By Grace Detwiler*, Christine Lamb and Liz Hartsel 

On January 21, 2025, President Trump issued the executive order Ending Illegal Discrimination and Restoring Merit-Based Opportunity (the “Order”), which revokes equal opportunity requirements for federal contractors and directs federal agencies to enforce “anti-discrimination laws” in hiring and employment practices. The Order prohibits what it describes as “illegal preferences and discrimination” and directs federal agencies to review and potentially take action against private sector diversity, equity, and inclusion (“DEI”) initiatives that they describe as discriminatory. The Order specifically repealed Executive Order 11246, Equal Employment Opportunity, originally issued by President Lyndon B. Johnson in 1965. 

What Does This Order Mean for Private Employers? 

The scope of the executive branch and agency authority over private-sector employers is not yet clear. On its face, the Order targets only the Executive Branch (including federal offices, departments, and agencies), meaning state agencies and private-sector employers are not directly subject to the requirements of the Order. Private employers may, however, be indirectly impacted by the portion of the Order requiring the Attorney General to “encourage the private sector to end illegal discrimination and preferences, including DEI.” As a result of this directive, some private sector employers, such as Google, McDonalds, and Walmart, have chosen to rescind their DEI programs. 

In addition, the Order may increase private or federal legal challenges to corporate DEI programs. Over the past year, multiple lawsuits have been filed against companies with race- or gender-based initiatives, arguing that the initiatives constitute unlawful discrimination. With the federal government now taking a more active role in scrutinizing employment policies, employers with DEI programs may face heightened scrutiny and legal risk. 

What Should Employers Do Now? 

Private employers considering whether to pull back their DEI programs should consider several issues.   

• First, it is important to note that the Order does not amend or repeal federal or state anti-discrimination laws. Employers must continue to comply with applicable anti-discrimination laws, including the Civil Rights Act of 1964 (Title VII), the Americans with Disabilities Act, The Age Discrimination in Employment Act, and the Colorado Anti-Discrimination Act. 

• Second, employers should evaluate the potential harm that may result from eliminating DEI programs. These could include possible impacts on the retention of employees who rely on such policies, backlash from customers and business partners who value inclusive practices, or an increase in discrimination complaints from employees who believe they are no longer protected from illegal discrimination or retaliation. 

• Third, private employers should be mindful that state-level policies can create added complexities. While the federal government has moved away from affirmative action requirements, some states continue to have laws that either require or encourage diversity-based hiring initiatives. Employers operating in multiple states must navigate potentially conflicting obligations and ensure compliance with federal and state regulations. 

The full impact of the Order will depend on how federal agencies implement its directives and what legal challenges arise in response. Employers should stay informed about ongoing regulatory and judicial developments and assess whether any adjustments to their workplace policies are necessary to maintain compliance with the evolving legal landscape. If you have questions about how this Order may impact your business, please contact a member of the Fortis Law Partners employment law team.  

* Grace is a Fortis Law Partners intern and law student at the University of Colorado, Boulder.