Executive Order 14173: Ending Illegal Discrimination and Restoring Merit-Based Opportunity

Synopsis:

Applies to:	Federal contractors and subcontractors, recipients of federal grants.
Crux:	May not exercise any preference for any race, color, national origin, sex, including sexual “preference” (the order’s word), or religion.
Purpose:	Forbidding race- and sex-based “preferences” under “the guise of so-called ‘diversity, equity, and inclusion (DEI).’” Eliminates illegal preferences, discrimination, mandates, policies, programs, activities, guidance, regulations, enforcement actions, and requirements.
Bottom Line:	Any such preferences are discrimination in violation of Title VII of the Civil Rights Act of 1964. Title VII is to be enforced as (originally) written: no discrimination against – or preference for – any race, color, sex, religion, or national origin. The order does not forbid anything but preferences for persons of these classifications.
Confusing:	The Executive Order revokes Executive Order 11246 signed by President Johnson in 1965. Executive Order 11246 was titled “Equal Employment Opportunity” but introduced affirmative action into federal government grants/awards.  Therefore, when President Trump revoked Executive Order 11246, it sounded like he revoked equal employment opportunity, which is not the case. He is revoking affirmative action and any preference on the basis of race, color, national origin, sex, or religion.
Exception:	Veterans. Contractors/subcontractors and grant recipients may prefer veterans of the U.S. Armed Services over others.

Other points of the order:

• Every federal agency must include in every contract or grant award:
  • A term requiring the contractor or grant recipient to agree that its compliance with federal anti-discrimination laws is material to the government’s payment decisions.
  • A term requiring the contractor or recipient to certify that it does not operate any DEI programs that violate federal anti-discrimination laws.

• Under “Encouraging the Private Sector to End Illegal DEI Discrimination and Preferences,” the order
  • Directs all federal agencies to “take all appropriate action….to advance in the private sector the policy of individual initiative, excellence, and hard work…”
  • Directs the Attorney General, by May 21, 2025, to make recommendations for enforcing federal civil rights laws and taking other appropriate measures to “encourage the private sector to end illegal discrimination and preferences, including DEI.”
    • That report will identify:
      • The most egregious and discriminatory DEI practitioners.
      • A plan of specific steps/measures to deter DEI programs that constitute illegal discrimination or preferences.
      • For each federal agency, up to nine potential civil compliance investigations of:
        • Publicly traded corporations.
        • Large non-profit corporations or associations.
        • Foundations with assets of $500 million or more.
        • State and local bar and medical associations.
        • Institutions of higher education with endowments of over one billion dollars.
      • Other strategies to encourage the private sector to end illegal DEI discrimination and preferences.
      • Litigation appropriate for federal lawsuits.
      • Potential regulatory action.

The order does not:

• Abolish equal employment opportunity laws, Title VII, or other anti-discrimination laws.
• Outlaw DEI programs so long as the programs do not prefer employees or candidates of any particular race, color, national origin, sex, or religion.

 Next steps for federal contractors/subcontractors and federal grant recipients: 

• Ensure that any DEI programs or initiatives do not prefer any race, color, national origin, sex, or religion.
• Eliminate or revise policies that allow preferences; ensure policies are consistent with Title VII and the Civil Rights Act of 1964, but not affirmative action. Be aware that the organization could be subject, at some point in the future, to enforcement agency investigations.
• Make sure employees/applicants know that the organization is still committed to equal employment opportunity.

Next steps for employers who are not federal contractors/subcontractors or grant recipients: 

• Private-sector employers who are not federal contractors/subcontractors or grant recipients are not covered by this Executive Order.
• Conduct a — preferably privileged — assessment of all current DEI statements, policies, programs, and initiatives to ensure compliance with federal civil rights laws. Be sure that employment decisions are based on merit and that protections are in place to prevent employees or applicants from being adversely treated or impacted on the basis of race, sex, gender, or any other protected characteristics under federal or state law.
• Take proactive steps to ensure that workplace policies and practices ensure employment decisions based on merit and do not include illegal discrimination or preferences on the basis of race, color, sex, religion, or national origin.