Disclaimer: This blog post is based on personal opinion as of the published date and is intended for informational purposes only. It does NOT constitute legal advice. Organizations facing questions about specific programs or potential liability should consult a qualified attorney to assess their circumstances.

This week brought major shifts in diversity, equity, and inclusion (DEI) programs and affirmative action under President Trump’s new executive orders. These changes affect federal agencies, contractors, and private businesses, introducing stricter anti-DEI policies, increased legal risks, and uncertain litigation outcomes.

If your organization is involved in federal contracting or has DEI initiatives, it’s time to start preparing for compliance reviews and potential legal challenges. Let’s break it down.

What Is an Executive Action, and Why Does It Matter?

Presidents use executive actions to shape federal policy, but they don’t have unlimited power. These actions must follow legal and institutional rules that keep the government in check. There are three main types of executive actions:

• Executive Orders (EOs): These have the force of law and direct federal agencies to take specific actions.

• Executive Memoranda: These set policies but don’t always carry the same legal weight as executive orders.

• Proclamations: Often symbolic, though they can have legal effects in some cases.

Unlike laws passed by Congress, executive orders don’t need legislative approval, but they can be challenged in court or overturned by future presidents.

The Impact of Trump’s Executive Orders on DEI

The Trump administration has moved quickly to roll back federal DEI initiatives, arguing they undermine merit-based systems. These orders dismantle DEI-focused programs, defund DEI-related grants, and redefine legal definitions of sex and gender. Let’s look at the key changes:

EO 1: Revoking Biden’s DEI Policies

• Cancels 67 Biden-era executive orders, including EO 13985 (Advancing Racial Equity) and EO 14035 (DEI in the Federal Workforce).

• Frames DEI initiatives as “divisive” and claims they harm merit-based systems.

EO 2: Eliminating DEI in Federal Agencies

• Orders the shutdown of all DEI-related offices, grants, and initiatives in federal agencies.

• Requires agencies to track federal contractors who provided DEI training or received DEI funding.

EO 3: Redefining Gender Policies

• Establishes “sex” as strictly biological in all federal policies.

• Requires sex-segregated spaces in federal buildings (e.g., bathrooms, locker rooms based on birth sex).

• Federal IDs and passports will only recognize male and female as assigned at birth.

EO 4: Ending Affirmative Action in Federal Contracting

• Revokes EO 11246 (1965), which mandated affirmative action for federal contractors.

• Requires federal contractors to certify they do not engage in DEI-related preferential hiring.

• Expands False Claims Act (FCA) liability, meaning contractors making false DEI compliance statements could face fraud lawsuits.

How This Affects Federal Contractors and Private Businesses

If your business works with the federal government, these changes could directly impact your hiring and compliance practices. Here’s what you need to know:

• Affirmative action requirements are gone: Federal contractors are no longer required to take affirmative action in hiring.

• New compliance requirements: Companies must certify they do not use DEI-based hiring preferences.

• Legal risks: Organizations that fail to comply or falsely certify could face lawsuits under the False Claims Act.

The Department of Labor has already ordered DEI rollbacks, and enforcement agencies are prioritizing companies with DEI initiatives for audits.

Legal Battles on the Horizon

While these executive orders are now in effect, legal challenges are inevitable. Several lawsuits are already underway on related policy issues, and DEI-focused litigation is expected to follow.

• Schedule F Reinstatement: Lawsuits from states and federal employee unions challenge the classification of thousands of federal employees as political appointees.

• Birthright Citizenship: Courts have blocked Trump’s attempt to end birthright citizenship under the 14th Amendment.

• Federal Grant Pause: Nonprofits and small businesses are suing over the administration’s freeze on DEI-related grants.

These legal fights will take months—if not years—to resolve, but for now, organizations should prepare for a more challenging regulatory landscape.

What Should Your Organization Do Now?

1. Review Hiring and DEI Policies: If your company has DEI hiring initiatives, ensure compliance with new federal requirements.

2. Assess Federal Contracts: Contractors should prepare for new certification requirements and legal risks.

3. Stay Informed: Court challenges could change enforcement priorities, so monitor legal developments closely.

4. Consult Legal Counsel: If your business could be affected, seek guidance to ensure compliance and reduce legal risks.

Final Thoughts

The rollback of DEI programs represents a major shift in federal policy, with significant implications for government contractors, businesses, and institutions nationwide. Whether these executive orders remain in place or face legal setbacks, your company should prepare for increased scrutiny and compliance requirements.

Stay tuned as we track legal developments and how they could reshape the landscape of workplace diversity and inclusion in the coming months.