Remind me, what's an executive order?

Executive orders are regulations ordered by the president of the United States that direct government companies and officials to take particular actions. While they are not laws, they have the force of law and impact how existing laws are implemented or imposed.

Executive orders impact the agencies of the executive branch and therefore do not need the approval of Congress. They need to be within the president's constitutional authority and may be challenged in court if considered unconstitutional.

Executive orders might be rescinded, employment reversed by future presidents, or challenged in court, and enforcement top priorities can change during any administration.

The brand-new administration's actions have far-reaching impacts beyond executive orders. For more on mitigating threat, worldwide businesses can take brand-new chances by staying active.

Implications of the executive orders for DEI initiatives and employment in private-sector organizations

On Jan. 21, President Trump provided “Ending Illegal Discrimination and Restoring Merit-Based Opportunity,” which reverses various prior executive orders and memoranda, including Executive Order 11246 (EO 11246) checked in 1965 by President Lyndon B. Johnson.

EO 11246 required every government agreement to consist of a declaration that the specialist will not discriminate against any worker or candidate for employment based upon race, creed, color, or nationwide origin.

Despite President Trump's new executive order, the underlying federal anti-discrimination law stays the same for private-sector staff members.

However, the executive order signals that there may be changing enforcement top priorities in the new administration. The order directs all federal agencies to “fight prohibited private-sector DEI preferences, requireds, policies, programs, and activities.“

In December 2024, President-elect Trump tapped Harmeet K. Dhillon to lead the Justice Department's civil rights office, pointing to his record of “taking legal action against corporations who use ‘woke’ policies to victimize their employees.“

In addition to withdrawing EO 11246, the Jan. 21 executive order instructs each firm of the federal government to recognize “as much as 9 prospective civic compliance investigations” of economic sector entities within 120 days of the order - by May 21, 2025.

The private sector entities subject to these examinations include openly traded corporations, big nonprofits - including bar associations - large foundations, and universities whose endowments exceed US$ 1 billion.

Organizations that may be targeted should ask:

- What is my company's danger tolerance?
- How will staff members respond to the company's actions?
- How will customers and stakeholders respond?
What internal counsel should think about:

Assess any federal contracts and grants

- Determine if they include any terms or conditions connected to DEI that may contravene existing laws and guidelines
Review your company's existing DEI policies to comprehend your threat

- Prepare for increased scrutiny and possible civil compliance investigations
Document, file, document

- Hiring and recruitment processes
- Performance assessments and promo choices
- Training products and attendance records
- Any modifications to DEI policies
Implications for federal specialists

To name a few steps, the Jan. 21 Executive Order needs the heads of federal agencies to include specific terms in every contract or grant award:

- “A term requiring the contractual counterparty or grant recipient to agree that its compliance in all respects with all applicable Federal anti-discrimination laws is product to the government's payment decisions for purposes of section 3729( b)( 4) of title 31, United States Code”