Issued by President Lyndon Johnson in 1965, EO 11246 is the federal authority underpinning affirmative action for federal contractors and subcontractors.
In an executive order titled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity,” issued January 21, 2025, President Donald Trump revoked Executive Order 11246, which has long provided the Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) with legal authority for ensuring government contractors comply with anti-discrimination law and maintain affirmative action programs. Continuing his campaign promise to gut diversity, equity and inclusion (DEI) programs across the federal government, Trump’s order comes on the heels of his day-one executive orders eliminating DEI programs within the federal government. But this latest move might be the most impactful yet.
Issued by President Lyndon Johnson in 1965, EO 11246 is the federal authority underpinning affirmative action for federal contractors and subcontractors. OFCCP long has been tasked with advancing the hiring, promotion and fair pay of women and minority groups through EO 11246 and its regulations, as well as veterans and persons with disabilities under similar regulations. Among the requirements imposed by EO 11246, federal government contractors and subcontractors with at least 50 employees and a federal contract or subcontract of at least $50,000 are obligated to annually develop affirmative action programs, perform annual audits of the organization’s placement and pay practices, and assess their outreach and recruitment programs for underrepresented members of their workforce. OFCCP is charged with enforcing EO 11246 through regular compliance audits that can result in financial penalties for noncompliant contractors and even debarment. According to its website, in 2024 alone, the OFCCP recovered $12.1 million from federal contractors for alleged race- and/or gender-based hiring and compensation discrimination.
Under the new order, OFCCP must “immediately cease” (1) promoting “diversity,” (2) holding federal contractors and subcontractors responsible for taking “affirmative action,” and (3) “[a]llowing or encouraging [f]ederal contractors and subcontractors to engage in workforce balancing based on race, color, sex, sexual preference, religion, or national origin.” Additionally, all future contracts and grants must include terms by which the contractor or grant recipient certifies it is no longer carrying out DEI initiatives in violation of federal law. The Trump order revokes EO 11246 in its entirety, although it permits (but does not require) federal contractors to continue complying with its regulatory scheme for the next 90 days.
Contractors’ Affirmative Action Obligations for Individuals with Disabilities and Protected Veterans Remain
Notably, neither Section 503 of the Rehabilitation Act nor the Vietnam Era Veterans Readjustment Assistance Act (VEVRAA), nor their implementing regulations, are affected by the order. Both statutes create their own affirmative action obligations for federal contractors and subcontractors concerning individuals with disabilities and protected veterans, respectively. Like EO 11246, these include preparing annual affirmative action plans, self-audits, outreach and recruitment obligations, and posting and notification practices. However, while neither statute is explicitly mentioned, the order does prohibit OFCCP from “promoting ‘diversity’” or “[h]olding [f]ederal contractors and subcontractors responsible for taking ‘affirmative action,’” arguably covering OFCCP’s authority to enforce Section 503 or VEVRAA in any meaningful way.
Other reporting practices remain effective as well, including EEO-1 reporting, VETS-4212 reporting and equal pay reporting in certain states. Moreover, federal contractors and subcontractors must still comply with other federal and state-level nondiscrimination requirements, including those outlined in Title VII of the Civil Rights Act of 1964, the Equal Pay Act and Section 1981 of the Civil Rights Act of 1866.
What This Means for Federal Contractors
The executive order represents a radical change in government policy that throws the entire existence of race and gender-based affirmative action into limbo. Without the enforcement mechanism provided by EO 11246, contractors’ affirmative action obligations with respect to race and gender are all but extinct, and indeed potentially unlawful, under the terms of the order (after the 90-day grace period set forth therein).
Significantly, contractors are still required to comply with other federal and state-level nondiscrimination laws, including their affirmative action responsibilities outlined by Section 503 of the Rehabilitation Act and VEVRAA, which requires qualifying contractors to develop affirmative action programs related to individuals with disabilities and protected veterans. While there is some ambiguity whether the new order undercuts OFCCP’s enforcement capabilities related to these statutes, they appear to have survived at the moment. In addition, as has been the case with numerous areas of employment law for some time, it is possible that states will pass legislation or advance executive action to fill the void created by the executive order’s revocation of EO 11246.
Contractors previously subject to EO 11246, and those with continuing obligations under Section 503 and VEVRAA, should work with experienced employment counsel to evaluate changes to their compliance efforts moving forward.
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