2025 United States Executive Orders, DEI, and Employment: how In-house Lawyers can help Business

Remind me, what’s an executive order?

Executive orders are instructions ordered by the president of the United States that direct government companies and officials to take particular actions. While they are not laws, they have the force of law and impact how existing laws are implemented or implemented.

Executive orders affect the companies of the executive branch and therefore do not need the approval of Congress. They need to be within the president’s constitutional authority and may be challenged in court if considered unconstitutional.

Executive orders may be rescinded, overturned by future presidents, employment or employment challenged in court, and enforcement priorities can alter during any administration.

The brand-new administration’s actions have far-reaching effects beyond executive orders. For more on mitigating risk, international businesses can take brand-new opportunities by staying active.

Implications of the executive orders for DEI efforts and work in private-sector companies

On Jan. 21, President Trump released “Ending Illegal Discrimination and Restoring Merit-Based Opportunity,” which reverses numerous previous executive orders and memoranda, consisting of Executive Order 11246 (EO 11246) signed in 1965 by President Lyndon B. Johnson.

EO 11246 required every government contract to include a statement that the specialist will not victimize any staff member or candidate for work based on race, employment creed, color, or nationwide origin.

Despite President Trump’s new executive order, the underlying federal anti-discrimination law remains unchanged for private-sector workers.

However, the executive order signals that there may be altering enforcement concerns in the new administration. The order directs all federal firms to “fight unlawful private-sector DEI preferences, requireds, policies, programs, and activities.”

In December 2024, President-elect Trump tapped Harmeet K. Dhillon to lead the Justice Department’s civil workplace, employment indicating his record of “suing corporations who use ‘woke’ policies to discriminate versus their workers.”

In addition to revoking EO 11246, the Jan. 21 executive order instructs each company of the federal government to recognize “up to 9 prospective civic compliance investigations” of economic sector entities within 120 days of the order – by May 21, 2025.

The economic sector entities subject to these examinations include openly traded corporations, big nonprofits – consisting of bar associations – big structures, and universities whose endowments exceed US$ 1 billion.

Organizations that may be targeted should ask:

– What is my organization’s risk tolerance?

– How will employees react to the business’s actions?

– How will clients and stakeholders respond?

What internal counsel needs to think of:

Assess any federal contracts and grants

– Determine if they contain any terms or conditions connected to DEI that might clash with present laws and regulations

Review your organization’s existing DEI policies to understand your threat

– Prepare for increased analysis and possible civil compliance examinations

Document, document, file

– Hiring and recruitment procedures

– Performance assessments and promotion choices

– Training products and attendance records

– Any changes to DEI policies

Implications for federal contractors

To name a few procedures, the Jan. 21 Executive Order needs the heads of federal agencies to consist of specific terms in every contract or grant award:

– “A term requiring the contractual counterparty or grant recipient to agree that its compliance in all aspects with all relevant Federal anti-discrimination laws is material to the government’s payment decisions for functions of area 3729( b)( 4) of title 31, United States Code”; and

– “A term needing such counterparty or recipient to certify that it does not operate any programs promoting DEI that break any applicable Federal anti-discrimination laws.”

Section 3729 of title 31 of the United States Code is an arrangement of the US False Claims Act, a federal law that imposes civil penalties on those who make incorrect claims to the government in order to affect the payment or receipt of money or home.

The certification requirement carries a prospective threat of litigation for federal specialists under the False Claims Act. In-house attorneys at federal contractors hence have a particular interest in guaranteeing their organization’s policies, treatments, practices, communications and content, are examined. Assess if adjustments are required to alleviate the danger of litigation.

Executive orders targeting prohibited migration

President Trump’s preliminary flurry of executive orders included lots of – such as the Jan. 20 executive order “Protecting the American People Against Invasion” – intended at restricting unlawful migration and deporting unlawful immigrants. The orders require enforcement actions by federal agencies against unlawful immigration.

In-house lawyers ought to think about evaluating their organization’s work eligibility verification process. They may also want to think about whether the company is gotten ready for reacting to an I-9 audit or a worksite enforcement action (or raid) by migration enforcement agencies.

Sectors that might be particularly affected include agriculture, hospitality, and other industries such as building. From 2020-2022, 42 percent of crop farmworkers held no work permission, according to the US Department of Agriculture. The American Immigration Council approximates that more than one million undocumented immigrants operate in hospitality, employment representing 7.1 percent of the labor force.

In-house counsel have an essential function to play in developing and ensuring constant application of the Form I-9 and E-Verify guidelines the federal government uses to implement and implement immigration law, shares John W. Mazzeo, AGC, director of I-9 and E-Verify compliance for Vertical Screen, Inc., in a 2024 ACC Docket post.

Have a look at useful checklists of considerations relevant for internal attorneys on the subject of I-9 audits and worksite enforcement actions.

If a company does not comply with a civil administrative warrant provided by US Immigration and Customs Enforcement (ICE), there is a risk that the agency could begin an I-9 audit if they felt a company was obstructing their need to jail a non-citizen worker, or sometimes obtain a criminal warrant from a judge if actions support it.

Steps internal counsel need to think about:

– Determine the number of workers might potentially be affected

– Review your organization’s employment eligibility confirmation process

– Ensure your organization’s procedure is documented and defensible

– Implement and impose clear policies

– Monitor legal developments, including litigation and enforcement assistance

Mitigate danger, stay nimble, and take new opportunities

The recent executive orders will substantially affect global companies. Legal departments and in-house counsel will need to help their companies comprehend and adjust to changes, guaranteeing compliance or litigating when suitable.

A number of the brand-new administration’s choices will play out over the coming months, including brand-new executive orders and legal obstacles. The Docket will continue to keep track of developments. Global internal attorneys ought to prepare for quick advancements associated with:

Trade and tariffs. On Feb. 1, President Trump purchased the imposition of a 25-percent tariff on imports from Canada and Mexico, and 10-percent additional tariffs on imports from China. The previous two were both delayed by a month as the administration takes part in settlements. Meanwhile, China has started its own vindictive measures on US items. He had actually formerly revealed his intent to impose 25-percent escalating tariffs on Colombia (an action that was eventually not taken).

Technology and intellectual property. One of the president’s very first actions was to rescind the previous administration’s AI executive order. The new administration also extended a grace duration for TikTok’s approaching ban, sending waves throughout the innovation sector, both in the United States and abroad.

Energy, environment, and health. The president likewise withdrew the United States from the Paris Climate Agreement and employment the World Health Organization, putting an early focus on American energy independence and away from the previous administration’s international sustainability efforts.

Steps in-house counsel must think about:

– Assess the impact of potential tariff boosts on supply chain and company connection.

– Assess the organization’s dependency on social networks platforms, such as for marketing functions, and the prospective requirements to backup social media data and possessions in the occasion their preferred platform stops to be available.

– Consider how advancements in the brand-new administration’s approach to environmental, sustainability and governance concerns may affect the organization’s ESG method.

Disclaimer: The details in any resource in this website ought to not be construed as legal recommendations or as a legal viewpoint on particular facts, and should not be thought about representing the views of its authors, its sponsors, and/or ACC. These resources are not meant as a definitive declaration on the subject attended to. Rather, they are meant to act as a tool supplying practical guidance and recommendations for the busy internal specialist and other readers.