Recent policy shifts under the Trump administration have prompted significant changes in private business employment practices, particularly concerning diversity, equity and inclusion (DEI) initiatives.
Of particular note, on January 21, 2025, President Trump signed Executive Order 14173, titled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity,” which has inspired substantial implications for many private employers.
What does Executive Order 14173 mean for businesses?
This executive order directs federal agencies to eliminate DEI programs internally and mandates a review of private-sector DEI practices. The order instructs agencies to identify and address any DEI-related activities in the private sector that may conflict with federal civil rights laws. While the federal government cannot directly mandate private businesses to abandon DEI policies, the language of the order suggests potential legal scrutiny of such initiatives.
Additionally, the executive order revokes Executive Order 11246, originally signed in 1965, which had prohibited federal contractors from engaging in employment discrimination and required affirmative action programs. With this revocation, federal contractors are no longer obligated to implement affirmative action measures for women and minorities, potentially leading to significant changes in hiring and employment practices among businesses engaged in federal contracting.
The administration’s actions have also included the removal of key officials associated with DEI initiatives. For instance, Jocelyn Samuels, a former commissioner for the U.S. Equal Employment Opportunity Commission (EEOC), was dismissed, signaling a shift in the administration’s stance on workplace diversity and inclusion efforts away from traditional approaches.
These developments suggest that private businesses may face increased scrutiny regarding their DEI programs. As such, employers should carefully review their current policies to ensure compliance with federal directives and anticipate potential legal challenges. While the executive order does not explicitly prohibit DEI initiatives in the private sector, it emphasizes adherence to merit-based employment decisions and warns against practices that could be perceived as discriminatory under federal law.
In light of these changes, it is generally advisable for businesses to consult with skilled legal counsel to more effectively navigate the evolving regulatory landscape. Employers should, for example, assess their DEI policies, training programs and hiring practices to ensure they align with the new federal guidelines while continuing to promote a diverse and inclusive workplace. Staying informed and proactive will be important as the administration’s policies continue to unfold, impacting employment practices across various industries.
