Through several significant executive actions, President Donald Trump has begun reshaping the federal administration’s priorities and objectives for the next four years. Among them, he issued an executive order entitled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity,” aimed at halting “illegal” diversity, equity, inclusion and accessibility policies.
Among other things, one part of the order revokes 60-year-old Executive Order 11246 pertaining to federal contracts, issued in 1965 under then-President Lyndon Johnson. As amended over the years, it required federal contractors with contracts worth $10,000 or more to include nondiscrimination clauses in their contracts and to engage in affirmative efforts in employment and promotions so that minorities and women are employed at all levels of the workforce.
Among the long-standing affirmative action requirements, Executive Order 11246 and the U.S. Department of Labor’s regulations required federal contractors with 50 or more employees and a contract worth $50,000 or more to develop written affirmative action plans that included:
- An analysis of the contractor’s workforce by race and sex;
- A determination of whether the contractor is underemploying minorities or women in any job groups; and
- The establishment of goals and timetables for correcting any underemployment.
The Office of Federal Contract Compliance Programs (OFCCP) enforces the obligations of federal contractors and subcontractors.
Executive Order 11246’s revocation doesn’t change contractors’ nondiscrimination obligations under generally applicable laws such as Title VII, the Fair Employment and Housing Act (for California employers) and others. It will, however, impact federal contractors’ affirmative action planning and reporting practices.
President Trump’s order states that the OFCCP programs within the Department of Labor must cease “holding federal contractors and subcontractors responsible for taking ‘affirmative action’” — potentially lightening the administrative burden of planning and reporting requirements. Although, since contactors’ obligations under Executive Order 11246 are contractual, how the changes will be implemented and how federal contractors should proceed are questions being asked.
Contractors can continue complying with Executive Order 11246 and its regulatory scheme for 90 days — during which the OFCCP is expected to issue guidance. In the meantime, covered federal contractors should consult with their legal counsel on the impact of President Trump’s order on their affirmative action obligations and continue to monitor the situation for further developments, including federal guidance and potential legal challenges.
Employers should also note that revoking Executive Order 11246 doesn’t change existing federal laws with affirmative action obligations, including the Vietnam Era Veterans Readjustment Assistance Act and Section 503 of the Rehabilitation Act. These laws require covered contractors to take affirmative action with respect to protected veterans and individuals with disabilities, including affirmative action plans. Covered contractors should continue to comply with these laws.
James W. Ward, J.D., Employment Law Subject Matter Expert/Legal Writer and Editor, CalChamber
CalChamber members can read more about California’s State Contractor and Subcontractor Nondiscrimination Programs in the HR Library. Not a member? See how CalChamber can help you.
