevant Federal anti-discrimination laws is material to the federal government's payment decisions for functions of area 3729( b)( 4) of title 31, United States Code"
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2025 United States Executive Orders, DEI, and Employment: how In house Lawyers can Assist Business
Abbie Cairns edited this page 1 month ago