


Q I saw on the news that President Donald Trump issued executive orders banning Diversity, Equity, and Inclusion programs. What do these orders mean? Do they impact private sector employers?
A During his first week in office, President Trump issued several executive orders aimed at ending the use of DEI initiatives in hiring. Most of these orders are aimed at federal hiring practices or other public employers and do not have a direct impact on private sector employers. However, on Jan. 21, President Trump also issued Executive Order 11473, entitled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” (the “DEI Order”), which impacts private sector employers who are federal government contractors or federal grant recipients.
The DEI Order is largely aimed at ending the use of affirmative action in hiring programs — often referred to as DEI initiatives — by federal contractors. Section 3 of the DEI Order directs the federal government to cease DEI initiatives in federal contracting. It also requires future federal government contractors or federal grant recipients to certify they will not use any programs or policies that violate any of President Trump’s DEI orders.
The DEI Order also attempts to directly shape the DEI policies of all other private sector employers. Section 4 of the DEI Order specifically encourages private sector employers to cease their DEI initiatives. Though it falls short of any particular mandates, it directs the federal government to develop a plan for “advanc(ing) in the private sector” the policies of the DEI Order — i.e., to end the use of DEI and other affirmative action initiatives. Section 4 directs the Attorney General to prepare a report for the White House outlining their concerns regarding the use of DEI initiatives in the private sector and to develop a “plan of specific steps or measures to deter DEI programs or principles.” The DEI Order identifies “litigation,” “civil compliance investigations” and “regulatory action” as potential strategies for encouraging private sector compliance with the DEI Order.
As written, nothing in the DEI Order requires private employers to pause or discontinue their policies aimed at promoting diversity in hiring — at least to the extent an employer is not a federal contractor or grant recipient. But the DEI Order’s potential implications are broad and far reaching. For example, the definition and scope of “DEI” initiatives which could be subject to the DEI Order is unclear and is already the subject of debate. The DEI Order also characterizes DEI initiatives as “illegal” and identifies private sector corporations as entities that have wrongly implemented such programs.
Given its breadth and potential implications, the DEI Order has (like many other Trump Administration executive orders) been challenged in federal court. On Feb. 3, the City of Baltimore and several other organizations sued the federal government in Maryland federal court, arguing that the DEI Order is unconstitutional. This case remains pending and employers should stay tuned for further developments in the case, particularly any future court orders halting enforcement of the DEI Order.
Overall, while the DEI Order does not currently require any action by private sector employers, it is likely a prelude to future executive orders that will attempt to prohibit or curb the use of DEI initiatives in the private sector. In this time of uncertainty, employers — particularly federal contractors or grant recipients — should consider contacting their labor counsel to review their existing hiring, training, and promotion practices in light of the Administration’s executive orders.
Marco Lucido is a lawyer with Fenton & Keller in Monterey. This column is intended to answer questions of general interest and should not be construed as legal advice. Email queries to email@fentonkeller.com.