Remind me, what’s an executive order?

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

Executive orders affect the firms of the executive branch and for that reason do not need the approval of Congress. They need to be within the president’s constitutional authority and might be challenged in court if considered unconstitutional.

Executive orders might be rescinded, reversed by future presidents, or challenged in court, and enforcement concerns can alter throughout any administration.

The new administration’s actions have significant results beyond executive orders. For more on mitigating danger, worldwide services can take new chances by remaining active.

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

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

EO 11246 required every federal government contract to consist of a declaration that the specialist will not victimize any staff member or applicant for employment based on race, creed, color, or national origin.

Despite President Trump’s brand-new executive order, the underlying federal anti-discrimination law remains the same for private-sector workers.

However, the executive order signals that there may be altering enforcement concerns in the brand-new administration. The order directs all federal firms to “combat 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 liberties workplace, pointing to his record of “taking legal action against corporations who utilize ‘woke’ policies to victimize their employees.”

In addition to revoking EO 11246, the Jan. 21 executive order instructs each agency of the federal government to identify “up to 9 potential civic compliance examinations” of personal 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 - consisting of bar associations - big structures, and universities whose endowments go beyond US$ 1 billion.

Organizations that may be targeted should ask:

- What is my tolerance?
- How will staff members respond to the company’s actions?
- How will consumers and stakeholders respond?
What in-house counsel should think of:

Assess any federal contracts and grants

- Determine if they contain any terms or conditions connected to DEI that might clash with present laws and regulations
Review your organization’s existing DEI policies to understand your danger

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

- Hiring and recruitment procedures
- Performance assessments and promo choices
- Training products and presence records
- Any modifications to DEI policies
Implications for federal contractors

Among other procedures, the Jan. 21 Executive Order needs the heads of federal companies to consist of specific 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 applicable Federal anti-discrimination laws is product to the federal government’s payment decisions for functions of area 3729( b)( 4) of title 31, United States Code”