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Spring 2025

President Trump’s Second Term: A New Era of Executive Orders and Compliance Challenges for Employers

Zachary Zagger and Keith D Frazier

Summary

  • President Trump’s second term commenced with several executive orders aimed at reshaping federal policy.
  • The administration has moved to eliminate previous diversity, equity, and inclusion programs, revoking prior policies that mandated affirmative action programs for federal contractors.
  • Another executive order aims to redefine gender in binary terms, prompting changes in workplace policies, leading to legal challenges regarding existing discrimination protections.
  • The administration’s new focus on artificial intelligence prioritizes economic competitiveness and innovation while raising concerns about the lack of federal oversight, which may lead to state-level regulations to protect workers and consumers.
President Trump’s Second Term: A New Era of Executive Orders and Compliance Challenges for Employers
Trudie Davidson/Moment via Getty Images

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In the first weeks of President Donald Trump’s second term, the president issued a flurry of executive orders (EO) to reshape federal policies and shift priorities from the prior administration. These actions impact federal contractors and other employers, raising new compliance concerns in some cases while removing certain obligations in others. Some key changes in the orders include seeking to eliminate “illegal” diversity, equity, and inclusion programs, claiming that there are only two sexes, rescinding Biden-era policies, and removing restrictions on artificial intelligence (AI).

Diversity, Equity, and Inclusion (DEI)

The Trump administration has taken a strong stance against DEI, with President Trump signing two EOs in his first days in office seeking to eliminate “illegal” DEI programs and initiatives. EO 14151, “Ending Radical and Wasteful Government DEI Programs and Preferencing,” signed on January 20, 2025, revokes a Biden-era order that had sought to advance DEI and directed federal agencies to eliminate all DEI and DEIA mandates, policies, programs, and performance requirements, including ending “equity action plans,” “equity-related” grants or contracts, and “environmental justice” initiatives.

EO 14173, “Ending Illegal Discrimination and Restoring Merit-Based Opportunity,” signed on January 21, 2025, revoked the EO 11246, a 1964 order signed by President Lyndon Johnson that had required affirmative action in federal contracting and prohibited discrimination based on race, color, religion, sex, sexual orientation, gender identity, or national origin.

Rethinking Gender Identity

Also, on his first day in office, President Trump signed EO 14168, “Defending Women From Gender Ideology Extremism and Restoring Biological Truth to the Federal Government,” which outlined the federal government’s new policy to recognize gender as binary and immutable. The order directed various agencies to implement policies reflecting this understanding, including calling for new guidance on protecting single-sex spaces in workplaces and federally funded entities.

The order also prioritized investigations and litigation to enforce these rights, potentially leading to significant changes in how sex-based distinctions are handled in employment and other areas. The order could lead to legal challenges, particularly regarding the interpretation of the Supreme Court’s 2020 decision in Bostock v. Clayton County, which held that discharging an employee based on the employee’s sexual orientation or transgender status constitutes unlawful sex discrimination under Title VII of the Civil Rights Act of 1964.

Opening Artificial Intelligence

Finally, in a shift from the Biden administration’s focus on mitigating AI’s potential negative impacts on employees and consumers, President Trump signed the EO 14179, “Removing Barriers to American Leadership in Artificial Intelligence.” The order emphasized that the administration will focus on sustaining and enhancing America’s global leadership in the development of AI to promote economic competitiveness and national security.

This policy shift could lead to increased investment and innovation in AI technologies, but it also raises concerns about the potential for unchecked AI development. Concerns have been raised that using AI or automated decision-making tools without human intervention may negatively affect workers and consumers and embed underlying discriminatory biases or discrimination. In the absence of federal oversight, states are expected to continue to step in with their laws and regulations to institute safeguards over developing and implementing this emerging technology.

Moving Forward

These executive orders create some uncertainty for employers. Still, some, particularly the executive order on gender identity, are facing legal challenges and questions about the lawfulness. The president’s authority to issue such orders will likely continue to be litigated in the federal courts. For now, employers should stay tuned to this rapidly changing legal landscape.

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