President Donald Trump has repealed a nearly 60-year-old executive order originally signed by Lyndon Johnson, which prohibited discrimination in hiring, firing, promotions, and wages among government contractors. Known as EO 11246, this order had been upheld by both Democratic and Republican administrations and required companies to submit annual reports on their employment practices.

In its place, Trump introduced a new rule requiring contractors to certify that they do not maintain “illegal” diversity, equity, and inclusion (DEI) programs. However, the order does not clearly define what constitutes an “illegal” program, creating uncertainty among businesses.

Concerns in the Business Sector

The repeal has raised concerns in the business community, as many companies fear their efforts to promote diversity could be misinterpreted under the new rules. David Fortney, a former Department of Labor official, noted that this lack of clarity could prompt employers to abandon DEI initiatives to avoid potential legal penalties.

Additionally, EO 11246 allowed the Department of Labor to investigate employment practices and uncover disparities, even those unknown to affected individuals. Without this mechanism, businesses are no longer obligated to provide data on their employment processes, making it more challenging to detect possible instances of unequal treatment.

Rationale Behind the Measure

Trump justified this action as a way to ensure that hiring and promotions are based solely on merit, skills, and productivity. According to him, the new policy eliminates external influences tied to diversity programs, guaranteeing fairness in workplace decisions.

However, Craig Leen, who oversaw the enforcement of EO 11246 during Trump’s first administration, clarified that the original decree did not promote quotas or preferences. Instead, it encouraged oversight to ensure equal opportunities for all individuals in hiring and advancement.

Impact on Workplace Inclusion

The elimination of EO 11246 could represent a setback in efforts to advance workplace diversity. Without the requirement to report employment data, many internal processes will lack oversight, making it harder to identify areas that need improvement in terms of inclusion and equity.

Even companies that recognize the value of a diverse workforce may reconsider their inclusion programs to avoid potential conflicts under the new rules. This could reduce opportunities for historically underrepresented groups in the workplace.

Experts warn that this measure will not only impact businesses working with the government but could also have broader economic consequences. “Overlooking underrepresented groups is not only detrimental to equity but also to business competitiveness,” Leen noted, emphasizing the importance of ensuring fair hiring and promotion processes