Remind me, what's an executive order?

Executive orders are regulations ordered by the president of the United States that direct federal government agencies and authorities to take specific actions. While they are not laws, they have the force of law and impact how existing laws are executed or implemented.

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

Executive orders might be rescinded, overturned by future presidents, or challenged in court, and enforcement priorities can change throughout any administration.

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

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

On Jan. 21, President Trump released “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 needed every government agreement to include a statement that the contractor will not victimize any worker or candidate for work based on race, creed, color, or national origin.

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

However, the executive order signals that there might be changing enforcement concerns in the brand-new administration. The order directs all federal firms to “fight illegal 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, indicating his record of “taking legal action against corporations who use ‘woke’ policies to victimize their workers.“

In addition to revoking EO 11246, the Jan. 21 executive order instructs each firm of the federal government to recognize “approximately 9 potential civic compliance examinations” of economic sector entities within 120 days of the order - by May 21, 2025.

The private sector entities based on these investigations consist of openly traded corporations, big nonprofits - including bar associations - large structures, and universities whose endowments go beyond US$ 1 billion.

Organizations that may be targeted should ask:

- What is my company's threat tolerance?
- How will workers respond to the company's actions?
- How will customers and stakeholders respond?
What internal counsel needs to believe about:

Assess any federal agreements and grants

- Determine if they include any terms or conditions associated with DEI that may clash with current laws and guidelines
Review your company's existing DEI policies to comprehend your danger

- Prepare for increased examination and possible civil compliance examinations
Document, document, document

- Hiring and recruitment procedures
- Performance examinations and promotion decisions
- Training products and participation records
- Any changes to DEI policies
Implications for federal contractors

To name a few measures, the Jan. 21 Executive Order requires the heads of federal agencies to consist of particular terms in every agreement or grant award:

- “A term needing the contractual counterparty or grant recipient to concur that its compliance in all aspects with all relevant Federal anti-discrimination laws is product to the government's payment choices for functions of area 3729( b)( 4) of title 31, United States Code”