President Trump Aims to Combat DEI Initiatives in Early Days Executive Order

By Alice K. Jump, Ethan Krasnoo, and Deena Merlen

In his inaugural speech on January 20th, President Trump articulated his vision for America under his administration, promising to create a “colorblind and merit-based” society.  On January 21st, President Trump signed an Executive Order (one of many he has penned in his first few days in office) entitled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” (“DEI EO”).  The Order is designed to eliminate Diversity, Equity and Inclusion (DEI) initiatives and preferences in the workplace.  While the entire purpose of DEI programs is to encourage merit-based success while combatting systemic inequities and biases, the philosophy of the Trump Administration is that these programs have actually fostered “dangerous, demeaning, and immoral race- and sex-based preferences under the guise of so-called ‘diversity, equity, and inclusion’ (DEI) or ‘diversity, equity, inclusion, and accessibility’ (DEIA)”.

The Order directly affects government employees by eliminating DEI programs within the federal government and furloughing staff.  It also impacts government contractors by eliminating long standing diversity and affirmative action requirements.  However, the private sector will not be immune to the effects of this Order.  Private companies can expect their DEI initiatives and programs to be under scrutiny too, given facets of the DEI EO which requires:

  • The heads of all federal agencies to take action to advance in the private sector “the policy of individual initiative, excellence, and hard work.”
  • Within 120 days the Attorney General, in conjunction with heads of federal agencies and the Director of the Office of Management and Budget, must submit a report containing “recommendations for enforcing Federal civil-rights laws and taking other appropriate measures to encourage the private sector to end illegal discrimination and preferences, including DEI.” The report must contain a strategic enforcement plan to identify “the most egregious and discriminatory DEI practitioners” and identify up to nine compliance investigations into (i) publicly traded corporations, (ii) large nonprofit corporations or associations, (iii) foundations with assets of $500 million or more, (iv) state or local bar and medical associations, and (v) institutions of higher education with endowments of $1 billion.

Takeaways:

There are many uncertainties as to how the DEI EO will be applied and if it will survive inevitable legal challenges.  While Congress does not have the authority to overturn an Executive Order, it does have ways to curb its implementation should it choose to do so.  Furthermore, we can certainly anticipate objections to the federal government interfering with private company policies, in which case future decisions about the validity of the DEI EO may be left up to the courts.  Nevertheless, large employers, including non-profits, should review their DEI initiatives and programs to evaluate the risk that they may be seen as illegal preferences.  In other words, they will have to assess whether their anti-discrimination efforts will be seen as discrimination.  Broadening the standards of such programs to include factors other than race, gender, or other protected classes may be one option for companies who wish to avoid scrutiny from the federal government.  We will continue to advise of further developments.

Read the full Executive Order here.