WHAT’S AN EMPLOYER TO DO: AA, DEI, EEOC, VEVRAA AND §503?

The Executive Orders, Defending Women From Gender Ideology Extremism and Restoring Biological Truth to the Federal Government signed by President Donald Trump on January 20, 2025 and Ending Illegal Discrimination and Restoring Merit-Based Opportunity signed on January 21, 2025, have left employers with more questions than answers about how to comply going forward with anti-discrimination laws impacting the workplace.

On the one hand, the anti-discrimination laws are in full force and effect. On the other hand, an employer could violate these same federal anti-discrimination laws by using affirmative action or Diversity Equity and Inclusion programs which consider a person’s protected status as a “plus” in employment decisions.

This Client Alert is intended to provide some structure and guidance about what we do know, and what remains unclear in order to inform best practices while we await further guidance from Washington.

What We Know

Most importantly, what we know is that the laws prohibiting discrimination under federal law are alive and well.  The EOs did not affect Title VII of the Civil Rights Act, the Age Discrimination in Employment Act, the Genetic Information Non-Discrimination Act, the Rehabilitation Act, Vietnam Era Veterans Readjustment Assistance Act, the Pregnancy Fairness Act, the Americans with Disabilities Act, or other laws enacted by Congress which prohibit discrimination in employment. With that said, various federal agencies’ interpretation, expansion, or application of these laws in their regulations and guidance  may have changed due to the EOs.

To illustrate, the Equal Employment Opportunity Commission has taken down its Guidance on Sexual Orientation and Gender Identity (SOGI) Discrimination, and notes on its website that its Guidance on Sex Based Discrimination is being reviewed for compliance with the EO. https://www.eeoc.gov/sex-based-discrimination.  The EEOC’s Sex Based Discrimination Guidance includes protection based on gender identity and sexual orientation interpretations.  Such Guidance is inconsistent with the EO on Gender Identity and Biological Truth which declared it the policy of the United States to recognize only two sexes, male and female, which are not changeable. The EO on Gender Identity and Biological Truth expressly directed the EEOC to rescind its “Enforcement Guidance on Harassment in the Workplace” (April 29, 2024).  Agencies were directed to remove “gender” from their regulations and substitute the word sex.

Similarly, the EO Ending Illegal Discrimination expressly rescinded EO 11246 which required federal contractors to take affirmative action regarding minorities and women. The EO directs the Office of Federal Contract Compliance to immediately cease allowing or encouraging federal contractors to engage in workforce balancing based on race, color, sex, sexual preference, religion or national origin.  It further prohibits federal contractors from considering race, color, sex, sexual preference, religion and national origin in ways that violate the nation’s civil rights laws.  With that said, the EO was clear in stating that every contract or grant shall include a term requiring that federal contractors and grant recipients affirm “its compliance with all applicable federal anti-discrimination laws.”   At the same time, however, the contractor or grantee also must certify that it does not operate any programs promoting DEI that violate federal anti-discrimination law.

The distinction between compliance with the federal non-discrimination laws and not operating DEI programs that violate such laws has spawned confusion; how do employers comply with anti-discrimination laws without DEI initiatives?  You may recall that not too long ago, around 2019 when the DEI verbiage exploded, many were asking how to distinguish the notion of “equity” from “equality;” then, that was the question confounding employers and human resource professionals after President Joe Biden signed Executive Order 13985 and Executive Order 14035.   The new EOs appear to restore the notion of equality while condemning the consideration of protected status in a way that provides an advantage based on such factor rather than merit.   EEOC Acting Chair Andrea Lucas commenting on the EOs, stated that :

Consistent with the President’s Executive Orders and priorities, my priorities will include rooting out unlawful DEI-motivated race and sex discrimination; protecting American workers from anti-American national origin discrimination; defending the biological and binary reality of sex and related rights, including women’s rights to single‑sex spaces at work; protecting workers from religious bias and harassment, including antisemitism; and remedying other areas of recent under-enforcement.

She noted that the EEOC, under her leadership, will “focus on equal opportunity, merit, and colorblind equality.” https://www.eeoc.gov/newsroom/president-appoints-andrea-r-lucas-eeoc-acting-chair

For federal contractors subject to the jurisdiction of the OFCCP,  the Acting Secretary of Labor issued Order 03-2025 to the OFCCP, OALJ, and ARB directing them to immediately cease and desist all investigations and enforcement activity under the rescinded EO 11246.   These agencies were directed to notify all parties by January 31, 2025 that the EO 11246 component of any pending review or investigation has been closed.  Further, although the EO expressly did not rescind VEVRAA or Section 503, the DOL Order provides that those components of any pending review or investigation will be held in abeyance. The EO, however, provided that for 90 days from the date of the EO, federal contractors may comply with the current regulatory scheme in effect on January 20, 2025.

As We Are Waiting for Guidance

Under the EO, private sector employers are encouraged to end illegal DEI discrimination and preferences; that is, those practices that consider one’s protected status as a plus, or hiring goal or quota. Agencies have been directed to advance in the private sector the “policy of individual initiative, excellence, and hard work.”  Within 120 days, the agencies have been directed to submit a report to the Assistant to the President for Domestic Policy containing recommendations for enforcing civil rights law and taking other measures to encourage the private sector to end illegal discrimination and preferences, including DEI. The report is to identify the most egregious and discriminatory DEI practices. Further, each agency is to identify nine potential civil compliance investigations of publicly traded corporations, large non-profit corporations or associations, foundations with assets of 500 million dollars or more, and State and local bar and medical associations, and institutions of higher learning with endowments of 1 billion dollars.

This morning, Acting Chair Lucas announced that the EEOC has already taken the following actions for her agency:

  • Defended the biological and binary reality of sex and related rights, including women’s rights to single-sex spaces at work.
  • Removed the agency’s “pronoun app,” a feature in employees’ Microsoft 365 profiles, which allowed an employee to opt to identify pronouns, content which then appeared alongside the employee’s display name across all Microsoft 365 platforms, including Outlook and Teams. This content was displayed both to internal and external parties with whom EEOC employees communicated.
  • Ended the use of the “X” gender marker during the intake process for filing a charge of discrimination.
  • Directed the modification of the charge of discrimination and related forms to remove “Mx.” from the list of prefix options.
  • Commenced review of the content of EEOC’s “Know Your Rights” poster, which all covered employers are required by law to post in their workplaces.
  • Removed materials promoting gender ideology on the Commission’s internal and external websites and documents, including webpages, statements, social media platforms, forms, trainings, and others.

Although some larger organizations appear to have doubled down on their DEI commitment focusing more on “inclusion” than “equity”, it would be prudent for employers to review their policies and practices to evaluate them in light of the EOs and shift in agency interpretation.  In addition to following the lead of Acting Chair Lucas, employers may want to consider the following:

  1. Carefully evaluate DEI policies, workplace practices, and affinity groups to assess whether they may be found “illegal;” that is, essentially resulting in reverse discrimination against other groups as a result of favoring some protected classes (e.g., women and minorities) over others in the workplace without regard to merit.
  2. Review handbooks to assess policies, including policies relating to gender and sexual orientation, as well as same sex bathroom policies.
  3. Assess whether to move forward with VEVRAA and Section 503 affirmative action plans and initiatives, or to hold them in abeyance waiting further guidance.
  4. Assess applicant tracking systems, and how information regarding women and minorities is utilized, if collected, to evidence or refute discrimination; note, policies or practices which appear neutral on their face which have an adverse impact on protected classes has long been recognized as illegal discrimination.
  5. Assess how to best document employment decisions to show decisions are based on merit, with regard to one’s protected status.
  6. Assess print media language and outreach activities for compliance with the EO non-discrimination obligations.
  7. Renegotiate contracts, as needed, containing flow down obligations for AA and DEI initiatives.
  8. Review job descriptions and postings referencing DEI and/or AA initiatives, beyond VEVRAA and Section 503.
  9. Evaluate any conflicts between applicable federal and state laws, including state laws which expressly protect gender identity and sexual orientation or require affirmative action.
  10. Assess the financial impact on funding and grants due to the OMB’s assessment of the impact of the EOs on availability of federal funds.

Conclusion

In large part, the country is going back to the future. The notion of “equal opportunity” based on merit has taken the forefront again as the EEO standard.   We can expect to see increased litigation and claims of reverse discrimination from groups who were disadvantaged by DEI initiatives which gave a “plus” to protecting groups in workplace decisions.  We also will see renewed litigation over how gender identity and sexual orientation fit into the EEO protections under “sex”.  As with marijuana, we also are likely to see tension between the states and the federal government regarding EEO matters, with some states refusing to align with the federal notions of EEO, including state laws which protect classes based on gender identity and sexual orientation.

These recent Executive Orders and subsequent changes to federal agency regulations and guidance warrant careful review by employers.  Our Labor, Employment and Benefits attorneys are ready to assist employers in drafting, reviewing and revising employment-related policies and practices in light of these recent Executive Orders to optimize both compliance and best practices.

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The Najjar Employment Law Group, P.C. was established to provide employers with a practical approach to human resource issues. Our objective is to assist clients in meeting their business goals while minimizing employee-related conflicts. We provide clients with informed advice on not only the most recent developments in the law, but also current trends for best practices in employment and compensation matters.

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