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1 2025 United States Executive Orders, DEI, and Employment: how In house Lawyers can Assist Business

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 impact the companies of the executive branch and for that reason do not require the approval of Congress. They need to be within the president's constitutional authority and may be challenged in court if considered unconstitutional.

Executive orders might be rescinded, reversed by future presidents, or challenged in court, and enforcement priorities can alter throughout any administration.

The new administration's actions have significant impacts beyond executive orders. For more on mitigating danger, international services can take brand-new opportunities by staying nimble.

Implications of the executive orders for DEI initiatives and employment in private-sector companies

On Jan. 21, President Trump issued "Ending Illegal Discrimination and Restoring Merit-Based Opportunity," which reverses different previous executive orders and memoranda, including Executive Order 11246 (EO 11246) signed in 1965 by President Lyndon B. Johnson.

EO 11246 required every federal government contract to consist of a declaration that the contractor will not discriminate versus any worker or applicant for work based on race, creed, color, or national origin.

Despite President Trump's brand-new executive order, the underlying federal anti-discrimination law stays the same for private-sector staff members.

However, the executive order signals that there may be altering enforcement priorities in the brand-new administration. The order directs all federal agencies to "combat unlawful private-sector DEI choices, requireds, 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 "taking legal action against corporations who use 'woke' policies to victimize their employees."

In addition to withdrawing EO 11246, the Jan. 21 executive order instructs each agency of the federal government to identify "as much as 9 potential civic compliance examinations" of economic sector entities within 120 days of the order - by May 21, 2025.

The economic sector entities subject to these investigations consist of openly traded corporations, large nonprofits - consisting of bar associations - large structures, employment and universities whose endowments exceed US$ 1 billion.

Organizations that may be targeted should ask:

- What is my organization's risk tolerance?
- How will workers react to the company's actions?
- How will clients and stakeholders respond?
What in-house counsel ought to think about:

Assess any federal agreements and grants

- Determine if they include any terms or conditions connected to DEI that may clash with current laws and policies
Review your organization's existing DEI policies to understand your risk

- Get ready for increased scrutiny and possible civil compliance examinations
Document, document, document

- Hiring and recruitment processes
- Performance examinations and promotion decisions
- Training products and presence records
- Any modifications to DEI policies
Implications for federal professionals

Among other measures, the Jan. 21 Executive Order needs the heads of federal companies to include particular terms in every contract or grant award:

- "A term requiring the contractual counterparty or grant recipient to agree that its compliance in all respects with all applicable Federal anti-discrimination laws is product to the government's payment choices for purposes of area 3729( b)( 4) of title 31, United States Code"