Sweeping Executive Order Targets DEI Initiatives in the Private and Public Sectors

On January 21, 2025, President Trump issued an executive order (the “EO”) intended to terminate government-sponsored diversity, equity, and inclusion (“DEI”) initiatives and bring the federal government’s enforcement authority to bear on “illegal DEI” efforts across the private sector.¹ The EO combines immediate changes to federal programs, including at the Office of Federal Contract Compliance Programs (“OFCCP”), with an order for the Attorney General to submit a report within 120 days that identifies the “most egregious and discriminatory DEI practitioners” and proposes litigation and investigation steps to end or deter “illegal DEI discrimination.”

The EO does not define what constitute illegal “DEI preferences, mandates, policies, programs, and activities,” although the scope of the EO is nominally tied to “illegal discrimination.”

Immediate Changes to Federal Programs

In order to “terminat[e] illegal discrimination in the federal government,” the EO revokes a number of executive actions, including EO 11246, which since 1965 has required federal contractors to take “affirmative action” to comply with the non-discrimination obligations that are part of all federal contracts.

The EO also requires the OFCCP—the office within the Department of Labor that was charged with implementing EO 11246—to “cease” “allowing or encouraging” federal contractors to “engage in workforce balancing” based on protected race, sex, or other protected characteristics. It also prohibits OFCCP from: (i) promoting “diversity;” and (ii) holding federal contractors and subcontractors responsible for taking “affirmative action.” The EO provides a 90-day grace period from the date of its adoption in which federal contractors may “continue to comply with the [previous] regulatory scheme” under EO 11246. It also expressly excludes statutorily required preferences for veterans and persons protected by the Randolph-Sheppard Act, 20 U.S.C. § 107 (covering blind individuals in certain government jobs).

Separately, the EO directs all agency heads to include a term in every contract or grant award requiring the counterparty to certify that it does not, “operate any programs promoting DEI that violate any applicable Federal anti-discrimination laws.” This particular requirement could raise the specter of possible False Claims Act allegations being levied against those contractors who fail to accurately certify their activity.

Finally, the EO directs all agencies to immediately end their DEI policies, programs, guidance, regulations, and requirements. This could have wide-ranging implications. For instance, as part of implementing the EO, the EEOC could revisit its Title VII guidance authorizing voluntary affirmative action plans. That said, amending or rescinding certain promulgated policies will likely require the agencies to undertake notice-and-comment rulemaking, which will take time to complete.

Report on DEI Enforcement Priorities 

The EO tasks the Attorney General, in consultation with the heads of all relevant agencies, to submit to a report to the President within 120 days with “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 identify: 

1. “key sectors of concern within each agency’s jurisdiction;” 
2. “the most egregious and discriminatory DEI practitioners in each sector of concern;”
3. “A plan of specific steps” to deter unlawful DEI programs, including that “each agency shall identify up to nine potential civil compliance investigations of publicly traded corporations . . . institutions of higher education with endowments over 1 billion dollars” or other institutions; 
4. “Litigation that would be potentially appropriate for Federal lawsuits, intervention, or statements of interest;” and 
5. “[R]ecommendations for enforcing Federal civil-rights laws and taking other appropriate measures to encourage the private sector to end illegal discrimination and preferences, including DEI.”

Guidance to Higher Education Institutions

The EO also requires the Attorney General and the Secretary of Education to issue guidance to state and local educational agencies and higher education institutions about compliance with Students for Fair Admissions, Inc. v. President and Fellows of Harvard College, 600 U.S. 181 (2023)—the Supreme Court decision holding that race-conscious admissions processes are unconstitutional. This guidance may impact the admissions programs and other measures that higher education institutions have adopted in response to the Supreme Court’s decision.

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O’Melveny’s Labor & Employment and DE&I Affirmative Action Task Force groups will continue to track developments. For any questions related to the executive order, please contact the O’Melveny lawyer whom you work with or one of our Key Contacts.

 ¹ Executive Order, Ending Illegal Discrimination and Restoring Merit-Based Opportunity (Jan. 21, 2025).

This memorandum is a summary for general information and discussion only and may be considered an advertisement for certain purposes. It is not a full analysis of the matters presented, may not be relied upon as legal advice, and does not purport to represent the views of our clients or the Firm. Tristan Morales, an O’Melveny partner licensed to practice law in the District of Columbia and California; Aparna Joshi, an O’Melveny partner licensed to practice law in the District of Columbia and Illinois; Apalla U. Chopra, an O’Melveny partner licensed to practice law in California; Molly Lens, an O’Melveny partner licensed to practice in California and New York; Amanda Santella, an O’Melveny partner licensed to practice law in the District of Columbia and Maryland; Jennifer B. Sokoler, an O’Melveny partner licensed to practice law in New York; Natasha W. Teleanu, an O’Melveny partner licensed to practice law in New York; Kim Williams, an O’Melveny partner licensed to practice law in Texas; David Cohen, an O’Melveny counsel licensed to practice law in New York; Marni Robinow, an O’Melveny counsel licensed to practice law in California; Gabrielle Jackson, an O’Melveny associate licensed to practice law in the District of Columbia; and Katie Norris, an O’Melveny law clerk, contributed to the content of this newsletter. The views expressed in this newsletter are the views of the authors except as otherwise noted.

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