New York
CNN
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President Donald Trump this week rescinded a nearly 60-year-old executive order that prohibited government contractors from discriminating in their hiring, firing, promotion or pay practices.
Replacing it is a new requirement that those employers certify that they do not have what he termed “illegal” diversity, equity, and inclusion programs. He also ordered each federal agency to identify up to nine targets for federal investigations into their DEI practices to see if they should be judged “illegal.” That includes publicly-traded private corporations, large non-profit corporations or associations and major foundations.
The order that Trump rescinded, originally signed by President Lyndon Johnson, applied to virtually every major business and many small companies that together employ about a quarter of workers in the United States. It had remained in force through both Democratic and Republican administrations, including Trump’s own first term.
And his action has sparked concern that even businesses that see a value in having a diverse work force and leadership will be nervous about reaching out to women, minorities and other protected classes, and that they’ll drop those efforts rather than risk running afoul of the new administration.
The actions make clear that Trump is seeking to do more than rid the federal government itself of controversial DEI programs. It seeks to put an end to many efforts by a wide range of employers that had been taking steps to have a more diverse work force. The little-known 60-year-old order allowed investigations into the contractors’ employment practices and often found instances of discrimination even the affected employees didn’t know about. And the threat of those investigations, and the requirements under the rules, was a powerful driver of diversity efforts across the economy.
Critics of the move are concerned that many employers will see Trump’s action as a signal that no longer have to worry about facing penalties from discriminating in their employment practices.
“Those who have been more reticent and reluctant (to do outreach) will get the message that all bets are off, and you can do whatever you want,” said Jocelyn Frye, president of National Partnership for Women & Families, a public interest group.
Trump portrayed the effort as insuring merit-based employment. He said his actions will insure “hiring, promotions, and performance reviews will reward individual initiative, skills, performance, and hard work and not, under any circumstances, DEI-related factors, goals, policies, mandates, or requirements.”
But the executive order that he rescinded, known as EO 11246, did “not permit quotas, preferences, or set asides. They are strictly forbidden,” according to the Department of Labor’s stated rules. It did require businesses that have government contracts to file annual data on their employment practices, and those reports could lead to a finding of discrimination that required employers to compensate workers who were found to have been discriminated against.
About one quarter of those who were found to have been discriminated against, and who received compensation, were white males, said Craig Leen, head of the Labor Department office that oversaw the order during most of Trump’s first term.
Leen said rescinding the order does not give a green light to contractors to start discriminating. He said they must still comply with Title VII of the 1964 Civil Rights act that prohibits discrimination.
“I think they’re going to continue to enforce the non-discrimination,” said Leen, who is now a private sector attorney. He said Trump’s move is due to conservative suspicion that companies are hiring based on race or gender-based demographics.
“There has been a concern on the Republican side for a long time, that sometimes (contractors) do have preferences and quotas,” he said.
But Leen defends employer efforts to have a more diverse work force. He said those who aren’t seeking out under-represented groups during the hiring process before making a hiring or promotion decision aren’t just hurting themselves, they’re hurting American economy overall.
“You can’t have everyone hired by word-of-mouth and they all happen to be (white) men. That violates Title VII, whether 11246 is here or not,” he said. “So if you really want to do merit-based hiring, which is what (Trump’s executive order) talks about … means that you have to audit yourself every year. You need to make sure you’re giving women the same opportunity to be promoted as men.”
But Title VII does not require companies to provide information on their employment practices. Without Executive Order 11246, it will be harder for people to confirm that they’re being discriminated against, and far fewer checks on employers who do practice discrimination, either consciously or unconsciously. Most people who don’t get a job don’t know anything about the decision making process.
“You have to know about it to file a complaint about it,” said Frye of the National Partnership for Women & Families. Under the rescinded order 11246 the Labor Department could “go on site and see if employers are living up to their obligation. This erodes their ability to do that.”
Even some employers who believe they benefit from a diverse workforce might back away from outreach and other programs for fear or being targeted under the new policies.
“They have to certify they do not have an illegal DEI program. That has not been defined within the four corners of the executive order,” said David Fortney, an attorney who worked in the Labor Department under the George W. Bush’s administration. “I’ve got clients starting to ask that question. The answer is we don’t know for sure. Pardon the pun, I don’t know if there’s a black and white answer on that.”
“My experience is most clients do firmly believe that having a diverse workforce in a broad sense does yield better results,” he said. “I think that potentially will have some level of chilling effects.”
