President Trump Rescinds Executive Order 11246, Impacting Federal Contractor Affirmative Action Requirements

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On January 21, 2025, President Donald Trump signed an Executive Order entitled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity.” In section 3 of the EO, President Trump rescinded Executive Order 11246, the decades-old executive order relating to federal contractor affirmative action obligations. EO 11246 was signed by President Lyndon B. Johnson in 1965, prohibiting employment discrimination by federal contractors and subcontractors and requiring them to take certain affirmative actions to prevent employment discrimination. This included a requirement that federal contractors create affirmative action programs (“AAPs”). In 2014, President Barack Obama signed Executive Order 13672, amending EO 11246, to also prohibit federal contractors and subcontractors from discriminating on the basis of sexual orientation or gender identity.

President Trump’s EO represents a major shift in federal affirmative action policy. The EO orders “all executive departments and agencies to terminate all discriminatory and illegal preferences, mandates, policies, programs, activities, guidance, regulations, enforcement actions, consent orders, and requirements.” It also ordered the Office of Federal Contract Compliance Programs (“OFCCP”) to cease promoting “diversity,” holding federal contractors and subcontractors responsible for taking “affirmative action,” and allowing or encouraging federal contractors and subcontractors to engage in workforce balancing based on race, color, sex, sexual preference, religion, or national origin. This EO did not eliminate the OFCCP.

The new EO states, “For 90 days from the date of this order, Federal contractors may continue to comply with the regulatory scheme in effect on January 20, 2025.”

Secretary of Labor Halts Enforcement Efforts

On January 24, 2025, Acting Secretary of Labor Vincent Micone, III issued Secretary’s Order 03-2025 to all DOL employees – including the OFCCP – to cease enforcement activities related to the now-rescinded EO 11246. This includes ceasing and desisting “all pending cases, conciliation agreements, investigations, complaints, and any other enforcement-related or investigative activity.” The Order requires that contractors with impacted open reviews or investigations be notified by January 31, 2025, that the EO 11246 components of the review or investigation have been closed. Acting Secretary Micone also noted that Section 503 and the Vietnam Era Veterans Readjustment Assistance Act (“VEVRAA”) components of the review or investigation are being held in abeyance pending further guidance.

Continued Obligations

The affirmative action and non-discrimination requirements described in EO 11246 are no longer operative. However, this does not change the requirements under existing anti-discrimination laws such as the Age Discrimination in Employment Act, Title VII of the Civil Rights Act, and the Americans with Disabilities Act.

Further, federal affirmative action requirements regarding disabled individuals and protected veterans are not subject to the new EO and remain in place. Federal contractors must still satisfy their obligations under VEVRAA and Section 503 of the Rehabilitation Act. These obligations are based on statutory requirements and remain unchanged. The OFCCP also released a statement on January 23, 2025, noting that Section 503 and VEVRAA obligations remain in effect.

Federal contractors should also be aware of any state-level affirmative action requirements applicable in the states in which they operate in.

Federal Contractor Certification

Federal contractors should be aware that under the new EO, federal contracts or grant awards must now include a term requiring the recipient to “certify that it does not operate any programs promoting DEI that violate any applicable Federal anti-discrimination laws.” According to the White House Fact Sheet on the Executive Order, the order requires a “simple and unmistakable affirmation that contractors will not engage in illegal discrimination, including illegal DEI.”

Takeaways

Federal contractors should remember:

• The EO removed the federal contractors’ AAP obligations with respect to race and gender, which was required under the now rescinded EO 11246.
• OFCCP enforcement activity relating to EO 11246 has been paused. Federal contractors facing pending OFCCP investigation or enforcement-related activity should determine if any of the agency action stems from EO 11246.
• Section 503 and VEVRAA remain in effect and federal contractors should continue to satisfy their obligations under these statutes.
• For new government contracts, federal contractors should be aware of new affirmation language relating to DEI.