Although Executive Order 11246 is revoked, the Office of Federal Contract Compliance Programs (OFCCP) is still finding relevance.  Section 4212 (VEVRAA) and Section 503 (Disabled) Affirmative Action Plans (AAPs) are required by regulation, and OFCCP has stated that the agency will resume audits of these plans at some point.  More recently, with a new Director in place, the OFCCP may be the first line of attack against federal contractor Diversity, Equity, and Inclusion (DEI) programs.

In fact, a letter by America First Legal (AFL) sent on February 14, 2025, formally requested that the OFCCP conduct DEI investigations based on the Equal Opportunity Clause (41 C.F.R. § 60-1.4(a)) and President Trump’s Executive Order 14713 “Ending Illegal Discrimination and Restoring Merit-Based Opportunity.” Specifically, AFL stated the following:

… [OFCCP] should go further and immediately surge available resources to investigations of open and notorious prohibited discrimination. All Federal government contracts already include an equal opportunity clause requiring the contractor to commit that employment decisions related to its applicants and employees will be made “without regard to their race, color, religion, sex, sexual orientation, gender identity, or national origin.” 41 C.F.R. § 60-1.4(a). This clause covers but is not limited to decisions in hiring, promotion, demotion, transfer, recruitment, layoff or termination, rates of pay or other forms of compensation, and selection for training, including apprenticeships. Id. The equal opportunity clause is enforceable in every Federal contract and subcontract. 41 C.F.R. § 60-1.4€. When a contractor or subcontractor violates the equal opportunity clause, the Secretary of Labor may cancel, terminate, or suspend contracts and declare it ineligible for further federal government contracts, among other sanctions. 41 C.F.R. §§ 60-1.26–27.

There is a question about the validity of regulations with the EO revoked.  AFL believes that the Executive Order (EO) 11246 regulations are still in effect, given the action requested above from the letter and the regulatory citations noted.

Given all, the Trump administration has ordered the OFCCP to review AAPs previously submitted by federal contractors to assess whether the contractors should be investigated or penalized for discriminatory employment practices.  Although federal contractors do not use quotas in hiring and selections, the review, in a best guess, will likely ask for information on hiring and promotional practices to determine how screening, selection, and final decisions are made as well as diversity succession and more.  The federal contractor will have to prove meritocracy in its process by showing that the selections and decisions were made by identifying the most qualified. 

What used to be legal, such as mentorship programs for women or racial minorities and employee resource groups that target a specific group, would likely be considered illegal since the 2023 Harvard case.

The OFCCP has a new Director, Catherine Eschbach, taking over for Acting Director Michael Schloss.  Director Eschbach comes from private practice as an appellate attorney at Morgan Lewis, representing clients in complex matters.  Prior to private practice, Director Eschbach clerked for Judge Jennifer Walker Elrod of the U.S. Court of Appeals for the Fifth Circuit and Judge David Hittner of the U.S. District Court for the Southern District of Texas.  She worked on the SpaceX case as well as the ABM case. Director Eschbach is highly regarded, extremely intelligent, and quite capable.  No one should underestimate her.

Per an email sent out March 24, 2025, by Director Eschbach, the agency will review DEI programs per Executive Order 14173 of publicly traded companies, large nonprofits and universities, and medical and bar associations.  Three issues will arise.  First, it is unclear whether OFCCP will have jurisdiction to conduct these reviews, especially if the organization under review is not a federal contractor.  Second, it is unclear what form these reviews will take or which contractors may be under review. Third, it is still questionable what is illegal DEI.  The EEOC and DOJ technical assistance offers little guidance other than that illegal DEI violates Title VII of the 1964 Civil Rights Act. 

This is a time for federal contractors to conduct DEI reviews under legal counsel authority for confidentiality purposes.  ASE can assist with these reviews.  Contact Anthony Kaylin for more information.

Source: Wall Street Journal 3/24/24, Jackson Lewis 3/24/25, DCI 2/25/25