Navigating the Trump Administration’s New Executive Orders Targeting DEI Initiatives: Key Takeaways for Private Employers
Last week, the Trump administration introduced a series of executive orders aimed at reducing the scope of Diversity, Equity, and Inclusion (“DEI”) initiatives within federal agencies and among private employers working with the government. These new orders focus on curtailing programs that the administration believes may lead to reverse discrimination or violate principles of merit-based hiring and promotion. Though a significant portion of the administration’s executive orders apply to the federal government only, Section 4 of the administration’s January 21, 2025, executive order is squarely aimed at private employers. While many are skeptical of the constitutionality behind the administration’s new executive orders as infringing on private employers’ rights to free speech, their impacts are already being felt with major corporations such as Mark Zuckerberg’s Meta recently announcing the immediate termination of its major DEI programs due to the “changing legal landscape” surrounding DEI in the United States.
Entitled “Encouraging the Private Sector to End Illegal DEI Discrimination and Preferences,” Section 4 directs the heads of all agencies “with the assistance of the Attorney General” to take “all appropriate action . . . to advance in the private sector” the elimination of “illegal” DEI initiatives. The executive order further directs the Attorney General to “take other appropriate measures to encourage the private sector to end illegal discrimination and preferences, including DEI.” What those measures will be, exactly, remains to be seen. However, despite the constitutional concerns discussed above, the administration’s direct reference to: (a) publicly traded corporations; (b) large non-profit corporations or associations; (c) foundations with assets of $500 million or more; and (d) institutions of higher education with endowments over $1 billion have caused trepidation amongst private employers nationwide.
What’s more, the new administration’s swath of executive orders appear to align with the U.S. Supreme Court’s landmark 2023 decision in Students for Fair Admissions v. Harvard, which struck down race-based affirmative action in college admissions. As Hirschfeld Kraemer partner Derek Ishikawa highlighted in the aftermath of the decision, the Court ruled that race could no longer be used as a factor in the admissions process at public and private universities, declaring that such practices violated the Equal Protection Clause of the Fourteenth Amendment.
As was the case following Harvard, the administration’s recent DEI executive orders underscore the need for private employers to carefully consider their diversity efforts—both in hiring and in broader DEI strategies—so as not to engage in what the administration has amorphously categorized as “illegal” DEI related discrimination practices and preferences. With the Attorney General slated to provide the administration with a report containing recommendations for enforcing the administration’s DEI prerogatives against private sector employers within the next 120 days, employers are encouraged to act now to assess potential exposure under these new orders.
Recommendations for Private Employers
Whereas the administration’s new DEI executive orders are likely to be tied up in the courts should the Attorney General begin enforcement as to private employers, given their sweeping nature and the Harvard ruling, private employers should consult employment counsel to review and adjust their DEI programs to reduce potential legal and reputational risks in this area. Keys areas of focus should include:
1. Review Employee Handbooks: Employee Handbooks often contain references to organizational DEI initiatives and, in some instances, DEI-related mission statements and guidelines. Employers should immediately review handbooks to ensure that any references to DEI-related activities comply with the policies set forth in the new executive orders to avoid the potential for possible enforcement actions.
2. Assess Hiring and Promotion Practices: Employers should audit their hiring processes to ensure that they are based on job qualifications and performance, rather than demographic characteristics. While DEI initiatives for private employers are still very much lawful despite the new executive orders, private employers should be cautious about setting specific diversity quotas or goals unless mandated by law. This aligns with both the Trump administration’s executive orders and the Harvard decision, which stressed the importance of merit-based practices.
3. Reevaluate DEI Training Programs: Employers offering DEI trainings should assess the content and delivery of these programs to avoid potential conflicts with the new executive orders and the Harvard ruling. This is especially so for employers utilizing the services of third party vendors. Ensuring that such trainings do not advocate for discriminatory practices or promote divisive ideologies is key.
4. Documentation and Transparency: Employers should keep detailed records of their hiring practices, training programs, and any DEI-related initiatives to demonstrate that their practices comply with federal guidelines. Transparency in how diversity and inclusion efforts are implemented will help mitigate any potential liability.
5. Avoid Reactionary Measures Involving DEI Initiatives: While some employers may reduce, or outright eliminate, existing DEI initiatives in order to reduce potential risk under the new orders, doing so may have the opposite effect. Scaling back recruiting efforts for diverse job candidates, for example, could lead to claims that women, people of color or individuals who identify as being LGBTQ were not considered for jobs and promotions. Moreover, such employer conduct may also constitute evidence of “animus” in pending or future discrimination lawsuits. Furthermore, employers who choose to stop conducting pay audits may no longer be aware of discrepancies, such as gaps in pay for men and women, that could trigger future actions.
6. Be Prepared for Future Litigation: As these policies are enacted, it is likely that there will be legal challenges. Employers—especially those in the categories outlined in the administration’s January 25, 2025, executive order—should stay informed about any changes to the law and be prepared to make adjustments if needed to ensure their programs remain legally compliant. This includes staying updated on potential shifts in judicial interpretations, such as those in the Harvard case.
Next Steps for Private Employers
As the new administration’s approach to DEI initiatives continues to sharpen, it will be critical for employers to work closely with legal counsel to ensure compliance with both the new executive orders and existing federal regulations. Legal experts can help tailor DEI programs that promote inclusivity without violating anti-discrimination laws. By taking the right steps to reduce liability—such as reviewing hiring practices, reevaluating training content, and ensuring transparency—employers can better navigate these changes while maintaining an inclusive and legally compliant workplace. Hirschfeld Kraemer attorneys will continue to monitor this and related developments in the DEI landscape.
If you have any questions or concerns about how these new developments may affect your business, please reach out to Adam R. Maldonado in Hirschfeld Kraemer LLP’s San Francisco Office. Adam can be reached at amaldonado@hkemploymentlaw.com or (415) 835-9075.