By Jo Bennett, Partner, CM Law PLLC.
The Acting Secretary of Labor issued an Order late Friday, January 24, directing the Office of Federal Contract Compliance Programs to “cease and desist all investigative and enforcement activity” under regulations that required federal contractors to prepare written affirmative action programs for women and minorities. The Acting Secretary’s Order means that all open reviews or investigations arising under Executive Order 11246, which President Trump rescinded earlier in the week, will be closed.
The Acting Secretary directed OFCCP to notify contractors by January 31, 2025, that the EO 11246 component of the review has closed. The Order affects all pending reviews, conciliation agreements, investigations, complaints, and any other enforcement-related activity.
The Acting Secretary also directed OFCCP to suspend, for now, open reviews and investigations under regulations that prohibit discrimination against veterans and individuals with disabilities. Those regulations arise under statutes passed by the U.S. Congress and were not mentioned in President Trump’s executive order.
The executive order that President Trump issued on Tuesday, January 21, reaffirmed a contractor’s non-discrimination obligations but emphasized that the EO’s purpose was to end “illegal preferences and discrimination.” The Trump EO revoked not only EO 11246 but also other past executive orders that promoted diversity, equity and inclusion in the federal workforce.
In his EO, President Trump signaled that the Administration would be on the lookout for “illegal” DEI programs in the private sector. Private companies will be required to certify in federal contracts that they do not “operate any programs promoting DEI that violate any applicable Federal anti-discrimination laws.” In addition, the Trump EO directs each federal agency, with the assistance of the Attorney General, to submit a proposed strategic enforcement plan to the White House within 120 days identifying:
- “Key sectors of concern”;
- The “most egregious and discriminatory DEI practitioners” in each sector;
- “A plan of specific steps … to deter DEI programs or principles … that constitute illegal discrimination or preferences,” including each agency’s identification of as many as nine potential “civil compliance investigations of publicly traded corporations, large non-profit corporations or associations, foundations with assets of 500 million dollars or more, State and local bar and medical associations, and institutions of higher education with endowments over 1 billion dollars”;
- “Other strategies to encourage the private sector to end illegal DEI discrimination and preferences and comply with all Federal civil-rights laws”;
- Potentially appropriate litigation; and
- Potential regulatory action and guidance.
Despite the hyperbolic language in the Trump EO issued January 21, Executive Order 11246 did not mandate preferences. EO 11246, issued by President Lyndon Johnson in 1965, prohibited employment discrimination by federal contractors and required them to take “affirmative action” to ensure equal employment opportunity. OFCCP does not mandate or enforce quotas or preferences, which have long been illegal under federal anti-discrimination law. A longtime push at the agency has been enforcement of good-faith outreach efforts to ensure “equal access” to job opportunities.
Trump’s EO gives federal contractors latitude to continue to follow the EO11246 regulations until April 21, 2025. The EO states that, “[f]or 90 days from the date of the order, Federal contractors may continue to comply with the regulatory scheme in effect on January 20, 2025.”
Companies that remain committed to ensuring equal employment opportunity need to be vigilant with any DEI initiatives to ensure that those programs comply with anti-discrimination laws. Please contact your CM Law attorney if you have any questions about compliance issues during the Administration’s review period.
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