Trump Targets DEI Hiring, Promoting: How It Can Affect Private Employers

In one of President Donald Trump’s first-day executive orders, his administration moved to end diversity, equity and inclusion (DEI) practices when it comes to hiring and promoting within the federal government and its contractors.

But this order has legs that will likely affect private employers. Trump’s administration wants “all agencies to enforce our longstanding civil-rights laws and to combat illegal private-sector DEI preferences, mandates, policies, programs, and activities.”

Directive to Change the Focus

What’s more, the order, Ending Illegal Discrimination and Restoring Merit-Based Opportunity, encourages private employers to implement the Trump administration’s policy of “individual initiative, excellence, and hard work.”

Simply put, Trump and his policymakers want to rescind DEI practices over hiring, promoting and/or making workplace policy and people decisions within the government and government-associated agencies or institutions.

Reaching Private Employers Like You

This is where it gets tricky for HR professionals in the private sector: The Trump administration wants federal oversight agencies to take steps to stop private-sector DEI initiatives. The administration directs companies to focus on factors such as merit, excellence and intelligence — commonly known as MEI where it has been adopted.

The order asked for agency leads to compile lists of “egregious and discriminatory DEI practitioners” by sector. It specifically targets “potential civil compliance investigations of publicly traded corporations, large non-profit corporations or associations, foundations with assets of 500 million dollars or more, state and local bar and medical associations, and institutions of higher education with endowments over 1 billion dollars.”

Most recently (2/14/25), Trump’s administration gave schools and universities two weeks to eliminate diversity initiatives or they’d risk losing federal funds that normally pour into the institutions. In a memo from the Department of Education, the Acting Assistant Secretary for Civil Rights, gave an ultimatum to stop using “racial preferences” as a factor in admissions, financial aid, hiring, promoting and more.

While your organization might not fall into any of these categories — larger corporations or education institutions — there will likely be a trickle-down effect on DEI-related practices and principles.

Potential Implications for Private Employers

Nothing is set in stone yet. Partly because — and not surprisingly — lawsuits against the recommended policy changes have already piled up from a combination of government and private sectors.

It’s also not clear how agencies will carry out the directives. There’s limited guidance, yet broad authority, for the agency leads.

Still, our friends at Fisher Phillips offer timely, practical insight on how the executive order might impact you and what you want to consider doing now.

‘Illegal DEI’ Still in Question

There are still some questions around what constitutes “illegal DEI” – an undefined phrase used throughout the executive order. But it defines prohibited conduct as:

• illegal discrimination and preferences, and
• workforce balancing based on race, color, sex, sexual preference, religion, or national origin.

“This would be no different from existing federal law because quotas have always been unlawful under Title VII,” the Fisher Phillips attorneys said.

But the Trump administration indicated it wants to go beyond reinforcing Title VII. Proof: The order broadly paints all DEI policies as part of “unlawful, corrosive, and pernicious identity-based spoils system.”

While it is generally lawful for employers to address biases and barriers to provide a level playing field for employees and job candidates, the Fisher Phillips authors expect the Trump administration will challenge DEI efforts in the workplace. 

Crack Down on ‘Illegal DEI’ Practices

The order also required federal officials (including the attorney general and all agency heads) to submit a report to help the Trump administration establish new civil rights policies against corporate DEI programs. As stated above, it’ll target mostly institutions, associations and large corporations.

Some of the intelligence it calls for:

• The “most egregious and discriminatory DEI practitioners” in each of those sectors
• A plan to deter DEI programs or principles, regardless of whether they are actually given a “DEI” label
• Other strategies to encourage the private sector to end illegal DEI discrimination and preferences and comply with all federal civil rights laws, and
• Potential regulatory action and sub-regulatory guidance.

While there isn’t much guidance on how the crackdown will happen and it’s full impact, it can trickle down to smaller organizations.

Veteran and Disability Preferences Not Impacted

The order doesn’t apply to any employment preferences for military veterans and individuals with disabilities. So if you have initiatives to recruit these populations, you can move forward as planned.

Review Your DEI Initiatives

“Well-designed DEI programs are not illegal,” the Fisher Phillips attorneys said.

Still, you want to review your hiring, training and promotion practices in light of the executive order. It might be a warning to private businesses whose policies don’t align with the anti-DEI initiatives. But the bottom line is, the order “encourages” the private sector to end DEI efforts.

Now might be the best time to check that your DEI program is effective and enhances your organization’s goals and strategies

Work with Legal Counsel

If you have DEI policies and initiatives, you might want to contact your employment attorney to develop a game plan to comply with evolving requirements.

The lawsuits that have been and will be filed could take considerable time to resolve. So staying ahead of compliance is key.

Additional Resources

To note: This order mainly focuses more on hiring, promoting and contracting practices. We cover in-depth Trump’s order that addresses DEI initiatives, Ending Radical and Wasteful Government DEI Programs and Preferencing. Check out this story: Trump Dismantles DEI Programs: What It Means for HR Pros.

For the latest updates on executive orders affecting HR, take a look at New Executive Orders: What HR Should Know for Trump 2.0.