DEI Shake-Up: What President Trump’s Executive Order Means for Your Business

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ICYMI, President Trump has issued an Executive Order titled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity.” This order aims to eliminate illegal discrimination and preferences based on race and sex in federal policies and practices, with significant implications for private businesses. Here’s what human resources professionals, employment lawyers, and business owners need to know about it:

Termination of Illegal DEI Practices

The Executive Order mandates that all federal agencies take action to end illegal diversity, equity, and inclusion (DEI) practices in the private sector. This means businesses must ensure their DEI programs do not violate federal civil rights laws. The order specifically targets DEI practices prioritizing race or sex over individual merit, aptitude, and hard work.

Compliance and Enforcement

The heads of all federal agencies, with the assistance of the Attorney General, are tasked with enforcing federal civil rights laws and combating illegal DEI practices in the private sector. This enforcement includes identifying key sectors of concern, the most egregious DEI practitioners, and specific steps to deter DEI programs that constitute illegal discrimination or preferences. Agencies are also required to identify potential civil compliance investigations of large corporations, non-profits, foundations, bar and medical associations, and institutions of higher education.

Impact on Federal Contractors and Grants

The order revokes previous executive orders that promoted diversity and inclusion in federal contracting. Federal contractors and subcontractors must now strictly comply with civil rights laws and are prohibited from balancing their workforces based on race, color, sex, sexual preference, religion, or national origin. Additionally, businesses receiving federal grants must certify that their DEI programs do not violate anti-discrimination laws.

Takeaways for Employers

  1. Review and Revise DEI Programs: Ensure your DEI initiatives comply with federal civil rights laws and do not prioritize race or sex over individual merit and aptitude.
  2. Prepare for Compliance Investigations: Be ready for potential civil compliance investigations by federal agencies, especially if your business is a large corporation, non-profit, or educational institution.
  3. Understand New Contracting Requirements: If your business is involved in federal contracting or receives federal grants, you must certify that your DEI programs do not violate anti-discrimination laws and comply strictly with civil rights laws. Additionally, federal contractors should anticipate updates to compliance obligations and be prepared to adjust practices accordingly.

President Trump’s Executive Order on DEI represents a significant shift in federal policy, emphasizing merit-based opportunities and strict compliance with civil rights laws. As the Department of Justice and other federal agencies develop enforcement strategies, stay abreast of potential investigations or compliance checks that could affect your organization. Indeed, staying informed and proactive will be crucial for navigating these changes.

“Doing What’s Right – Not Just What’s Legal”
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