The acting secretary of labor issued a new directive aimed at federal contractors last week that could put them in an impossible situation as they try to navigate new DE&I rules, one lawyer told HR Brew.
In an effort to comply with a Trump executive order aimed at ending DE&I initiatives, Vincent Micone’s Jan. 24 directive immediately ended all “investigative and enforcement activity” that was previously required as part of the Equal Employment Opportunity (EEO) order 11246. Regulations enacted under the order and pending cases were thrown out. It also essentially nullified the Office of Federal Contract Compliance Programs (OFCCP), which ensured federal contractors’ compliance with the law.
Background on the EEO. The order was signed by President Lyndon B. Johnson in 1965, and said that federal contractors could not discriminate against applicants or employees based on their race, gender, or religious affiliation, or inquiries about compensation. Federal contractors were also required to file compliance reports detailing employment statistics, policies, and hiring programs. Employers that did not comply risked losing their federal contracts. The secretary of labor was required to notify the EEOC in the event of a potential violation of the Civil Rights Act of 1964.
It marked the first time a cabinet official was responsible for enforcement of equal employment opportunities for federal contractors, according to the DOL website. “Executive Order 11246 became a key landmark in a series of federal actions aimed at ending racial, religious and ethnic discrimination.”
Implications of the directive. Nisha Verma, a partner in the labor and employment practice at the law firm Dorsey & Whitney, told HR Brew that Trump’s executive order and the DOL’s directive puts HR leaders at federal contractors in a difficult position. Any DE&I initiatives contractors were pursuing two weeks ago to comply with the previous law could now be in violation of new regulations.
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“The Trump executive orders basically makes it a violation of Trump’s order to do exactly what contractors were required to do for 60 years under the previous order,” she said. “If you keep doing what you were doing five days ago, you’re in trouble.”
The Trump administration hasn’t shared what it considers DE&I, so it may be hard for contractors to know if they’re engaging in unlawful practices now. “It absolutely creates a chilling effect where any company that wants to stay out of the line of scrutiny of the federal government is just going to back up all together…the entire scheme is designed to create a pullback, which is exactly what we're seeing,” Verma said.
Now, federal contractors will have to reevaluate the recruitment and hiring practices they built to comply with the 1965 EEO and decide if they should fight to keep them moving forward. “You have to prove to the government it’s not illegal,” she said, noting that it’s unclear how successful companies will be if they try to push back against the government’s new rules. “There’s constitutional law experts that are probably looking at that right now. But for the vast majority of businesses that just want to go out in the world and do what they want to do best, it just may not be worth the fight.”