Remind me, what’s an executive order?

Executive orders are directives bought 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 effect how existing laws are carried out or imposed.

Executive orders affect the companies of the executive branch and therefore do not require the approval of Congress. They should be within the president’s constitutional authority and may be challenged in court if deemed unconstitutional.

Executive orders may be rescinded, reversed by future presidents, or challenged in court, and enforcement priorities can change throughout any administration.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 threat, international organizations can take brand-new opportunities by staying active.

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

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

EO 11246 required every government agreement to consist of a declaration that the specialist will not victimize any worker or applicant for employment based upon race, employment creed, color, or nationwide origin.

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

However, the executive order signals that there may be changing enforcement priorities in the new administration. The order directs all federal companies to “combat illegal private-sector DEI choices, requireds, policies, programs, and activities.”

In December 2024, President-elect Trump tapped Harmeet K. Dhillon to lead the Justice Department’s civil rights office, pointing to his record of “suing corporations who utilize ‘woke’ policies to victimize their employees.”

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

The personal sector entities subject to these examinations consist of publicly traded corporations, large nonprofits - consisting of bar associations - large foundations, and universities whose endowments exceed US$ 1 billion.

Organizations that may be targeted should ask:

- What is my organization’s risk tolerance?
- How will workers respond to the company’s actions?
- How will consumers and stakeholders react?
What internal counsel needs to think about:

Assess any federal contracts and grants

- Determine if they include any terms or conditions related to DEI that might contravene existing laws and guidelines
Review your company’s existing DEI policies to understand your risk

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

- Hiring and recruitment procedures
- Performance assessments and promotion decisions
- Training products and attendance records
- Any modifications to DEI policies
Implications for federal contractors

To name a few procedures, the Jan. 21 Executive Order needs the heads of federal companies to include specific terms in every contract or grant award:

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