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On January 21, 2025, President Trump signed the “Ending Illegal Discrimination And Restoring Merit-Based Opportunity” Executive Order (the “EO”). Among other things, this EO rescinds Executive Order 11246, which was signed by President Lyndon Johnson in 1965.

Under Executive Order 11246, covered federal contractors and subcontractors were required to affirmatively recruit women and minorities for employment and ensure employment practices did not discriminate on the basis of race, color, religion, sex, and national origin. Executive Order 11246 further mandated that contractors develop annual affirmative action plans measuring their compliance with these objectives.

Rescission of Executive Order 11246

Unlike many Executive Orders, Executive Order 11246 is codified in regulation (41 C.F.R. ch. 60) and it is currently implemented through FAR 52.222-6.  The Department of Labor’s Office of Federal Contract Compliance Programs (“OFCCP”) has been responsible for enforcing Executive Order 11246 and its implementing regulations. 

Trump’s new EO directs the OFCCP to immediately stop:

• Promoting “diversity.”
• Holding Federal contractors and subcontractors responsible for taking “affirmative action.”
• Allowing or encouraging Federal contractors and subcontractors to engage in workforce balancing based on race, color, sex, sexual preference, religion, or national origin.

The EO further provides, however, that contractors “may continue to comply with the regulatory scheme” for a period of 90 days, or until April 21, 2025.

Moving forward under the EO, executive agencies must require federal contractors “to agree that . . . compliance in all respects with all applicable Federal anti-discrimination laws is material to the government’s payment decisions” and for federal contractors “to certify that [the contractor] does not operate any program promoting DEI that violates any applicable Federal anti-discrimination laws” going forward.

Impact on State Contractors and JATC Funds Remains Unclear

While the full impact of the EO remains unclear, the EO will certainly have a significant impact on state contractors and jointly-trusteed registered apprenticeship funds.

First, in addition to being federal contractors, many construction contractors are also state contractors.  Many states, such as California and Minnesota, have state affirmative action and DEI programs that the current administration may consider violative of the EO.  Federal contractors will need to review these programs and ensure that the state programs are in compliance with “any applicable Federal anti-discrimination laws.”  Contractors may be forced to choose whether they wish to be federal contractors or state contractors.

Second, to the extent that they sponsor jointly-trusteed registered apprenticeship programs subject to the affirmative action requirements of 29 CFR Part 30, it is unclear what contractors and their labor partners must take in order to comply with the EO.  In particular, it is unknown what impact the EO will have on the JACT’s affirmative action obligations that are enforced by the Employment and Training Administration.  

The EO does provide that the Attorney General and the Secretary of Education will issue guidance within 120 days.  According to the EO, the guidance will address “all State and local educational agencies that receive Federal funds, as well as all institutions of higher education that receive Federal grants or participate in the Federal student loan assistance program under Title IV of the Higher Education Act, 20 U.S.C. 1070 et seq., regarding the measures and practices required to comply with Students for Fair Admissions, Inc. v. President and Fellows of Harvard College, 600 U.S. 181 (2023).”

In the interim, however, it is important to remember that the EO provides that contractors “may continue to comply with the regulatory scheme” for a period of 90 days, or until April 21, 2025.

The Bottom Line

The full effect of the EO is yet to be determined as we wait for additional information and guidance from the Trump administration. For now, we know that affirmative action and related certification obligations as to gender and race/ethnicity no longer exist.

In contrast, because covered federal contractors/subcontractors’ affirmative action-related obligations with respect to protected veterans and individuals with a disability are based on federal Acts (i.e., the Vietnam Era Veterans’ Readjustment Act of 1974 and Section 503 of the Rehabilitation Act of 1973), the requirements imposed by those Acts and their implementing regulations presumably remain. Additionally, employers must still comply with and file EEO-1, VETS-4212, and state reporting obligations to date. 

Though the EO may be challenged, and a lot of questions remain (including the impact of the EO on state contactors’ ability to comply with state affirmative action-related requirements and the impact on JATCs), federal contractors and subcontractors (and other employers) should review their DEI policies and practices for compliance now with existing law and consult their counsel for guidance.