Remind me, what's an executive order?
Executive orders are instructions purchased by the president of the United States that direct government firms and officials to take particular actions. While they are not laws, they have the force of law and effect how existing laws are implemented or imposed.
Executive orders affect the companies of the executive branch and for that reason do not need the approval of Congress. They need to be within the president's constitutional authority and may be challenged in court if deemed unconstitutional.
Executive orders might be rescinded, reversed by future presidents, or challenged in court, and enforcement top priorities can alter during any administration.
The new administration's actions have significant results beyond executive orders. For more on mitigating risk, international companies can seize brand-new chances by staying active.
Implications of the executive orders for DEI initiatives and employment in private-sector organizations
On Jan. 21, President Trump issued "Ending Illegal Discrimination and Restoring Merit-Based Opportunity," which reverses numerous previous orders and memoranda, including Executive Order 11246 (EO 11246) checked in 1965 by President Lyndon B. Johnson.
EO 11246 required every federal government agreement to include a declaration that the contractor will not victimize 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 stays unchanged for private-sector staff members.
However, the executive order signals that there might be altering enforcement top priorities in the new administration. The order directs all federal agencies to "combat unlawful private-sector DEI preferences, requireds, policies, programs, and activities."
In December 2024, President-elect Trump tapped Harmeet K. Dhillon to lead the Justice Department's civil rights workplace, pointing to his record of "taking legal action against corporations who use 'woke' policies to discriminate versus their workers."
In addition to withdrawing EO 11246, the Jan. 21 executive order advises each company of the federal government to recognize "up to 9 potential civic compliance investigations" of personal sector employment entities within 120 days of the order - by May 21, 2025.
The economic sector entities subject to these examinations include publicly traded corporations, big nonprofits - consisting of bar associations - big foundations, and universities whose endowments surpass US$ 1 billion.
Organizations that may be targeted should ask:
- What is my company's risk tolerance?
- How will workers react to the business's actions?
- How will customers and stakeholders respond?
What in-house counsel should think about:
Assess any federal agreements and grants
- Determine if they contain any terms or conditions associated with DEI that may contravene present laws and regulations
Review your company's existing DEI policies to understand your risk
- Get ready for increased scrutiny and prospective civil compliance investigations
Document, document, file
- Hiring and recruitment processes
- Performance evaluations and promotion choices
- Training products and participation records
- Any modifications to DEI policies
Implications for federal professionals
To name a few steps, the Jan. 21 Executive Order needs the heads of federal companies to consist of specific terms in every agreement or grant award:
- "A term requiring the legal counterparty or grant recipient to concur that its compliance in all respects with all relevant Federal anti-discrimination laws is material to the government's payment choices for functions of section 3729( b)( 4) of title 31, United States Code"
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2025 uS Executive Orders, DEI, and Employment: how In house Lawyers can help the Business
Abbie Cairns edited this page 2 days ago