Remind me, what's an executive order?
Executive orders are directives ordered by the president of the United States that direct federal 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 imposed.
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 deemed unconstitutional.
Executive orders may be rescinded, reversed by future presidents, or challenged in court, and enforcement priorities can alter throughout any administration.
The brand-new administration's actions have far-reaching results beyond executive orders. For more on mitigating risk, global organizations can seize brand-new opportunities by remaining active.
Implications of the executive orders for DEI initiatives and employment in private-sector organizations
On Jan. 21, President Trump provided "Ending Illegal Discrimination and Restoring Merit-Based Opportunity," which reverses numerous prior executive orders and memoranda, consisting of Executive Order 11246 (EO 11246) checked in 1965 by President Lyndon B. Johnson.
EO 11246 required every government agreement to consist of a statement that the contractor will not discriminate versus any worker or candidate for employment based upon race, creed, color, or nationwide 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 may be altering enforcement priorities in the new administration. The order directs all federal agencies to "combat unlawful private-sector DEI choices, mandates, policies, programs, and activities."
In December 2024, President-elect Trump tapped Harmeet K. Dhillon to lead the Justice Department's civil rights office, pointing to his record of "suing corporations who utilize 'woke' policies to discriminate versus their employees."
In addition to revoking EO 11246, the Jan. 21 executive order instructs each agency of the federal government to determine "approximately nine potential civic compliance examinations" of personal sector entities within 120 days of the order - by May 21, 2025.
The economic sector entities subject to these investigations consist of publicly traded corporations, large nonprofits - including bar associations - large foundations, and universities whose endowments exceed US$ 1 billion.
Organizations that may be targeted should ask:
- What is my organization's risk tolerance?
- How will employees respond to the company's actions?
- How will clients and stakeholders respond?
What internal counsel needs to believe about:
Assess any federal agreements and grants
- Determine if they include any terms or conditions connected to DEI that might contrast with existing laws and guidelines
Review your organization's existing DEI policies to understand your danger
- Prepare for increased examination and prospective civil compliance investigations
Document, file, document
- Hiring and recruitment processes
- Performance assessments and promotion choices
- Training products and attendance records
- Any modifications to DEI policies
Implications for federal contractors
To name a few procedures, the Jan. 21 Executive Order needs the heads of federal companies to include particular terms in every contract or grant award:
- "A term needing the legal counterparty or grant recipient to agree that its compliance in all respects with all appropriate Federal anti-discrimination laws is product to the government's payment decisions for purposes 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 the Business
Adriene Dyal edited this page 4 months ago