Federal contractors are currently navigating a complex legal landscape following the Trump administration’s issuance of Executive Order 14173, which revokes longstanding affirmative action requirements and imposes new obligations regarding diversity, equity, and inclusion (DEI) programs. This order, signed on January 21, 2025, rescinds Executive Order 11246, a directive in place since 1965 that mandated affirmative action policies for federal contractors. ([en.wikipedia.org](https://en.wikipedia.org/wiki/Executive_Order_14173?utm_source=openai))
Under the new order, federal contractors are required to certify that they do not operate any DEI programs that violate federal anti-discrimination laws. This certification is tied to the False Claims Act (FCA), introducing potential legal risks for contractors whose DEI initiatives are deemed non-compliant. ([wilmerhale.com](https://www.wilmerhale.com/en/insights/client-alerts/20250127-executive-order-seeks-to-impose-false-claims-act-liability-for-federal-contractors-dei-programs?utm_source=openai))
The order also directs the Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) to cease enforcing affirmative action requirements and to stop encouraging workforce balancing based on protected characteristics. This shift has left contractors uncertain about which DEI practices remain permissible and how to align their policies with the new federal directives. ([hklaw.com](https://www.hklaw.com/en/insights/publications/2025/01/president-trump-ends-affirmative-action-requirements-for-government?utm_source=openai))
In response to these developments, a group of former U.S. Department of Labor officials from previous administrations has urged federal contractors to continue lawful diversity practices. In an open letter dated April 15, 2025, they argued that the executive order lacks the authority to prevent private companies from implementing equal opportunity strategies that comply with existing anti-discrimination laws. ([reuters.com](https://www.reuters.com/sustainability/boards-policy-regulation/former-us-labor-officials-urge-contractors-stand-firm-dei-2025-04-15/?utm_source=openai))
Legal experts advise contractors to carefully assess their DEI programs to ensure compliance with the new order while maintaining efforts to promote equal opportunity. This includes reviewing employment practices, training programs, and internal policies to mitigate potential FCA liability and align with the evolving regulatory environment. ([articles.jmbm.com](https://articles.jmbm.com/2025/02/05/new-executive-order-creates-litigation-risk-for-federal-contractors-and-healthcare-providers-with-dei-policies-and-programs/?utm_source=openai))
As the situation continues to develop, federal contractors are encouraged to stay informed and consult legal counsel to navigate the challenges posed by the administration’s changes to affirmative action and DEI policies.
Federal contractors are currently navigating a complex legal landscape following the Trump administration’s issuance of Executive Order 14173, which revokes longstanding affirmative action requirements and imposes new obligations regarding diversity, equity, and inclusion (DEI) programs. This order, signed on January 21, 2025, rescinds Executive Order 11246, a directive in place since 1965 that mandated affirmative action policies for federal contractors. ([en.wikipedia.org](https://en.wikipedia.org/wiki/Executive_Order_14173?utm_source=openai))
Under the new order, federal contractors are required to certify that they do not operate any DEI programs that violate federal anti-discrimination laws. This certification is tied to the False Claims Act (FCA), introducing potential legal risks for contractors whose DEI initiatives are deemed non-compliant. ([wilmerhale.com](https://www.wilmerhale.com/en/insights/client-alerts/20250127-executive-order-seeks-to-impose-false-claims-act-liability-for-federal-contractors-dei-programs?utm_source=openai))
The order also directs the Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) to cease enforcing affirmative action requirements and to stop encouraging workforce balancing based on protected characteristics. This shift has left contractors uncertain about which DEI practices remain permissible and how to align their policies with the new federal directives. ([hklaw.com](https://www.hklaw.com/en/insights/publications/2025/01/president-trump-ends-affirmative-action-requirements-for-government?utm_source=openai))
In response to these developments, a group of former U.S. Department of Labor officials from previous administrations has urged federal contractors to continue lawful diversity practices. In an open letter dated April 15, 2025, they argued that the executive order lacks the authority to prevent private companies from implementing equal opportunity strategies that comply with existing anti-discrimination laws. ([reuters.com](https://www.reuters.com/sustainability/boards-policy-regulation/former-us-labor-officials-urge-contractors-stand-firm-dei-2025-04-15/?utm_source=openai))
Legal experts advise contractors to carefully assess their DEI programs to ensure compliance with the new order while maintaining efforts to promote equal opportunity. This includes reviewing employment practices, training programs, and internal policies to mitigate potential FCA liability and align with the evolving regulatory environment. ([articles.jmbm.com](https://articles.jmbm.com/2025/02/05/new-executive-order-creates-litigation-risk-for-federal-contractors-and-healthcare-providers-with-dei-policies-and-programs/?utm_source=openai))
As the situation continues to develop, federal contractors are encouraged to stay informed and consult legal counsel to navigate the challenges posed by the administration’s changes to affirmative action and DEI policies.