I DEI and Affirmative Action COMPLIANCE UNDER THE TRUMP ADMINISTRATION BY DEBRA A. MASTRIAN, AMUNDSEN DAVIS LLC In January, President Donald Trump signed Executive Order 14173 entitled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity,”1 which ordered federal agencies to end all diversity, equity and inclusion initiatives or policies that are discriminatory or provide illegal preferences and to enforce federal civil rights laws. The Trump EO follows the rationale of the U.S. Supreme Court in the Harvard and University of North Carolina student admissions cases in 2023. In those cases, the Supreme Court found that using racial preferences in various stages of the college admissions process violates the equal protection clause of the 14th Amendment. The Court reasoned that you cannot have preferences for a certain racial group without harming another. Thus, race-based affirmative action (e.g., racial quotas, lower test scores or seeking to admit a certain percentage of students based on their race) is no longer permitted in higher education institutions that accept federal funding. The Trump EO also rescinded prior Executive Orders 11246 and 13672, which required certain federal contractors to protect women and minorities with affirmative action initiatives and prohibited federal contractors from discriminating against workers on the basis of sexual orientation and gender identity.2 EO 11246 prohibited federal contractors from engaging in discrimination and further required certain federal contractors to take affirmative action and develop written affirmative action plans based on sex and race. It covered federal contractors with 50+ employees and government contracts valued at $50,000 or more. The implementing regulations consistently defined a government contract as any agreement between any contracting agency and any person for the sale or use of nonpersonal services, including fund depositories. Financial institutions were considered covered federal contractors if they had federal share and deposit insurance or if they issued or paid on U.S. savings bonds and savings notes. Thus, most financial institutions were required to comply with EO 11246. The Trump EO does away with EO 11246, including the obligation to develop affirmative action plans, and strips the Office of Federal Contract Compliance Programs of its authority to enforce compliance. The Trump EO also prohibits “illegal DEI and DEIA policies” in the private sector and demands that the OFCCP stop promoting diversity and allowing or encouraging contractors to engage in “workforce balancing.”3 The Trump EO does not define what constitutes an illegal DEI initiative or program. Federal contractors were given 90 days (until April 21, 2025) to comply with the Trump EO and submit certification that they are not participating in illegal DEI initiatives or affirmative action programs. A false certification can give rise to liability under the federal False Claims Act. A federal lawsuit was filed in late February, National Association of Diversity Officers in Higher Education, et. al v. Donald J. Trump, et. al, challenging the constitutionality of key provisions of the Trump EO and another Trump administration executive order regarding DEI entitled “Ending Radical and Wasteful Government DEI Programs and Preferencing.”4 The federal district court entered a partial nationwide preliminary injunction. Specifically, the district court blocked the federal contractor compliance certification and prohibited federal agencies from targeting private HUMAN RESOURCES 36 HOOSIERBANKER
RkJQdWJsaXNoZXIy MTg3NDExNQ==