Just days after taking office, President Donald Trump sent a clear message to corporate America: Follow the federal government’s lead and “end illegal DEI discrimination” or face civil rights investigations.
Trump’s executive order bars the federal government from pushing contractors to diversify their workforce and taps federal agencies to use Civil Rights-era laws “to combat illegal private-sector DEI preferences, mandates, policies, programs and activities.”
DEI policies “undermine our national unity, as they deny, discredit and undermine the traditional American values of hard work, excellence and individual achievement in favor of an unlawful, corrosive and pernicious identity-based spoils system,” the order said.
The widely anticipated action to overturn decades of affirmative action and diversity precedent is expected to have an immediate chilling effect on corporate DEI efforts.
While the federal government does not have a direct say over the private sector’s diversity practices, it has wide purview over companies that depend on federal funding or hold government contracts.
Trump action expected to have immediate chilling effect
Trump’s executive order fulfills his campaign pledge to “terminate” DEI and reverse Joe Biden’s “woke takeover” of America – goals championed by his close allies and cheered by crowds at his rallies.
Trump has cast DEI as illegal discrimination against white Americans. Trump adviser and Tesla billionaire Elon Musk has called DEI “just another word for racism.” DEI spending is also a priority of Trump’s “Department of Government Efficiency,” the effort Musk leads to cut the federal budget.
“This is going to start a tidal wave of companies self-censoring and cutting back on those types of DEI efforts for fear of litigation with the federal government on the other end of that,” said Joseph Seiner, a law professor at the University of South Carolina. “Even if they’re doing everything that complies with federal law, they could still find themselves subject to an investigation, which can be expensive and timely to defend against.”
DEI rollback threatens workplace progress, civil rights leaders warn
Coming less than five years after George Floyd’s murder led corporations to embrace greater equality in their workforce and leadership ranks, civil rights leaders warned the rollback – telegraphed in the conservative think tank Heritage Foundation’s Project 2025 – threatens to reverse the progress women and people of color have made in the workplace over the past six decades.
Diversity and civil rights advocates say affirmative action policies are still needed to fight discrimination in cubicles and executive suites and on factory floors.
Each year, thousands of companies land federal contracts, serving hot meals or manufacturing missile defense systems. For decades, taking a slice of the hundreds of billions the U.S. government spends each year on goods and services came with anti-discrimination strings.
In 1965, President Lyndon Johnson signed an executive order holding federal contractors to a higher standard than other employers in ensuring that women and people of color have equal opportunities in hiring, training and promotions.
DEI case 50 years later:Why affirmative action still divides the nation.
Nearly six decades later, an analysis by USA TODAY of federal contractors data obtained by Reveal from The Center for Investigative Reporting showed those firms were not living up to that commitment.
Deep racial divides cut through the workforces of federal contractors, which employ 1 in 5 American workers. Though the employee ranks in these companies have diversified, the top jobs that command the best pay and benefits have not, mirroring the private sector at large, the analysis found.
“In less than 48 hours in office, President Donald Trump has eviscerated his promise to be a champion of workers, gutting basic workplace equal opportunity protections that have been in place for 60 years,” Fatima Goss Graves, CEO and president of the National Women’s Law Center, said in a statement. “These protections were enforced by the Department of Labor, and by removing this important watchdog, Trump has opened up workers to workplace discrimination.”
Employers pledged to stand by their DEI policies.
Tim Bartl, CEO of the HR Policy Association, which represents hundreds of senior human resource executives across the country, said his organization would work with the Trump administration to ensure America’s largest employers can seek “the best talent regardless of race, sex, religious beliefs in order to win in the marketplace.”
“This EO hasn’t changed the law nor has it altered the commitment employers have to inclusive workplaces designed to attract and retain the best qualified talent,” Bartl said.
Trump executive power to slash DEI part of broader backlash
Trump’s executive order wiping out Johnson’s is the latest in a series of moves to unwind affirmative action and diversity policies in America.
Within hours of his swearing in, Trump revoked Biden executive orders to weave DEI into the fabric of the federal government. An incoming White House official told reporters Monday that more DEI actions were coming for the private sector.
Even before Trump took office, companies scaled back their corporate diversity efforts to align themselves with his administration. Last week, Amazon and Meta became the latest to make substantial changes.
The push to end diversity initiatives began during Trump’s first term and has grown since he’s been out of office.
Over the last few years, the private sector under fire from conservative foundations, think tanks and political operatives has dialed back diversity efforts. Those changes accelerated shortly after the Supreme Court in 2023 struck down affirmative action in higher education and as attitudes among U.S. workers on DEI began to shift.
Anti-DEI activist Robby Starbuck’s pressure campaigns on social media have forced more than a dozen companies to make DEI concessions, from Tractor Supply to Walmart.
“I see a lot of people saying DEI is dead. It’s not,” Starbuck said on X. “It’s cornered and in a position to die but we must be punishing and relentless in finishing this ideology off. No mercy.”
To that end, Trump has stocked his administration with anti-DEI allies − from Vice President JD Vance who, as an Ohio senator, introduced legislation that would prohibit government contractors from using federal funds for DEI initiatives to Trump’s deputy chief of staff for policy, Stephen Miller, who filed dozens of legal actions against “woke” corporations.
Trump tapped Andrea Lucas, a vocal DEI critic, to lead the Equal Employment Opportunity Commission, which has vast influence over U.S. employers. Lucas said she would root out “unlawful DEI-motivated race and sex discrimination.”
In December, Trump asked Harmeet Dhillon to lead the Justice Department’s civil rights division, touting her record of “suing corporations who use woke policies to discriminate against their workers.” The Civil Rights Division was formed in 1957 to enforce laws to stop discrimination against Black people and other historically marginalized communities.
Contributing: Davis Winkie
