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On January 20 and 21, 2025, President Trump issued two executive orders about employment practices in private sector organizations. The orders do not change existing law, create new law or change legal or compliance obligations for private sector employers, including federal contractors. 

Executive Order 14173 relates to DEI programs or activities that reflect unlawful discriminatory preferences favoring employees on the basis of race, sex or other protected characteristics (the DEI Order). The Order makes an explicit exception for lawful employment and contracting preferences given to veterans.  

The DEI Order does not ban DEI programs or training or make these activities illegal. 

Executive Order 14168 provides that for purposes of Executive Branch interpretation and application of federal law and policy, the term sex refers to “an individual’s immutable biological classification as either male or female” and “does not include the concept of ‘gender identity’” (the Gender Identity Order). The order appears to conflict with existing federal law. In a 2020 decision, the Supreme Court held that workplace discrimination on the basis of gender identity or sexual orientation is discrimination on the basis of sex and thus violates Title VII. 

The Gender Identity Order does not bar employers from providing harassment prevention or other training that covers gender identity issues.  

Impacts of executive orders 

For most private sector employers, the impact of the DEI Order is that it directs the Attorney General to come up with an enforcement strategy to address discriminatory private sector DEI programs.  

For federal contractors, there are two additional impacts. One, the DEI Order ended the requirement that contractors maintain affirmative action programs to advance minorities and women. And two, the order requires contractors to certify that they do not have discriminatory DEI programs, as a condition of payment. 

The Gender Identity Order directs agencies to enforce laws in a way that will “protect men and women as distinct biological sexes.” But the order states that any enforcement will be done in compliance with existing law. 

What should employers do now? 

While these executive orders do not impose new legal obligations on private sector employers, they signal a shift in enforcement priorities. Employers should take proactive steps to ensure compliance with existing laws while also aligning their workplace policies with best practices that promote inclusivity and minimize legal risk. 

Review DEI programs and activities to make sure they do not contain discriminatory elements or give discriminatory preferences 
There is uncertainty as to what types of activities the Administration will view as discriminatory. However, Andrea Lucas, the new Acting Chair of the EEOC, published a 2023 article that may give some insight. In the article, Lucas cites as potentially discriminatory DEI activities: 

  • Providing race-restricted access to mentoring, sponsorship or training programs 
  • Selecting interviewees partially due to diverse candidate slate policies 
  • Tying executive or employee compensation to the company achieving demographic targets 
  • Offering race-restricted diversity internship programs or accelerated interview processes 

Provide inclusivity training that is premised on antidiscrimination principles 
Research shows that diverse organizations achieve better financial results, employees would prefer to join an inclusive organization. Meanwhile a lack of diversity drives employee turnover. Employers can gain the benefits of having a more inclusive workplace without running the risk of engaging in discriminatory DEI practices that the DEI Order targets by showing employees and managers how to identify and avoid, for example, unconscious bias or noninclusive language. 

Provide harassment prevention training that covers gender identity harassment and discrimination 
Under numerous federal court decisions and state and local laws, employers must still provide harassment prevention training. Under state requirements, training must include information on gender identity and examples of gender identity harassment. Separate from requirements, employees may be confused about whether the Gender Identity Order changed the law and about what harassment is and is not. To minimize the risk of harassing conduct happening in their organizations and to lessen the related liability, it’s essential that employers provide up to date and accurate harassment prevention training to employees. 

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