Podcasts

Summary

The new Trump administration has already implemented significant changes to DEI policies, EEOC enforcement policies, and federal contractor requirements. Join Frantz Ward Partners Megan Bennett and Andrew Cleves as they break down the latest executive orders and discuss new compliance obligations businesses should consider moving forward.
Podcast First Aired: March 5, 2025

Transcript

Megan Bennett:

Welcome to another edition of Frantz Ward’s podcast, Shoveling Smoke, where we discuss current legal issues affecting the business community and our daily lives. I’m Megan Bennett, and I’m here with Andrew Cleves, and we are both your hosts and your guests for today’s edition.

Andrew Cleves:

As of today, we are a little more than one month into the Trump-Vance administration, so we wanted to discuss with you some of the executive orders that have been issued during the last few weeks, what is going on at the EEOC, and what employers should be doing to comply with the changes?

So, for our first topic, I understand that one of President Trump’s first executive orders targeted federal contractors and requirements surrounding their workforce. What was the executive order and what did it change?

Megan Bennett:

So, the order that you’re referring to Andrew is called the Ending Illegal Discrimination and Restoring Merit-Based Opportunity Order. President Trump signed this order on day two in office.

To give you a little bit of background, prior to this executive order, federal contractors were required to engage in affirmative action toward women and minorities, individuals with disabilities, and veterans.

Basically, private employers who have contracts with the federal government needed to ensure that they were making a good faith effort to have a diverse workforce, and they were required to annually certify to the government that they were doing so.

Now, the requirement to engage in affirmative action toward women and minorities was based in a previous executive order: Executive Order 11246. However, the current order, which was put in place just last month, revokes Executive Order 11246.

So, what this means is that federal contractors are no longer required and actually are specifically prohibited from creating affirmative action plans regarding women and minorities, or engaging in affirmative action toward women and minorities.

Andrew Cleves:

When was Executive Order 11246 implemented? Was that something recently put into place under the Biden administration?

Megan Bennett:

So, that to me is one of the most interesting things about Trump’s executive order. Executive Order 11246, and the requirement to engage in affirmative action toward women and minorities has been around for about 60 years. That executive order was signed by President Lyndon Johnson back in 1965.

So, these were not new requirements, and several Republican administrations have taken office and supported affirmative action for federal contractors over the last 60 years.

Andrew Cleves:

That is interesting. You mentioned that federal contractors also are required to engage in affirmative action for individuals with disabilities and veterans. Do those requirements still exist?

Megan Bennett:

That’s a great question. So, the affirmative action requirements for individuals with disabilities and veterans are based in statute, rather than executive order. An executive order like the one that President Trump signed cannot revoke a statute.

So, those responsibilities to engage in affirmative action towards individuals with disabilities and veterans remain in place for federal contractors. Now, the question is whether the Office of Federal Contract Compliance Programs (which we generally refer to as the OFCCP) will be given the power or the resources to actually enforce those responsibilities.

So, I mentioned earlier that previously, federal contractors were required to annually certify to the government that they were complying with their affirmative action responsibilities. Now, that annual certification was something new under the Biden administration, and federal contractors completed that certification through an online contractor portal.

In the last couple of weeks, that online contractor portal has been removed, and it no longer exists. So, while I don’t know for sure, this action of getting rid of this online contractor portal leads me to believe that the OFCCP’s focus will not be on enforcing affirmative action requirements for individuals with disabilities or veterans.

Andrew Cleves:

Got it. What do federal contractors need to be thinking about going forward?

Megan Bennett:

So, there have been a lot of changes to federal contractor responsibilities. However, they still have a lot of the same legal requirements that they had before.

So, for example, federal contractors are still responsible for their EEO-1 and VETS-4212 reporting. They’re also still responsible for state and local affirmative action plan requirements, which I think may expand to help fill the void left by a weakened OFCCP and the revocation of Executive Order 11246.

Federal contractors are also still technically required to engage in affirmative action toward individuals with disabilities and veterans. So, you should still continue to be capturing that data. Like I mentioned though, the question remains, will that truly be enforced by the OFCCP?

And finally, you still have all your same requirements under federal anti-discrimination laws. Federal contractors still need to have EEO policies, they need to make sure they’re making employment decisions that are based on legitimate reasons, rather than race, gender, disability status, veteran status, et cetera.

So, the other big piece of this executive order was prohibiting federal contractors from promoting certain diversity, equity, and inclusion initiatives. So, Andrew, I know that you have been closely following the legal updates on DE&I since the Supreme Court’s decision on affirmative action in the Harvard admissions case a year or two ago. So, I’d be interested in hearing your thoughts on what employers need to think about under this administration.

Andrew Cleves:

Thanks, Megan. The short answer is potentially a lot depending on to what extent employers currently have DEI initiatives in place.

Similar to his approach to federal contractor affirmative action obligations, on his first day in office, President Trump signed an executive order which rolled back many diversity programs and LGBTQ+ rights championed by the Biden administration.

One of those canceled initiatives included a 2021 order called Diversity, Equity, Inclusion and Accessibility in the Federal Workforce, which had eventually led to pay equity measures last year for federal employees. So, that was his first day.

On second day in office, President Trump took steps to dismantle DEI programs and offices across the federal agencies. In particular, by the end of January, federal agency heads had to one, inform all employees that their DEI offices were being closed. Two, inform anyone who worked in a DEI office that they were being put on administrative leave immediately. Three, take down all websites, social media accounts, and other public-facing media related to DEI; and four, submit a plan for executing a reduction in force action regarding the employees who worked in DEI offices.

Notably, the orders from the Trump administration also encouraged employees to speak up if they knew of any efforts to disguise these programs by using more general language, and required agency heads to submit a list of all contract descriptions or personnel position descriptions that were changed since November 5th, 2024 (in other words, election day) to “obscure” their connection to DEI programs.

Megan Bennett:

So, it sounds like the Trump administration was really focusing on DEI efforts in the federal government. Can you tell us a little bit about how President Trump’s DEI-related executive orders address federal contractors?

Andrew Cleves:

Yes. As you discussed regarding affirmative action efforts, President Trump’s executive orders included provisions requiring private companies with federal contracts (and again, these are some very large companies like Microsoft) to certify that they do not have any programs “promoting diversity, equity, and inclusion in a manner the administration believes is illegal.”

Significantly, federal contractors must comply with anti-discrimination laws in a manner which brings them within the purview of the False Claims Act. This is significant because under the False Claims Act, private individuals can seek triple damages and civil penalties for violations.

So, in other words, employees of these companies, which are federal contractors, could be incentivized to bring lawsuits on behalf of the federal government for potential violations of President Trump’s DEI-related mandates.

Megan Bennett:

Wow, triple damages, that sounds like a lot. So, for our clients who aren’t federal contractors, what do they need to know about the Trump administration’s focus on DEI efforts? Has the administration targeted DEI efforts at private companies that are not federal contractors?

Andrew Cleves:

Yes, he has. And in executive order, President Trump aimed to “encourage companies to end illegal DEI programs by redefining them as a form of discrimination.” The order also directed agencies to draw up lists of up to nine public companies, large nonprofits, or other organizations, and that would be a list per agency to investigate over their DEI policies.

Following that, the U.S. Attorney General issued a memo that instructs the Department of Justice’s Civil Rights Division to launch a new mission to investigate, eliminate, and penalize illegal DEI policies and programs. And in the memo, the Attorney General made reference to potentially pursuing criminal investigations against companies.

Megan Bennett:

So, those were the initial executive orders and steps on DEI. But since you and I have been studying all of the Trump administration’s actions, we know that these things have been changing nearly every day. So, have there been any recent noteworthy updates as it relates to President Trump’s efforts to target DEI initiatives?

Andrew Cleves:

As a matter of fact, yes. On Friday, February 21st, a federal court judge in Baltimore preliminarily halted the Trump administration from enforcing several portions of the DEI-related executive orders.

In particular, the judge focused on one, the mandates for agencies to terminate equity-related grants or contracts. Two, the requirement that contractors or grantees certify that they’re not promoting DEI, and three, the instruction that the Attorney General encourage the private sector to end DEI programs under threat of potential enforcement.

The judge found that many of these provisions were either unconstitutionally vague on their face (for example, provision relating to contract termination), or that they violated free speech rights, for example, the orders enforcement and certification provisions. The judge did not, however, block the Attorney General from preparing reports or pursuing investigations related to the anti-DEI directives.

Megan Bennett:

So, given all of this, any final thoughts, comments, or suggestions for companies moving forward under this administration if they have DEI initiatives in place?

Andrew Cleves:

Yes. First off, if they have DEI initiatives in place, don’t panic. We’ve talked about these developments occurring over the days, weeks, and months. Just this morning, a report came out regarding 350 C-suite executives across the country who had been interviewed about their DEI initiatives, and they were interviewed both before and after the inauguration.

About half of those surveyed said they had no plans to change their programs, and then close to half said they were looking at small to moderate changes. So, for companies that still have DEI programs in some form, it may be more of a question of closely reviewing existing policies and programs, and perhaps, making some adjustments.

For example, if a company has DEI initiatives focused on race or gender, those companies could consider whether eligibility requirements could be broadened while still meeting the program’s objectives.

Then ultimately, one final comment or reminder is that Title VII of the Civil Rights Act still exists, and it still protects individuals based upon the various protected characteristics, whether that’s race, gender, disability, or another one.

So, I say that because to the extent DEI programs help alleviate risk of discrimination claims by individuals within those protected groups — absent DEI programs, those risk potential claims are not going away.

So, at this point, we have talked a lot about executive orders that affect employers’ equal employment opportunity practices. Megan, can you fill us in on some of the changes that have been taking place at the EEOC?

Megan Bennett:

Yeah, so within a few days of his inauguration, President Trump terminated and replaced the EEOC’s general counsel. Now, this was expected, and this is in line with what generally occurs when a new party takes control of the White House. So, nothing too new on that front.

What was not expected, however, is that President Trump also terminated two Democratic EEOC commissioners, likely so he could replace them with Republican appointees. Because the EEOC is supposed to be a bipartisan agency, these removals were actually pretty unprecedented, and there’s never been anything like that before.

Due to these firings, the EEOC currently only has two of the five commissioner positions filled. At least three commissioners are required for the EEOC to adopt new regulations or issue legal guidance. So, right now, the EEOC can’t really do anything of real significance.

Andrew Cleves:

So, the EEOC cannot take any significant action yet, but have they signaled any changes in the agency’s priorities under this administration?

Megan Bennett:

Absolutely. So, the new acting EEOC chair is Andrea Lucas. She was a Trump appointee under the previous administration, under the previous Trump administration. And since taking on her new role as the acting EEOC Chair, she has identified four main priorities for the EEOC under this administration.

So, the first priority is focusing on DEI motivated race and sex discrimination. Now, based on everything that you just discussed earlier in the podcast, I don’t think anyone is too surprised by that priority.

Her second priority is addressing anti-American national origin discrimination. And just recently, the EEOC released a press release specifically on this priority. So, in short, the EEOC is connecting its role in enforcing Title VII to the Trump administration’s focus on cracking down on immigration.

The third priority is basically backtracking on the EEOC’s previous guidance regarding LGBTQ+ protections, and basing that in large part on President Trump’s executive order, in which he states that the federal government will only recognize two sexes.

And finally, probably the most straightforward of the four priorities, is protecting workers from religious bias and harassment.

Andrew Cleves:

It sure sounds like we should expect a lot of changes in the upcoming months at the EEOC then.

Megan Bennett:

I agree. So, right now, there’s not too much the EEOC can do without a quorum. They can still investigate and close charges, but they can’t issue legal guidance or rescind current legal guidance. However, I expect more press releases will be coming out in the next upcoming weeks and months that will expand on how the EEOC will interpret and enforce the federal anti-discrimination laws.

And I also anticipate that President Trump is going to try and move as quickly as possible to appoint a third commissioner so that the EEOC can have a quorum and move forward with some of these actions.

[Music Playing]

Andrew Cleves:

Got it. So, to summarize today’s Shoveling Smoke episode — there have been a lot of changes in the last days, weeks, and months, and we just covered a few of them. We expect more legal challenges as well as more clarifying guidance from agencies in the coming weeks and months.

If you have any questions about a new executive order, an agency memo or agency guidance, please do not hesitate to reach out to anyone in Frantz Ward’s Labor and Employment Group.

Megan Bennett:

And that wraps up another episode of Shoveling Smoke. This podcast is available on frantzward.com, as well as Spotify and Apple Podcasts.

Shoveling Smoke is a production of Evergreen Podcasts. Our producer and audio engineer is Sean Rule-Hoffman. Our recording engineer is Gray Longfellow. For more information, please visit our website at frantzward.com.

Andrew Cleves:

Also, for the appropriate legal disclaimer: this podcast is provided for educational purposes. It does not constitute legal advice and is not intended to establish an attorney-client relationship, nor is it intended to suggest or establish standards of care applicable to particular lawyers in any given situation. Prior results do not guarantee a similar outcome.