What Do Trump’s Executive Orders Mean For California Employers?

President Trump issued twenty-seven Executive Orders (“EO”s) in the first two days of his administration. Three of them in particular have left employers concerned and confused about the potential impact on their Diversity Equity and Inclusion (DEI) and Equal Employment Opportunity policies. Employers in California, where state anti-discrimination laws provide protections broader than existing federal laws, face particular challenges piecing it all together.

This is an evolving area, with multiple lawsuits pending. A federal district court in Maryland issued a nationwide preliminary injunction (“PI”) on February 21 barring the President’s Administration from taking a number of actions mandated by two of the EOs because the Court found them to be overly vague and/or potentially in violation of free speech rights. The PI has brought a welcome pause to some of the EOs’ directives, but the Administration has already appealed the ruling.

Below we outline what California employers should know now:

“Ending Radical and Wasteful Government DEI Programs and Preferencing” (EO 14151)

EO 14151 directs federal government agencies to eliminate their own DEI programs. It does not address private employers. However, the EO requires federal agencies to terminate all “equity-related” grants or contracts and all DEI or DEIA performance requirements for contractors or grantees to the extent allowed by law, which would affect federal contractors and grantees.

• The PI prohibits termination, cancelation, blocking or freezing of contracts or grants on the basis of the EO’s directive.

 “Ending Illegal Discrimination and Restoring Merit-Based Opportunity” (EO 14173)

EO 14173, takes the position that many DEI programs, including private employer programs, create discriminatory “preferences” that violate federal civil rights laws such as Title VII, which applies to employers of 15 or more employees and prohibits discrimination in employment because of sex, race, color, religion, and national origin. The stated purpose of the EO is to ensure that the federal government is enforcing civil rights laws “by ending illegal preferences and discrimination.”

EO 14173 and the PI

As discussed here, EO 14173 directs a number of actions in furtherance of its purpose, including:

• Revokes federal contractor and subcontractor affirmative action requirements (other than for veterans and individuals with disabilities) which have been in place since the 1960s.
  • The PI does not change this.
• Directs federal agencies to require contractors and grant recipients to certify that they do not operate any DEI programs that violate federal anti-discrimination law.
  • The PI prohibits requiring this certification or enforcement actions based on the certification.
• Requires the Attorney General to provide recommendations for combatting illegal DEI through enforcement of federal civil-rights laws and identifying potential high profile civil compliance investigations.
  • The PI prohibits enforcement actions by the Administration based on this directive but does not prohibit the Attorney General from preparing the report or engaging in the investigation.

Does EO 14173 Make DEI Illegal?

No. EO 14173 does not change the law on employment discrimination or make DEI illegal. However, DEI programs can violate civil rights laws. Employment decisions based on a protected characteristic, whether part of a DEI effort or otherwise, have always been illegal.

Does the PI Mean We Can Forget About the Anti-DEI EOs?

Also a No. The federal government and private lawsuits can still enforce Title VII violations. Also, the PI is immediately appealable, and a higher Court could disagree with the District Court’s decision. We could also see the Administration issue amended EOs.

What Should Employers Do About DEI Now?

Some employers may choose to adjust their DEI programs in light of EOs 14151 and/or 14173.

All employers should review their DEI and other programs to ensure:

• Employment decisions, such as hiring and promotions, are objective, job-related and merit-based; and
• Compensation meets California’s strict pay equity laws requiring equal pay for substantially similar work regardless of race, gender or ethnicity.

“Defending Women From Gender Ideology Extremism and Restoring Biological Truth to the Federal Government” (EO 14168)

EO 14168’s, stated purpose is to “defend women's rights and protect freedom of conscience by … recogniz[ing] women are biologically female, and men are biologically male.” To this end, the EO:

• States the federal government will recognize only two sexes—male and female.
• Defines “sex” as an immutable biological classification and rejects the concept of gender identity within this definition.
• Rejects the interpretation of existing U.S. Supreme Court Title VII caselaw as requiring gender identity-based access to single-sex spaces.

The PI does not address EO 14168, but other lawsuits have been filed.

Does EO 14168 Change The Law?

EO 14168 does not change the law on employment discrimination, but there could be implications for private employers on the horizon. EO 14168 calls for:

• Guidance from the Attorney General “to ensure the freedom to express the binary nature of sex and the right to single-sex spaces in workplaces and federally funded entities covered by the Civil Rights Act of 1964.”
• Agency (including EEOC) enforcement of those rights.
• Agency-imposed requirements on federally funded entities, including contractors, to achieve the policy of the EO.
• Rescinding agency guidance that is “inconsistent with” the EO.
• A proposed bill to codify the EO’s definitions relating to sex.

EEOC’s Response To EO 14168:

Acting EEOC Chair Andrea Lucas has already taken some steps to implement EO 14168, such as:

• Ending the use of the “X” gender marker in the charge intake process, and
• Announcing the agency’s priority “to defend the biological and binary reality of sex and related rights, including women’s rights to single-sex spaces at work.”

However, EEOC Chair Andrea Lucas has stopped short of rescinding recently issued EEOC guidance protecting gender identity, including affirming the right under Title VII to access bathrooms consistent with gender identity and to be free of intentional and repeated misgendering. She has acknowledged that she cannot remove or modify the Guidance without a majority vote of the full Commission. A voting quorum is currently lacking, following President Trump’s termination of two members in late January.

California’s Protections Remain

While EO 14168 could signal a rollback of federal protections, California’s protections are clear:

• FEHA expressly includes gender identity and gender expression as protected classes.
• FEHA regulations require that employees have a right to:
  • Use a restroom or locker room that corresponds to their gender identity, regardless of their sex assigned at birth, and
  • Use and be addressed by the name and pronouns that correspond with their gender identity or gender expression.
• Employers are required to include gender identity and gender expression in mandatory harassment prevention training.

What Should Employers Do About EO 14168 Now?

Continue to follow applicable law, monitor federal developments, and consult counsel if you have concerns relating to your federal grants or contracts. EO 14168 does set the stage for federal legislative developments and court decisions. Employers may need to consult counsel in the event a conflict emerges between their obligations under California and federal laws putting them between a rock and a hard place.

To Sum It Up:

President Trump’s Anti-DEI and Gender Ideology Executive Orders do not change employment laws applicable to private employers, or the protections California law provides employees. However, we can expect a continued rollercoaster ride, including further litigation, EOs, agency actions, and proposed legislation which employers should continue to monitor.