After the DEI Executive Order

February 14, 2025

What Are the Compliance Requirements for Private Employers?

In January 2025, President Trump issued the “Ending Illegal Discrimination and Restoring Merit-based Opportunity” executive order, which significantly impacts private employers, particularly those that implement diversity, equity, and inclusion (DEI) programs. This order aims to curtail employment practices that provide preferential treatment based on race, sex, or other protected characteristics, reinforcing a strict adherence to merit-based hiring and advancement.


For private employers, especially federal contractors and organizations with established DEI initiatives, understanding the legal implications of this order is essential to ensure compliance while mitigating potential liabilities.

 

Key Legal Implications for Private Employers

  • Revocation of affirmative-action mandates for federal contractors. The order revokes prior mandates, including Executive Order 11246, which required federal contractors to adopt affirmative-action programs to address historical disparities in hiring. The revocation effectively eliminates federal obligations for contractors to develop workforce diversity plans or set hiring goals based on demographic representation.
  • Regulatory scrutiny of employment practices. Federal agencies, particularly the Department of Justice (DOJ) and the Equal Employment Opportunity Commission (EEOC), have been directed to investigate employment policies that could be deemed discriminatory under the new legal framework. Employers must ensure that any DEI initiatives remain neutral and do not grant or deny opportunities based on race, gender, or other protected classifications.
  • Merit-based employment enforcement. The executive order underscores the importance of meritocracy, requiring employers to justify employment decisions strictly based on qualifications, experience, and performance. Organizations implementing hiring quotas, targeted recruitment efforts, or employee resource groups may need to re-evaluate these programs to avoid potential litigation risks.
  • Compliance audits and investigations. The attorney general is tasked with formulating an enforcement plan that includes identifying employers whose DEI initiatives may conflict with federal non-discrimination laws. Employers should anticipate increased oversight, potential audits, and legal challenges if their policies include race- or gender-conscious hiring, promotions, or training programs.

 

Compliance Strategies for Employers

Given the legal uncertainties surrounding this order, private employers must take proactive steps to avoid violations and potential legal repercussions.

  • Conduct an internal policy review. Employers should undertake a comprehensive audit of all DEI programs, training materials, hiring practices, and workplace policies. Any language or initiatives that suggest preferential treatment based on race, gender, or ethnicity should be reassessed to ensure alignment with the updated legal framework.
  • Emphasize equal opportunity and non-discrimination. To remain compliant, companies should reaffirm their commitment to equal opportunity without the use of race- or gender-based preferences. Employee training programs should be reviewed to ensure they focus on compliance with federal anti-discrimination laws rather than implicit bias or identity-based initiatives.
  • Monitor federal guidance and legal challenges. Since the implementation of this order may lead to litigation and policy revisions, employers should stay informed of further legal developments from the DOJ, EEOC, and other regulatory bodies. It is advisable to consult employment-law attorneys to navigate these changes effectively.
  • Prepare for increased scrutiny and potential investigations. Employers, particularly those with government contracts, should be prepared for potential audits and legal reviews. Documentation demonstrating that hiring and promotion decisions are based solely on qualifications and performance will be crucial in defending against any claims of discriminatory practices.

 

Conclusion

The repeal of affirmative-action mandates and the increased focus on merit-based employment and advancement signal a substantial shift in workplace compliance requirements for private employers. Organizations that have historically engaged in DEI initiatives must carefully reassess their programs to ensure they do not run afoul of federal regulations. While diversity efforts are not outright prohibited, any policies that confer advantages or disadvantages based on protected characteristics may expose employers to legal liability.


To mitigate risks, employers should prioritize objective hiring and promotion criteria, eliminate race- or gender-based preferences, and stay informed on regulatory updates. Consulting legal experts and conducting internal audits will be critical steps in ensuring compliance with this evolving legal landscape.


Krupa Kotecha is an attorney who specializes in labor and employment-law matters at the Royal Law Firm LLP, a woman-owned, women-managed corporate law firm that is certified as a women’s business enterprise with the Massachusetts Supplier Diversity Office, the National Assoc. of Minority and Women Owned Law Firms, and the Women’s Business Enterprise National Council.


Krupa Kotecha wrote this article which was featured in Businesswest. Click here to visit their website.

July 25, 2025
On June 27, 2025, the U.S. Supreme Court ruled in Trump v. CASA that federal district courts cannot block executive orders for the entire country. The Court held that such broad injunctions exceed the authority Congress granted under the Judiciary Act of 1789. Courts may now only stop enforcement for the parties in the case—not for everyone else. What Happened in the Case President Trump issued Executive Order 14160 in early 2025. It denies birthright citizenship to children born in the U.S. if neither parent is a citizen or lawful permanent resident. Multiple lawsuits followed. Three federal courts blocked the order nationwide. The Supreme Court disagreed. It sent the case back and told the lower courts to revise the injunctions to cover only the named plaintiffs. The Court did not decide whether the order itself violates the Constitution. It ruled only on how far a court’s injunction can reach. Why It Matters to Employers The ruling affects how quickly and widely federal courts can stop controversial policies, especially during fast-changing political cycles. Employers have often relied on national injunctions to pause new mandates on wages, workplace safety, pay transparency, and non-compete agreements. This decision limits that option. The Court said nothing about injunctions under the Administrative Procedure Act, which governs agency rules. But the opinion raises doubts about whether even those can continue on a nationwide scale. Justice Kavanaugh suggested they might, but the Court left that question for another day. What This Means for You No nationwide protection unless you sue If your business is not part of the case, you likely cannot rely on someone else’s win. You must litigate directly to get relief. Rules may take effect in one state and not another A federal court in Texas may block a rule, while a court in New York upholds it. National companies may face conflicting rules and inconsistent enforcement. Trade groups cannot shield you Even if your industry association wins an injunction, it may apply only to their members or to the parties named in the lawsuit. Older rulings may now shrink Past national injunctions—on vaccine mandates, non-compete bans, overtime rules, or joint-employer standards—could be challenged or narrowed based on this ruling. More class actions are likely Some plaintiffs may now push for class certification to restore broader relief. Employers could face more complex litigation as a result. Next Steps for Employers Identify any current or past rules your business has relied on that are being blocked nationwide. Confirm whether you were covered by name or just assumed you were protected. Reassess your risk exposure for pending federal actions under OSHA, the EEOC, the DOL, or the NLRB. Monitor APA-based injunctions to see whether courts continue to grant broad relief under that statute. Consider joining strategic litigation early if new executive orders or agency rules would harm your operations. You cannot assume another company’s lawsuit will protect you. The Court narrowed that path. To block a federal mandate, you may now need to act alone—or join the fight directly. Michael P. Lewis is an attorney at The Royal Law Firm with experience advising clients through the litigation process. Michael helps employers resolve workplace challenges with focus, precision, and judgment. He counsels and defends businesses across Massachusetts and Connecticut, handling matters involving discrimination, harassment, retaliation, wage and hour claims, restrictive covenants, and breach of contract. His practice includes litigation in state and federal courts and before administrative agencies. If your business has any questions on this topic or any other matters, please do not hesitate to contact the attorneys at The Royal Law Firm at 413-586-2288.