NEWS: The day after taking office, President Trump issued an Executive Order (E.O.) that revoked a previous 60-year-old E.O. which had required federal contractors (including credit unions) to affirmatively ensure that their employment practices did not discriminate against people based on race, ethnicity, sex, national origin, or religion.
Regardless of that new E.O., federal contractors still have ongoing statutory affirmative action compliance requirements under federal laws that prohibit discrimination against protected veterans and against people with disabilities.
Background
In May 2024, The League published a Compliance Courier titled, “Your credit union needs to comply with affirmative action regulations.” It dealt with a 1965 E.O. issued by President Lyndon Johnson, as well as other laws related to non-discrimination in the workplace.
Our Courier explained that the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) is responsible for ensuring that “government contractors” comply with three sets of laws related to affirmative action and equal employment opportunity:
- Executive Order 11246, which originally was written to protect women and minorities. President Lyndon Johnson issued that order back in 1965, and it has been amended several times over the years.
- The Rehabilitation Act of 1973, which governs individuals with disabilities.
- The Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (VEVRAA), which governs protected veterans.
These laws have long prohibited federal contractors from discriminating in employment because of race, color, religion, sex, sexual orientation, gender identity, national origin, disability status, and protected veteran status.
The Courier also concluded:
The U.S. Department of Labor considers all federally insured credit unions (and banks) to be “government contractors” under certain federal laws, requiring them to comply with federal affirmative action regulations.
Credit unions with fewer than 50 employees must meet certain basic affirmative action standards.
Credit unions with 50 or more employees must develop and maintain comprehensive, written Affirmative Action Programs (AAPs). Also, those credit unions must certify that they are complying with their AAP requirements every year …
New Executive Order
In January, the Trump administration’s new E.O. explicitly revokes the 1965 E.O.
The president’s new E.O. goes on to prohibit the OFCCP from (i) promoting diversity; (ii) holding federal contractors and subcontractors responsible for taking affirmative action; and (iii) allowing or encouraging federal contractors and subcontractors from workforce balancing based on race, color, sex, sexual preference, religion, or national origin.
This recent Husch Blackwell article explains the new E.O., saying: “In short, the executive order completely removes affirmative action requirements derived from E.O. 11246 concerning race, color, sex, sexual preference, religion, or national origin and prevents the OFCCP – the agency that has historically enforced E.O. 11246 – from taking any action to enforce such requirements in the future.”
The Husch Blackwell article includes this material, describing the new E.O.’s impact:
After 60 years of E.O. 11246, what now? The new executive order permits federal contractors to continue to comply with E.O. 11246 for 90 days, most likely until April 21, 2025. It is unclear when and how E.O. 11246 requirements will be phased out or removed from existing federal contracts. It is expected that FAR 52.222-26 and other FAR clauses implementing E.O. 11246 will be rescinded in the near future, preventing their insertion in new contracts. At this time, however, it is unclear as to how the new administration plans to handle the requirements for E.O. 11246 compliance written into existing federal contracts after the 90 day period expires.
Regardless of the revocation of E.O. 11246, federal contractors still have ongoing statutory affirmative action compliance requirements under the Vietnam Era Veterans’ Readjustment Assistance Act (FAR 52.222-35; 41 C.F.R. Part 60-300) prohibiting discrimination against protected veterans and under Section 503 of the Rehabilitation Act (FAR 52.222-36; 41 C.F.R. Part 60-741) prohibiting discrimination against individuals with disabilities. Both of these statutory affirmative action requirements, and associated reporting requirements, currently remain unchanged and – for now – are enforced by OFCCP. Similarly, federal contractors have continuing obligations to comply with federal anti-discrimination laws currently enforced by the Equal Employment Opportunity Commission (EEOC), such as Title VII of the Civil Rights Act of 1964 and others.
Contractors with pending or scheduled OFCCP audits should consult with legal counsel to develop a strategy for responding to OFCCP in light of the recent executive order.
Credit unions should review the Husch Blackwell article for more details.