Does President Trump’s Emergency Declarations Trigger California Price Controls?
As discussed in yesterday’s post, California’s anti-price gouging statute, Penal Code Section 396, is triggered upon the proclamation of a state of emergency by either the President of the United States or the Governor. Immediately following his second inauguration, President Donald Trump proclaimed a national emergency at the southern border and a national energy emergency.
Do either of these proclamations trigger the application of Section 396? Neither proclamation refers specifically to California. However, Section 396 is also not limited to emergencies located in California. Thus, it is seemingly possible for California’s price control statute to be triggered by a presidential declaration that is not specifically related to California.
California DOC Alumnus Is New Acting Chairman!
Over the years, several alumni of the California Department of Financial Protection & Innovation (nka the Department of Corporations) have moved on to work at the U.S. Securities & Exchange Commission. As a DOC alumnus, I was pleased to see that President Donald Trump has designated Mark T. Uyeda as acting Chairman of the SEC. Below is an excerpt from the SEC’s press release announcing the appointment:
Acting Chairman Uyeda was first sworn into office as a Commissioner on June 30, 2022, after being confirmed by the U.S. Senate. He was subsequently re-nominated and confirmed for a five-year term expiring in 2028. During President Trump’s first term, he served on detail to senior leadership at the U.S. Department of the Treasury and to Secretary Eugene Scalia at the U.S. Department of Labor. He has also served on detail to the U.S. Senate Committee on Banking, Housing, and Urban Affairs. At the SEC, he has served as Senior Advisor to Chairman Jay Clayton, Counsel to Commissioners Michael S. Piwowar and Paul S. Atkins, and Assistant Director and Senior Special Counsel in the Division of Investment Management.
Before joining the SEC, Acting Chairman Uyeda was appointed by Governor Arnold Schwarzenegger to serve as the Chief Advisor to the California Corporations Commissioner, the state’s securities regulator. Earlier in his career, he worked as a corporate and securities attorney at Kirkpatrick & Lockhart in Washington, D.C., and O’Melveny & Myers in Los Angeles.
Originally from Orange County, California, Acting Chairman Uyeda earned his bachelor’s degree in business administration from Georgetown University in 1992 and his law degree with honors from Duke University in 1995, where he was a member of the Duke Law Journal. He is a past president of the Asian Pacific Bar Association of the Greater Washington, D.C. Area and a 2023 recipient of the Daniel K. Inouye Trailblazer Award from the National Asian Pacific American Bar Association.
Chairman Uyeda has already announced formation of a new Crypto task force.
President Trump Issues Sweeping Executive Orders Aimed at DEI
In his inaugural address on Monday, January 20, 2025, President Trump declared, “We will forge a society that is colorblind and merit-based.” In the days that followed, President Trump has proceeded to issue a series of executive orders in quick succession, many of which specifically seek to eliminate diversity, equity, and inclusion (“DEI”) initiatives in both the private sector and the federal government. In addition, President Trump rescinded nearly 80 executive orders issued by President Biden, many of which relate to DEI.
Below is an overview of some of President Trump’s and his appointees’ recent actions that employers should be aware of when reviewing and evaluating their own policies and practices pertaining to DEI:
Ending Radical and Wasteful Government DEI Programs And Preferencing
Within hours of his taking office, President Trump issued an Executive Order entitled “Ending Radical and Wasteful Government DEI Programs and Preferencing.” The Order specifically takes aim at Executive Order 13985 (Advancing Racial Equity and Support for Underserved Communities Through the Federal Government), issued by President Biden, which in turn repealed Trump’s 2020 ban on racial bias trainings for federal agencies and contractors.
The new Executive Order mandates the Director of the Office of Management and Budget (“OMB”), in conjunction with the Attorney General and the Director of the Office of Personnel Management (“OPM”), to terminate all “illegal DEI and ‘diversity, equity, inclusion, and accessibility’ (DEIA) mandates, policies, programs, preferences, and activities” within the federal government. The Order also directs each federal agency to terminate all DEI, DEIA, and environmental justice offices and positions, and all “equity-related” grants or contracts. As a result, federal contractors and/or grantees engaged in such “equity-related” work should expect such contracts or grants to be terminated in short order. In addition, the Order calls for the termination of “all DEI or DEIA performance requirements for employees, contractors, or grantees.”
The Acting Director of the OPM wasted no time issuing initial guidance pursuant to the Executive Order in a memorandum published late on Tuesday, January 21, 2025. According to the memorandum, by 5 p.m. EST on Wednesday, January 22, 2025, all agency heads must: (i) issue an agency-wide notice to employees informing them that all DEIA offices are closing and asking them “if they know of any efforts to disguise these programs by using coded or imprecise language,” (ii) notify all employees of such DEIA offices that they are being placed on paid administrative leave effective immediately, and (iii) take down all outward facing media (i.e., websites, social media accounts) of DEIA offices. Additional action and guidance pursuant to this Executive Order is anticipated.
Ending Illegal Discrimination And Restoring Merit-Based Opportunity
On Tuesday, January 21, 2025, President Trump issued another Executive Order pertaining to DEI, entitled “Ending Illegal Discrimination And Restoring Merit-Based Opportunity.” This Order instructed all executive departments and federal agencies to “terminate all discriminatory and illegal preferences, mandates, policies, programs, activities, guidance, regulations, enforcement actions, consent orders, and requirements” and further ordered all federal agencies “to enforce our longstanding civil-rights laws and to combat illegal private-sector DEI preferences, mandates, policies, programs, and activities.” Notably, the Order provides that federal and private-sector employment and contracting preferences for U.S. military veterans can continue.
Section 4 of the Executive Order, titled “Encouraging the Private Sector to End Illegal DEI Discrimination and Preferences,” calls on the Attorney General, in consultation with relevant agency heads and the Director of OMB, to submit a report to the Assistant to the President for Domestic Policy with recommendations for “appropriate measures to encourage the private sector to end illegal discrimination and preferences, including DEI.” According to the Order, the report must contain the following:
Key sectors of concern within the agency’s jurisdiction;
The most egregious and discriminatory DEI practitioners in each sector of concern;
A plan of specific steps or measures to deter DEI programs or principles that constitute illegal discrimination or preferences;
Other strategies to encourage the private sector to end illegal DEI discrimination and preferences and comply with all federal civil-rights laws;
Litigation that would be potentially appropriate for federal lawsuits, intervention, or statements of interest; and
Potential regulatory action and sub-regulatory guidance.
As part of this report, each agency must “identify up to nine 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.” Moreover, the Executive Order also requires the Attorney General and the Secretary of Education to issue guidance to “all institutions of higher education that receive Federal grants or participate in the Federal student loan assistance program” regarding the practices that are required to comply with the Supreme Court’s 2023 decision in Students for Fair Admissions, Inc. v. President and Fellows of Harvard College.
Lastly, the Executive Order also revoked several prior executive orders, including Executive Order 11246 signed by Lyndon B. Johnson in 1965, which established non-discriminatory hiring practices for federal contractors. More on this revocation on our Government Contractor Compliance & Regulatory Update blog here.
Statement by Newly Appointed EEOC Acting Chair Andrea R. Lucas
In addition to the executive orders issued by President Trump, on Tuesday, January 21, 2025, newly appointed EEOC Acting Chair Andrea R. Lucas issued a statement setting forth her enforcement priorities. In the statement, Lucas said that her enforcement priorities will include:
Rooting out unlawful DEI-motivated race and sex discrimination;
Protecting American workers from anti-American national origin discrimination;
Defending the biological and binary reality of sex and related rights, including women’s rights to single‑sex spaces at work;
Protecting workers from religious bias and harassment, including antisemitism; and
Remedying other areas of recent under-enforcement.
Other Notable Executive Actions
On Monday, January 20, 2025, President Trump issued an Executive Order entitled, “Reforming the Federal Hiring Process And Restoring Merit to Government Service.” The Executive Order calls for the prioritization of “merit” and “skill” in federal hiring. The Order states:“Federal hiring should not be based on impermissible factors, such as one’s commitment to illegal racial discrimination under the guise of ‘equity,’ or one’s commitment to the invented concept of ‘gender identity’ over sex.” The Order instructs the Assistant to the President for Domestic Policy to send to all agency heads a federal hiring plan, which, among other things, “prevent[s] the hiring of individuals based on their race, sex, or religion.”
On Wednesday, January 22, 2025, Presidential Trump signed a Presidential Memorandum entitled “President Donald J. Trump Ends DEI Madness and Restores Excellence and Safety Within The Federal Aviation.” The memorandum orders the Secretary of Transportationand the Federal Aviation Administration (FAA) Administrator to “immediately stop Biden DEI hiring programs and return to non-discriminatory, merit-based hiring” for FAA employees.
Takeaways
President Trump’s series of executive orders and actions, as well as Acting Chair Lucas’ statement of enforcement priorities, make clear that the Trump Administration and federal agencies tasked with enforcing civil rights laws plan to focus their enforcement efforts on corporate DEI programs. Employers should carefully evaluate their current DEI-related and recruiting/hiring policies and practices in light of these developments. We anticipate further updates in this area and will continue to monitor and report on these updates.
What to Expect from The 119th Congress — A Conversation with Mark Washko
This week I discuss with my colleague, Mark Washko, Senior Government Affairs Advisor for B&C and The Acta Group, our consulting affiliate, the new 119th Congress and what might be key legislative actions our listeners should look for. The new Congress reflects many new members, new staffs, and a new Republican majority in both chambers. What can we expect? Will Congressional Review Act measures un-do key Biden initiatives? What might we expect in terms of a budget reconciliation package? These issues and a whole lot more are the subject of my conversation with Mark.
Tracking the New Administration’s Executive Actions Changes
With President Donald Trump commencing his second term, significant changes are anticipated across global industries. His series of sweeping executive actions have already sparked pushback and legal challenges.
To assist companies in navigating these changes, Sheppard Mullin has developed an Executive Actions Tracker. We are continuing to update the tracker as new actions are released and new analysis becomes available. This resource includes:
Links to the full text of each executive action
Summaries of each, organized by subject area
In-depth analysis of the implications
Links to court challenges that have been filed
Links to Sheppard Mullin blogs discussing the actions
Areas Covered by the Tracker
Our comprehensive tracker spans multiple areas and industries, including:
Border/Immigration
National Security
Environment/Energy
Technology
Justice
Federal Employees
DEI/Social Issues
Trade
Economy
Foreign Affairs
Health
Sidney Howe also contributed to this article.
What President Trump’s Energy Plan Means for the State Regulatory Environment, the Generation Mix and Electric Transmission
Signaling the prioritization of energy, President Donald Trump declared a national energy emergency on inauguration day. He issued several Executive Orders (EO) and Presidential Memoranda either unwinding the Biden administration’s energy policies or entering his own Orders to address what he described as inadequate energy supply in the United States and to encourage the expedient development of fossil fuel resources. Here, we will outline the key Orders and what they mean for the state regulatory environment, generation mix and electric transmission construction.
The Rescissions
Let’s start with the rescissions. President Trump revoked most of President Biden’s EOs and Presidential Memoranda on energy matters, some of which were entered in the weeks before he left office. The following is a summary of the key rescissions:
EO 13990 of January 20, 2021 (Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis) entered on President Biden’s first day in office. The Order revoked the permit for the Keystone XL pipeline, established an Interagency Working Group on the Social Cost of Greenhouse Gases and directed federal agencies to support a transition to clean energy.
EO 14008 of January 27, 2021 (Tackling the Climate Crisis at Home and Abroad) that paused “new oil and natural gas leases on public lands or in offshore waters pending completion of a comprehensive review and reconsideration of Federal oil and gas permitting and leasing practices.”
EO 14057 of December 8, 2021 (Catalyzing Clean Energy Industries and Jobs Through Federal Sustainability) setting forth the policy of achieving a carbon pollution-free electricity sector by 2035 and net-zero emissions economy-wide by no later than 2050.
EO 14082 of September 12, 2022 (Implementation of the Energy and Infrastructure Provisions of the Inflation Reduction Act of 2022) establishing funding to implement the IRA in the energy sector and creating the Office on Clean Energy Innovation and Implementation.
Presidential Memorandum of March 13, 2023 (Withdrawal of Certain Areas off the United States Arctic Coast of the Outer Continental Shelf from Oil or Gas Leasing) withdrawing areas in the Beaufort Sea from future oil and gas leasing, which completed protections for the entire U.S. Arctic Ocean.
Presidential Memorandum of January 6, 2025 (Withdrawal of Certain Areas of the United States Outer Continental Shelf from Oil or Natural Gas Leasing) protecting the East Coast, the eastern Gulf of Mexico, the Pacific off the coasts of Washington, Oregon and California and additional portions of the Northern Bering Sea in Alaska from future oil and natural gas leasing.
Energy-Focused Executive Orders
President Trump also issued several EOs and Presidential Memoranda focused on the energy sector following up on the President’s inaugural speech suggesting support for oil, gas and nuclear energy and an end to federal policies favoring clean energy, including wind and solar. Outlined below are the Trump administration’s energy-related EOs.
Unleashing American Energy
The Unleashing American Energy EO intends to encourage energy production and exploration on Federal lands and waters, to increase production of non-fuel minerals and to eliminate the electric vehicle (EV) mandate, among other policies. The order calls for:
federal agencies to review, revise and/or rescind all regulations that impose an undue burden on domestic energy production and use, specifically for “oil, natural gas, coal, hydropower, biofuels, critical mineral, and nuclear energy resources.”
the Council on Environmental Quality to provide guidance on implementing the National Environmental Policy Act (NEPA) with the goal of expediting permitting approvals and rescinding certain NEPA regulations related to the national environmental policy put in place during the Biden administration.
federal agencies to make every effort to expedite the permitting process.
the National Economic Council and the Director of the Office of Legislative Affairs to prepare recommendations to Congress that will expedite the permitting and construction of interstate energy transportation and other critical energy infrastructure projects, such as pipelines, particularly in regions lacking such development in recent years.
the federal permitting process to adhere to only relevant laws for environmental considerations without using arbitrary or ideologically motivated methodologies.
the resumption of the review of applications for liquified natural gas export projects.
National Energy Emergency
To start, President Trump’s National Energy Emergency EO defines energy as “crude oil, natural gas, lease condensates, natural gas liquids, refined petroleum products, uranium, coal, biofuels, geothermal heat, the kinetic movement of flowing water, and critical minerals” with wind and solar energy missing from the list. The Order is designed to expedite the permitting process for energy projects, reduce environmental regulations and promote fossil fuel development, particularly in regions like Alaska. Executive departments and federal agencies are directed to use their emergency authority or any other authority they may possess to facilitate the identification, leasing, siting, production, transportation, refining and generation of domestic energy resources, including resources on Federal lands. The U.S. Environmental Protection Agency (EPA) and the Secretary of Energy are given broad authority to increase oil and gas production.
Unleashing Alaska’s Extraordinary Resource Potential
This EO tracks the inaugural remarks made by President Trump to “drill, baby drill.” The Order directs agencies to expedite the permitting and leasing of energy and natural resource projects in Alaska, including liquefied natural gas projects, and end related environmental restrictions that would derail such efforts.
Temporary Withdrawal of All Areas on the Outer Continental Shelf from Offshore Wind Leasing and Review of the Federal Government’s Leasing and Permitting Practices for Wind Projects
The title of the Memorandum speaks for itself, but it also pauses federal permitting, approvals and loans for all “new” onshore and offshore wind projects. The emphasis on the word “new” suggests that any project that has received a Record of Decision (ROD) from the Bureau of Land Management or the Bureau of Ocean Energy Management (BOEM) should be able to proceed with their project. However, the Memorandum calls out the Lava Ridge Wind Project, which received an ROD, and directed the Department of the Interior to place a temporary moratorium on it and “conduct a new comprehensive analysis of the various interests implicated by the Lava Ridge Wind Project and the potential environmental impacts.” The Memorandum also directs federal agencies to investigate “defunct and idle windmills” and recommend authorities to require their removal.
Anticipated Impacts on the State Regulatory Environment
The Trump administration’s energy policy and declaration of a national energy emergency will have varied impacts on state agencies involved in energy regulation, such as public utility commissions. By prioritizing fossil fuels and curtailing support for renewable energy, these Orders may require adjustments at the state level.
The Orders are anticipated to have a significant impact on states like New Jersey and New York, which have been investing in offshore wind to meet their decarbonization goals. New Jersey’s goal is to generate 11,000 MW of electricity from offshore wind by 2040 and transition to 100% clean energy by 2035. New Jersey has approved solicitations from three offshore wind developers with only one project receiving a ROD from BOEM. The New Jersey Board of Public Utilities issued a fourth solicitation in early 2024 which has not yet been awarded. A fifth solicitation slated for Q2 2025 may be off the table given the Trump administration’s Memorandum on offshore wind. States like New Jersey may need to reassess their energy portfolios and may struggle to get renewable projects that rely on federal approvals off the ground, like offshore wind in federal waters.
The Trump administration’s support for fossil fuels is less impactful on the state regulatory environment due to preexisting market forces. While the Trump administration will want to take credit, the fact is that natural gas plants are already on the rise due to strong demand from data centers. In May 2024 (well before the election), S&P Global Market Intelligence reported that U.S. utilities and investors plan to add 133 new natural gas-fired power plants to the nation’s grid over the next few years. These same market forces are delaying the closure of coal plants. Accordingly, strong demand will bolster gas and coal generation more than the administration’s Orders and Memorandum. State regulatory agencies are already seeing the impact of dramatically increasing demand, as utilities make significant changes to generation resource plans and capital outlays to provide for new gas plants and continued operation of coal plants. Similarly, the U.S. became the world’s largest crude oil producer in 2018 and has maintained that status ever since, breaking records for oil projection in 2024.
Areas to Watch Related to Onshore Wind Projects
While the federal government holds the keys to offshore wind leases, onshore projects do not rely as heavily on approvals, rights of way, permits, leases or loans from the federal government. On the other hand, the Trump administration’s Memorandum could be interpreted to apply to permits such as an endangered species permit from the U.S. Fish and Wildlife Service or a Determination of No Hazard from the Federal Aviation Administration. If so interpreted, it would cause massive disruption to new onshore wind projects. However, the Orders and Memorandum do not impact the Investment or Production Tax Credits, which are determined by Congress.
Potential Impacts on Transmission
Another area of interest for state regulatory commissions is electric transmission. Regional Transmission Organizations have identified hundreds of miles of new transmission projects, and these projects may have additional momentum because of the EO declaring a national energy emergency. That Order calls on federal agencies to identify and exercise all lawful authorities they may possess to “facilitate the identification, leasing, siting, production, transportation, refining, and generation of domestic energy resources.” The term “transportation” means the physical movement of energy, including through, but not limited to, pipelines. This includes electric transmission. Accordingly, state regulatory agencies should expect an uptick in applications for certification and siting of electric transmission lines. Interstate pipelines, on the other hand, are certificated and sited by the federal government.
If Past is Prologue
As we look forward to the current administration, we can look back at President Trump’s previous efforts in the energy sector. In 2018, the EPA under the Trump administration announced the replacement of the Obama administration’s Clean Power Plan with the Affordable Clean Energy Plan (ACE). ACE altered the New Source Review under the Clean Air Act, allowing new investment in older coal plants that would not have passed previously. ACE was disallowed by the D.C. Circuit in 2021, but that D.C. Circuit decision was overturned by the U.S. Supreme Court in June of 2022. With the change in energy demand and slower decommissioning of coal fired generation, it is unclear whether there is a need or desire for something like ACE. However, with the 2022 Supreme Court ruling, it may be available.
The other act that caused significant concern in the energy industry during the previous Trump administration was in 2018 when President Trump ordered Energy Secretary Rick Perry to take steps to keep struggling coal and nuclear plants open. The plan called for the use of the Federal Power Act and Defense Production Act and would have required regional grid operators to buy coal and nuclear generated power and provide guaranteed profit. The cost impact and market disruption would have been immense, and the plan was rejected by the Federal Energy Regulatory Commission.
President Trump Ends Affirmative Action Requirements for Federal Contractors
Amidst a flurry of employment-related executive orders issued during the first few days of the new administration, on January 21, 2025, President Trump signed an executive order titled Ending Illegal Discrimination and Restoring Merit-Based Opportunity (“the Executive Order”).
The Executive Order describes diversity, equity, inclusion, and accessibility as “dangerous, demeaning, and immoral” and in violation of federal civil rights legislation. The Executive Order goes on to undo decades of federal government practice and authority, directing all executive departments and federal agencies to stop enforcing affirmative action program requirements and instead focus upon enforcing existing civil rights law to prevent employers from implementing such programs.
Revocation of Existing Executive Orders
The Executive Order overturned four longstanding executive orders and a presidential memorandum:
Executive Order 11246: Issued September 24, 1965, Executive Order 11246 prohibited federal contractors from discriminating against employees because of race, color, religion, sex, or national origin and required federal contractors to take affirmative action to ensure that applicants and employees are treated without regard to these characteristics. Executive Order 11246 further required federal contractors with at least 50 employees and who met certain contract thresholds to develop and maintain written Affirmative Action Programs and evaluate their compensation practices for pay disparities by gender and race, known as pay equity audits. Employers have 90 days from January 21, 2025, to cease complying with Executive Order 11246.
Executive Order 13672: Issued on July 21, 2014, Executive Order 13672 amended Executive Order 11246 to prohibit discrimination against employees because of their sexual orientation or gender identity.
Executive Order 12898: Issued on February 11, 1994, Executive Order 12898 focused federal attention on the environmental and health impacts of federal actions on minority and low-income populations.
Executive Order 13583: Issued on August 18, 2011, Executive Order 13583 imposed equal opportunity, diversity, and inclusions requirements on the federal government as an employer and required the Director of the Office of Personnel Management (OPM) and Deputy Director for Management of the Office of Management and Budget (OMB) to establish a government-wide initiate to promote diversity and inclusion in the federal workforce by developing a Diversity and Inclusion Strategic Plan to improve federal agency efforts to recruit, hire, promote, retain, develop, and train a diverse and inclusive workforce consistent with merit system principles.
The Presidential Memorandum of October 5, 2016: This memorandum provides guidance to national security personnel to promote talent and diversity, including the collection and dissemination of demographic data of the national security workforce, implementing personnel policies to ensure that all national security employees have access to professional development opportunities and rewarding diversity and inclusion efforts, including through training on unconscious bias for the national security workforce.
Changes to the Office of Federal Contract Compliance Programs
The Office of Federal Contract Compliance Programs (OFCCP) is an agency within the federal Department of Labor that oversees federal contractors and subcontractors and enforces compliance with legal requirements related to affirmative action, anti-discrimination, and retaliation. The Executive Order has reversed the OFCCP’s mission and prohibits it from promoting diversity, enforcing affirmative action requirements, or allowing federal contractors and subcontractors to “engage in workforce balancing” on the basis of an employee’s race, color, sex, sexual orientation,[1] religion, or national origin. In short, the OFCCP is not only prohibited from requiring affirmative action by federal contractors, but it must also actively prevent federal contractors from implementing affirmative action and diversity and equity initiatives as a means to engage in discrimination in violation of the non-discrimination laws.
New Requirements for Federal Contractors
The Executive Order further imposes additional requirements on federal contractors. Federal contractors and subcontractors are prohibited from considering race, color, sex, sexual orientation, religion, or national origin in their employment, procurement, and contracting practices. In entering into federal contracts, every contract or grant must include terms agreeing that compliance with applicable federal anti-discrimination law is material to the government’s decision to pay under the contract and certifying that the federal contractor does not operate any programs promoting diversity, equity, and inclusion that violate applicable federal anti-discrimination laws. The Executive Order directs the Director of the OMB and the Attorney General to revise government processes to comply with these new requirements and excise references to diversity, equity, and inclusion principles from federal grants, contracts, programs, and mandates.
Provisions Applicable to Non-Federal-Contractor Private Employers
The Executive Order does not impose any specific requirements on private employers who are not federal contractors or subcontractors. However, it does contain provisions indicating how the Trump Administration plans to make efforts to prevent private employers from promoting diversity, equity, and inclusion in their workplaces. Specifically, the Executive Order directs the Attorney General to submit a recommendation for measures to encourage private employers to end diversity, equity, and inclusion practices and formulate civil-rights policy to this end within 120 days of the Executive Order. The Executive Order asks the Attorney General to identify large companies and educational institutions to target for civil compliance investigations and federal lawsuits to advance these stated goals.
Exceptions to the Executive Order
The Executive Order makes several notable exceptions to its prohibition on diversity, equity, and inclusion. For example, the Executive Order does not apply to federal or private sector employment preferences to veterans in the U.S. armed forces or to blind employees protected by the Randolph-Sheppard Act. Additionally, the Executive Order does not prevent state and local governments, federal contractors, federally funded educational agencies, or institutions of higher education from engaging in constitutionally protected free speech. And lastly, the Executive Order does not prohibit teachers at federally funded institutions of higher education from advocating for or discussing the employment and contracting practices prohibited by the Executive Order.
Employment Laws Still in Effect
Notwithstanding the prohibitions and requirements regarding affirmative action imposed by the Executive Order, private employers — whether federal contractors or not — are still required to follow the various state and federal anti-discrimination laws that protect employees on the basis of race, color, national origin, religion, sex, sexual orientation, gender identity, disability, and more. And those private employers who are federal contractors or subcontractors retain other contracting obligations they are required to follow under federal law, such as the Davis Bacon and Related Acts, the McNamara O’Hara Service Contract Act, and the National Labor Relations Act, among others. Among the ever-changing landscape of employment laws related to anti-discrimination and affirmative action, employers must be cognizant of these developments as they arise. We are in the midst of sea changes in the federal government’s approach to a variety of employment-related matters, and we will continue to keep our readers posted.
[1] Note that the Executive Order uses the phrase “sexual preference” throughout, but federal law and regulations protect employees on the basis of sexual orientation, not sexual preference, and do not generally use the phrase “sexual preference.”
Executive Order on Strengthening and Promoting Innovation in the Nation’s Cybersecurity and Potential Implications Under the Trump Administration
On January 16, 2025, President Joe Biden signed the “Executive Order on Strengthening and Promoting Innovation in the Nation’s Cybersecurity.” This directive seeks to tackle the increasingly complex and evolving cybersecurity threats confronting the United States. From nation-state actors to sophisticated cybercriminal organizations, the U.S. faces unprecedented challenges to its critical infrastructure, government systems, and private sector networks. The executive order outlines a multifaceted strategy aimed at safeguarding the nation’s digital landscape while encouraging innovation and collaboration in cybersecurity technologies.
However, the future of this order has come into question following President Donald Trump’s inauguration on January 20, 2025. President Trump has shown a readiness to reassess policies set by his predecessor, including the potential revocation of previous executive orders. This client alert offers a summary of President Biden’s cybersecurity order, explores potential implications under the Trump administration, and provides guidance for businesses navigating this uncertain regulatory landscape.
Overview of President Biden’s Executive Order
President Biden’s executive order is a comprehensive initiative aimed at addressing the most pressing challenges in cybersecurity. The directive outlines crucial measures that federal agencies, contractors, and private sector partners are required to adopt to enhance their resilience against cyber threats. Key components of the order include:
Development of Minimum Cybersecurity Standards
The order requires the development of baseline cybersecurity standards for federal contractors and suppliers. These standards encompass requirements for multi-factor authentication (MFA), endpoint detection and response (EDR) systems, and the encryption of sensitive data both in transit and at rest. Contractors must demonstrate compliance to secure or maintain government contracts.
Enhanced Public-Private Collaboration
Acknowledging the interconnected nature of the public and private sectors, the order establishes a framework for improved information sharing. Federal agencies are directed to share threat intelligence and vulnerability information with private entities to enable faster responses to emerging threats.
Sanctions on Foreign Cyber Actors
To deter nation-state-sponsored cyberattacks, the executive order allows for sanctions against foreign actors targeting U.S. entities, including critical infrastructure such as health care facilities and energy systems. This provision underscores the administration’s commitment to holding adversaries accountable for malicious cyber activities.
Quantum-Resistant Cryptography
The order prioritizes transitioning federal systems to quantum-resistant cryptographic algorithms to safeguard sensitive data from future quantum computing threats. Agencies are required to develop implementation plans and timelines for this transition.
Artificial Intelligence in Cybersecurity
The executive order calls for pilot programs to investigate the use of artificial intelligence (AI) in cybersecurity applications, particularly in the energy sector. These programs seek to leverage AI for real-time threat detection, automated responses, and enhanced incident recovery.
Potential Impacts Under the Trump Administration
The Trump administration’s approach to cybersecurity remains uncertain, but early signs indicate possible adjustments to Biden’s executive order. Historically, the administration has focused on minimizing regulatory burdens and encouraging industry-led solutions, which may influence the implementation of this directive.
Adjustments to Cybersecurity Standards
The administration may choose to implement less prescriptive cybersecurity requirements, encouraging businesses to adopt voluntary best practices rather than enforceable mandates for federal contractors. This could lead to greater flexibility but might also introduce variability in security practices.
Reevaluation of Quantum-Resistant Cryptography
While quantum-resistant cryptography addresses long-term risks, the administration might prioritize immediate cybersecurity challenges, potentially delaying the transition to quantum-resistant algorithms.
Focus on Targeted Sanctions
The Trump administration may refine its sanctions policy to focus on specific high-impact cases rather than broad deterrence, which could influence the overall effectiveness of this measure.
Shifts in Public-Private Collaboration
Efforts to enhance public-private collaboration may evolve, with businesses potentially taking on a larger role in independently managing cybersecurity risks. This could lessen the emphasis on centralized federal support for information sharing.
Guidance for Companies
In light of these developments, businesses must proactively adapt to an evolving cybersecurity landscape. Regardless of whether the executive order remains in effect, organizations should prioritize cybersecurity to mitigate risks and uphold resilience. Below are suggested actions for companies:
Strengthen Internal Cybersecurity Measures
Conduct a thorough assessment of existing cybersecurity protocols to identify vulnerabilities and opportunities for enhancement.
Implement multi-factor authentication (MFA), endpoint detection and response (EDR) tools, and robust encryption practices to protect sensitive data.
Develop and test incident response plans to ensure rapid recovery from cyber incidents.
Monitor Regulatory Changes
Stay updated on possible changes to the executive order and associated cybersecurity policies from the Trump administration.
Engage with legal and compliance teams to assess the effects of regulatory changes on business operations.
Monitor state and international regulations to ensure compliance with relevant standards.
Invest in Cybersecurity Innovation
Investigate emerging technologies, such as AI-driven cybersecurity tools, to enhance threat detection and response capabilities.
Evaluate the feasibility of transitioning to quantum-resistant cryptographic algorithms, even in the absence of federal mandates.
Collaborate with industry partners to embrace innovative solutions and exchange best practices.
Foster Public-Private Partnerships
Engage in information-sharing initiatives like the Cybersecurity and Infrastructure Security Agency’s (CISA) programs to remain informed about threat intelligence.
Promote policies that encourage collaboration between the public and private sectors to strengthen collective security.
Prepare for Geopolitical Risks
Monitor geopolitical developments and their potential impact on cyber threats, particularly those originating from nation-states.
Strengthen supply chain security to reduce risks associated with foreign adversaries.
Conduct tabletop exercises to simulate responses to nation-state cyberattacks.
Implications for the Private Sector
The uncertainty surrounding the executive order underscores the necessity for businesses to adopt a proactive and flexible approach to cybersecurity. Key implications include:
Increased Responsibility on Businesses
With potential adjustments to federal oversight, companies may need to be more proactive in managing their cybersecurity risks. Implementing strong internal policies and investing in advanced security technologies will be crucial.
Fragmented Regulatory Environment
If federal mandates are modified, businesses may face a patchwork of state and international regulations. Navigating this fragmented landscape will demand considerable resources and expertise.
Heightened Cyber Threats
The evolving threat landscape, along with potential policy changes, could make critical infrastructure and private networks more vulnerable to sophisticated attacks. Companies must remain vigilant and prepared to respond to emerging threats.
Competitive Differentiation
Organizations that prioritize cybersecurity and demonstrate a commitment to protecting customer data may gain a competitive advantage in the market. Establishing trust with stakeholders through transparency and robust security measures will be crucial.
Final Thoughts
President Biden’s executive order marks a significant advancement in addressing the nation’s cybersecurity challenges. However, its future under the Trump administration remains uncertain, with the potential for policy adjustments. Businesses must navigate this evolving landscape by bolstering internal measures, staying updated on regulatory shifts, and investing in innovation.
While the federal government’s role in cybersecurity may evolve, the responsibility for safeguarding critical systems and data ultimately rests with the private sector. By implementing proactive strategies and encouraging collaboration, companies can enhance their resilience against cyber threats and contribute to a more secure digital ecosystem.
For additional information about President Biden’s executive order, check out President Biden Issues Second Cybersecurity Executive Order.
President Biden Issues Last-Minute Cybersecurity Executive Order
On January 16, 2025, President Biden issued Executive Order 14144, titled “Strengthening and Promoting Innovation in the Nation’s Cybersecurity” (“EO 14144”). EO 14144 builds on President Biden’s Executive Order on Improving the Nation’s Security (“EO 14028”), and aims to strengthen software supply chain security, impose more stringent cybersecurity requirements on federal contractors, combat cybercrime, and encourage the development of identity verification technologies.
EO 14144 prescribes detailed supply chain cybersecurity standards for developers that provide software to the federal government, and recommends that federal agencies treat cybersecurity as a key consideration in software procurements and in the assessment of contractor performance. Building on an existing requirement that software developers submit attestations of their secure development practices to sell products to the federal government, EO 14144 introduces additional supply chain security measures, including a requirement that such developers submit to the Cybersecurity and Infrastructure Security Agency (“CISA”) the following: (1) machine-readable attestations of secure development practices; (2) high-level validation artifacts; and (3) a list of federal government customers. EO 14144 urges CISA to develop an audit process to verify the completeness of the attestations received, and directs CISA to regularly validate sample attestations.
EO 14144 also directs CISA to update the software development attestation form based on future guidance from the National Institute of Standards and Technology (“NIST”), and instructs NIST to provide guidance on industry cybersecurity practices and controls. Based on NIST’s guidance, the Federal Acquisition Regulatory Council will update its regulations to mandate minimum cybersecurity practices for federal contractors, and to require that compliant Internet-of-Things products sold to the federal government carry the United States Cyber Trust Mark label. Further, EO14144 instructs federal agencies to transition to quantum-resistant cryptography standards by the year 2030 and encourages federal agencies to adopt yet-to-be-issued best practices for using open-source software.
EO 14144 also contains a number of provisions addressing cybercrime, including the expansion of the scope of Executive Order 13694 (“Blocking the Property of Certain Persons Engaging in Significant Malicious Cyber-Enabled Activities”), which authorizes the seizing the assets of persons engaged in malicious cyber-related activities. In addition, EO 14144 calls for the establishment of public-private pilot programs to use advanced AI models for cyber defense, and urges the federal government to share data with the academic community to support research into the use of AI in cyber defense. Aiming to reduce identity fraud, EO 14144 also recommends expanding the use of digital identification documents and the development of attribute validation services.
EO 14144’s provisions require federal agencies to develop cybersecurity rules and programs during the first few months of the Trump Administration. As of the date of this publication, EO 14144 remains in effect.
New Administration Puts DEI Programs On Notice
On January 21, 2025, President Trump’s first full day in office, he issued an Executive Order targeting diversity, equity, and inclusion (DEI) and diversity, equity, inclusion, and accessibility (DEIA) programs.1
Titled “Ending Illegal Discrimination and Restoring Merit-Based Opportunity,” the Order sets out a policy to “protect individual initiative, excellence, and hard work…” by terminating “all discriminatory and illegal preferences, mandates, policies, programs, activities, guidance, regulations, enforcement actions, consent orders, and requirements” within the federal government. The Order also directs the government “to combat illegal private-sector DEI preferences, mandates, policies, programs, and activities.”
Key provisions of the Order are summarized below:
Section 3 (“Terminating Illegal Discrimination in Federal Government”). Section 3 rescinds EO 11246, along with other Executive Orders that promote diversity within the federal government and protect federal employees from discrimination. EO 11246, signed by President Lyndon Johnson in 1965, required federal government contractors to develop and maintain affirmative action programs. In addition, among other things, Sec. 3 prohibits the federal Office of Federal Contract Compliance Programs (OFCCP) from promoting diversity. Section 3 also requires all federal government contractors and grant recipients to certify that it does not operate any programs promoting DEI that violate any applicable Federal anti-discrimination laws. Finally, the Order directs the Office of Management and Budget to excise references to DEI principles from all federal acquisition, contracting, grants, and financial assistance procedures, and to terminate all terminate all diversity and equity programs and activities.
Section 4 (“Encouraging the Private Sector to End Illegal DEI Discrimination and Preferences”). This Section orders the head of every federal agency to identify the “most egregious and discriminatory DEI practitioners” by identifying “up to nine 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.”
Section 5 (“Other Actions”). Section 5 directs the Attorney General and the Secretary of Education to issue guidance to all institutions of higher education that receive federal grants or participate in federal student loan programs regarding measures and practices they must follow to comply with the Supreme Court’s decision striking down affirmative action programs in college and university admissions.
This Executive Order is one of many consequential changes impacting employers that the Trump-Vance administration has announced and will seek to implement over the course of their administration. Our team will continue to track and analyze this and other significant directives and policy changes as they are announced. Expect further alerts and guidance regarding these important topics.
1 For purposes of this Alert, both DEI and DEIA programs will be referred to as DEI programs.
The Trump Administration’s Day-One Executive Actions: Impacts on Energy and Environmental Policy and More
On January 20, 2025, President Trump re-assumed the presidency with a flurry of executive orders and memoranda, many of which directly impacted energy and environmental issues. These orders included a production-minded strategy entitled “Unleashing American Energy,” a short-term regulatory freeze, a declaration of a national energy emergency, a specific order regarding wind energy and an order establishing the new Department of Government Efficiency (DOGE). Other topics may have profound impacts on energy, like the trade executive order which may impact the supply chain for energy projects.
Bracewell’s Policy Resolution Group has prepared a source book of analytical material on all the executive orders and more. We invite you to read through the material and contact us with questions. It has been said that so many orders came out on Day One precisely to shield any one order from too much criticism. In any event, the process of addressing all these executive actions is ongoing and iterative.
To get a sense of all that has happened, we have broken out a series of answers to frequently asked questions. Below is our thinking, although it is not yet dispositive.
1. What is an executive order anyway, and how far can it move the needle?
A presidential executive order is a signed directive from the president to federal agencies and officials of the executive branch, carrying the force of law. These orders allow presidents to move quickly on policy matters without congressional approval, making them powerful tools for implementing the president’s agenda.
However, executive orders face significant limitations. First, they must be rooted in powers granted to the president by the Constitution or delegated by Congress through federal law. Presidents cannot simply create new laws or override existing ones through executive orders. Second, executive orders can be challenged in federal courts if they exceed presidential authority or violate constitutional rights. The Supreme Court has struck down executive orders multiple times throughout history.
Additionally, future presidents can easily revoke or modify previous executive orders with a stroke of a pen. This means that policies implemented through executive orders may lack permanence compared to legislation passed by Congress. Congress can also pass laws that explicitly override executive orders or deny funding for their implementation.
Finally, executive orders only apply to the federal government and its employees. They cannot directly regulate private citizens, businesses, or state governments unless specifically authorized by the Constitution or federal law.
2. I see the president signed an executive order implementing a regulatory freeze. What does that mean for rules already final? What does it mean for sub-regulatory actions like guidance?
A regulatory freeze like the one described in President Trump’s recent executive order could be applied to regulations and to guidance documents or other sub-regulatory notices. Such freezes are fairly commonplace during presidential transitions between administrations of different political parties. In brief, the executive order, titled “Regulatory Freeze Pending Review,” directs executive departments and agencies to halt the proposal or issuance of any rules until they are reviewed and approved by a department or agency head appointed or designated by the president after January 20, 2025.
For rules that are recently finalized and effective, the executive order may still impact their implementation depending on their status and significance.
The order directs agencies to consider suspending or extending the effective dates of recently issued rules to allow for further review by the new administration. This review ensures alignment with the administration’s priorities and provides an opportunity to re-evaluate rules for their legal, economic, and policy implications.
If deemed inconsistent with the administration’s objectives, such rules could be modified, repealed, or replaced. However, exemptions may apply to rules critical to public health, safety, or national security.
As a result, agencies and stakeholders may face delays or uncertainty regarding the enforcement of these recently finalized regulations. This process underscores the administration’s focus on recalibrating the regulatory landscape to reflect its goals while maintaining flexibility for urgent matters.
The executive order establishes a temporary halt on the issuance, proposal, or implementation of new regulations and guidance by executive departments and agencies. It applies to rules and regulatory actions, including those defined under the Administrative Procedure Act (5 U.S.C. § 551(4)), Executive Order 12866, and Executive Order 13891, encompassing guidance documents and policy interpretations.
The order mandates that no regulatory action be proposed or finalized without review and approval by a department or agency head appointed by the president after January 20, 2025. It also calls for the withdrawal of regulations that have been submitted to the Federal Register but have not yet been published, as well as the suspension or extension of effective dates for recently issued rules to allow for additional review.
This freeze aims to ensure that pending or new regulations align with the incoming administration’s priorities, allowing for comprehensive evaluation of their economic, legal, and policy implications. Exemptions may be granted for rules critical to public health, safety, or national security, as determined on a case-by-case basis.
3. What did the president mean when he declared a “National Energy Emergency” and what are the practical implications?
President Trump declared a “National Energy Emergency,” citing insufficient energy production, transportation, refining, and generation as critical threats to the US economy, national security, and foreign policy. The key elements of that declaration included: (1) an order designating vulnerabilities in energy infrastructure and supply as unusual and extraordinary threats, justifying the use of broad emergency powers; (2) a directive to agencies to expedite the leasing, permitting, siting, production, transportation, refining, and generation of energy resources, including on federal lands; and (3) invoking specific authority, like the Defense Production Act (DPA) and Section 202(c) of the Federal Power Act (FPA).
What does it all mean?
DPA grants the federal government authority to direct industrial production to address national security needs, which now include energy infrastructure. Theoretically, it could compel companies to prioritize contracts for energy infrastructure, including pipelines, refineries, and other projects. Pursuant to DPA authority, the government might offer loans, grants, or subsidies to increase the domestic manufacturing of critical energy components like turbines, batteries, and transformers. DPA could even be used to increase capacity for refining fossil fuels or producing biofuels.
FPA Section 202(c) enables the secretary of energy to direct power plants or transmission systems to operate during emergencies to ensure grid reliability, potentially keeping coal, natural gas, and nuclear power plants operational by overriding environmental or regulatory restrictions.
By leveraging emergency tools like DPA and Section 202(c), the administration could expedite projects and mitigate regulatory delays, reshaping the US energy landscape. But use of the authority in this manner is still somewhat untested.
4. There has been so much discussion on permitting reform, particularly in Congress relating to the National Environmental Policy Act (NEPA). What do the executive orders do to advance the permitting reform agenda? Does it obviate the need for congressional action?
Unleashing American Energy: The executive order entitled “Unleashing American Energy” addresses NEPA when it calls for streamlined environmental reviews and permitting processes for energy projects. It directs federal agencies to ensure that NEPA reviews are completed within specified timeframes and limits their scope to avoid delays in energy development.
The order likely improves efficiency by reducing bureaucratic hurdles and establishing clearer timelines, but its effectiveness candidly will depend on agency implementation and potential legal challenges.
The order may well expedite permitting administratively, but it does not eliminate the need for legislation to codify broader reforms or address more complex permitting barriers, such as litigation risks or inter-agency conflicts. Without Congress acting, the order’s impact may be limited to short-term procedural improvements rather than lasting, comprehensive changes.
National Energy Emergency: Unlike past administrations prioritizing renewable energy (e.g., President Biden’s clean energy investments), this order emphasizes fossil fuels and traditional energy infrastructure as critical to national defense. The “National Energy Emergency” executive order’s directive to federal agencies to expedite the leasing, permitting, and siting of energy projects, including on federal lands, also could streamline the approval process for energy infrastructure. By invoking emergency authorities like DPA, the government can prioritize energy projects deemed critical to national security and provide financial incentives to accelerate production and infrastructure development. Additionally, FPA Section 202(c) authority could be fashioned to override environmental or regulatory constraints in certain circumstances.
5. What about the pause on federal spending under the Inflation Reduction Act?
Section 7 is the provision within the “Unleashing American Energy” executive order which purports to “terminate the Green New Deal.” We’re still thinking it through. But in any event, Section 7 appears to be about disbursement of federal funds or loan guarantees, and not about tax credits taken on a corporate income tax return to offset a tax liability. An argument could be made that if the Treasury is providing a direct payment to an entity that has no tax liability (like a tax-exempt entity), that could be regarded as a disbursement. This issue is not squarely addressed in the executive order.
Even with its limited scope, Section 7 of the executive order contains directives that may raise legal and contractual concerns, particularly under the Impoundment Control Act (ICA) and regarding federal contractual obligations.
Section 7(a) mandates the following:
Immediate Pause of Funds: All agencies are directed to pause disbursements of funds appropriated under the Inflation Reduction Act of 2022 (Public Law 117-169) and the Infrastructure Investment and Jobs Act (Public Law 117-58).
Review Process: Agencies must review their processes and programs for issuing grants, loans, contracts, or any financial disbursements to ensure alignment with the executive order’s policy.
Reporting Requirement: Agency heads must report their findings within 90 days to the National Economic Council (NEC) and the Office of Management and Budget (OMB), including recommendations for policy alignment.
Conditional Disbursement: Funds cannot be disbursed until the OMB Director and the Assistant to the President for Economic Policy approve them as consistent with the executive order.
Are there legal limits on this? Yes. This provision could run afoul of the Impoundment Control Act which requires congressional acquiescence for refusal to allocate appropriated funds. Also, the federal government can be subject to legal remedies associated with violation of contracting rules. If challenged, this section of the executive order might be subject to scrutiny by Congress, the GAO, inspectors general, or federal courts, as it arguably encroaches on Congress’s power of the purse and may undermine federal obligations.
6. What is DOGE and its range of motion?
The executive order establishing DOGE tasks it with modernizing federal technology and enhancing governmental efficiency. The order restructures the United States Digital Service (USDS) within the Executive Office of the President, renaming it the United States DOGE Service. Additionally, a temporary organization — the US DOGE Service Temporary Organization — was created to execute the president’s 18-month agenda, set to conclude on July 4, 2026. Federal agencies are also required to establish DOGE Teams to collaborate with USDS in implementing this agenda.
The structure evades lots of oversight, but not all. For example:
Freedom of Information Act (FOIA): FOIA applies to federal agencies as defined in 5 U.S.C. § 551, which excludes the Executive Office of the President and its components. Since DOGE operates within the Executive Office, it is generally not subject to FOIA.
Administrative Procedure Act (APA): The APA governs federal agencies’ rulemaking and adjudication processes. Entities within the Executive Office of the President that solely advise and assist the President are exempt from the APA. DOGE’s advisory role likely places it outside the scope of the APA.
Open Meetings Requirements: The Sunshine Act mandates open meetings for federal agencies headed by a collegial body. Since DOGE is led by an administrator rather than a multimember body, this act does not apply.
Federal Register Publications: Agencies must publish certain information in the Federal Register. However, components of the Executive Office of the President that solely advise and assist the President are typically exempt from these requirements. DOGE is not obligated to publish its findings or recommendations in the Federal Register.
Annual Federal Appropriations: DOGE’s activities depend on funding through annual appropriations. The implementation of its initiatives is subject to the availability of appropriated funds, as stated in the executive order.
Other Legal Limitations: DOGE must operate within the bounds of existing laws and regulations. The executive order specifies that its provisions should not impair or affect the authority granted by law to executive departments or agencies, nor the functions of the Office of Management and Budget. Implementation is subject to the availability of appropriations and applicable law.
While DOGE may claim exemptions from FOIA or the APA, any action that directly impacts individuals or organizations outside the Executive Office could be subject to judicial review. This could expose DOGE to lawsuits that compel disclosures or constrain its activities.
Questions remain, too, related to rules governing conflicts of interest for agency officials. For example, senior officials must file public financial disclosure reports under the Ethics in Government Act (EGA) to identify potential conflicts of interest between their financial interests and official duties. Meanwhile, the Conflict of Interest Statutes (18 U.S.C. §§ 201-209) prohibit officials from participating personally and substantially in government matters affecting their financial interests and from receiving outside compensation for government-related matters. Finally, the Office of Government Ethics may require divestitures, recusals, or waivers to address conflicts of interest for senior officials.
At the same time, if DOGE were to rely on external advisors, rules requiring disclosure of relevant financial interests would apply. Further, if DOGE forms a formal advisory group, the Federal Advisory Committee Act (FACA) then applies, which similarly requires public disclosure of members’ financial interests, open meetings unless exceptions apply, and publication of reports and advice in the Federal Register, among others. Informal consultations or individual advisors generally do not trigger FACA, but structured advisory groups would. In fact, on the same day as President Trump’s inauguration, various public interest groups filed lawsuits that alleged DOGE’s structure and operation violated FACA.
Can DOGE avoid congressional oversight?
While DOGE may have some structural features that limit direct congressional oversight, it cannot entirely avoid scrutiny due to the checks and balances inherent in US governance. Oversight mechanisms and potential limitations include budget and appropriations, congressional hearings, investigations or audits by the Government Accountability Office, or congressional legislation targeting DOGE’s structure, functions, or findings.
Frank V. Maisano, Paul Nathanson, George D. Felcyn, Joseph A. Brazauskas, Anna B. Karakitsos, Liam P. Donovan, Dylan Pasiuk, and Kyle J. Spencer also contributed to this article.
President Trump’s Executive Order on Recognizing Two Sexes: Implications for Private Employers
On Monday, January 20, 2025, President Donald Trump issued an Executive Order entitled “Defending Women From Gender Ideology Extremism and Restoring Biological Truth To The Federal Government” (the “Order”). The Order declares that the United States will only recognize two sexes, male and female, and states that these sexes are binary, biological, and “not changeable.”
The Order provides that, under the direction of President Trump, the Executive Branch will “enforce all sex-protective laws to promote this reality.” As part of this enforcement, federal agencies are required to remove, and cease issuing, any statements, policies, regulations, and other messages that “promote or otherwise inculcate gender ideology,” which the Order defines as “the idea that there is a vast spectrum of genders that are disconnected from one’s sex.” Federal agencies are also required to take all necessary steps permitted by law to “end Federal funding of gender ideology.” Moreover, pursuant to the Order, all federal agencies and employees must use the term “sex” rather than “gender” when acting in an official capacity.
The Order also requires all government-issued identification documents, such as passports, visas, and Global Entry cards to “accurately reflect the holder’s sex.” This marks a reversal of the Biden Administration’s policy which, beginning in 2022, allowed U.S. citizens to select the gender-neutral “X” on their passports. In addition, the Order mandates “privacy in intimate spaces” to ensure that single-sex spaces, such as federal prisons and rape shelters, are designated by sex and not by gender identity.
Limiting the Scope of Bostock
Notably, the Order explicitly states the Trump Administration’s intent to limit the scope of the U.S. Supreme Court’s 2020 ruling in Bostock v. Clay County. In Bostock, the Supreme Court held that Title VII of the Civil Rights Act of 1964’s prohibition on discrimination “on the basis of sex” includes discrimination on the basis of sexual orientation and gender identity. According to the Order, the Biden Administration interpreted Bostock to “require[] gender identity-based access to single-sex spaces.” The Order directs the Attorney General to immediately issue guidance to federal agencies to “correct [this] misapplication” of Bostock to “sex-based distinctions in agency activities.” The Senate Judiciary Committee is scheduled to vote on President Trump’s Attorney General nominee, Pam Bondi, on January 29.
What The Executive Order Means for Private Employers
Importantly, the Order directs the Attorney General to issue guidance 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.” Pursuant to that guidance, the Order instructs the Attorney General, the Secretary of Labor, and the General Counsel and Chair of the Equal Employment Opportunity Commission (“EEOC”), as well as any other agency heads with enforcement power, to prioritize investigations and litigation to enforce the binary sex mandate. While the EEOC is generally expected to slow the pace of litigation and shift away from enforcement through investigations against employers suspected of violating discrimination laws under newly appointed Acting Chair Andrea R. Lucas, employers in the coming months and years may see more litigation and enforcement through investigations against employers who are not in compliance with the Executive Order’s mandate.
Lastly, the Order states that all federal agencies must promptly rescind any guidance inconsistent with the Order and/or with the Attorney General’s forthcoming guidance. Specifically, the Order also calls for the rescission of the EEOC’s April 2024 guidance, entitled “Enforcement Guidance on Harassment in the Workplace.”
As Proskauer previously covered, that guidance provided broad protection for LGBTQ+ workers against harassing conduct based on sexual orientation or gender identity. Among other things, the guidance also emphasized that sex-based harassment under Title VII encompasses harassment based on pregnancy, childbirth, or related medical conditions (including the decision to have, or not have, an abortion). With this guidance no longer in effect, employers should review any modifications to policies or practices implemented in response to the guidance against the other requirements of the Executive Order.
Takeaways
This Order was just one of dozens of executive actions taken by President Trump within hours of his inauguration. We expect there will be more updates in the coming days and weeks, and we will continue to monitor and report on these updates.
President Trump Revokes Affirmative Action Requirement for Federal Government Contractors
On January 21, 2025, President Trump issued an Executive Order revoking Executive Order 11246, which imposes anti-discrimination and affirmative action requirements on federal government contractors and subcontractors. This action, part of the new administration’s broader assault on DEI efforts in the federal government and private sector, may eliminate a significant compliance obligation for federal contractors. However, much remains uncertain about the going forward status of affirmative action requirements in federal contracting.
The new Executive Order requires the Office of Federal Contract Compliance Programs (OFCCP), which administers Executive Order 11246 among other laws, to immediately cease promoting diversity, stop federal contractors and subcontractors from taking affirmative action, and end workforce balancing by federal contractors based on race, color sex, sexual preference, religion, or national origin. The Executive Order also states that federal contractors shall not consider race, color, sexual preference, religion, or national origin “in ways that violate the Nation’s civil rights laws” when making employment, procurement, and contracting decisions. The Executive Order states that federal contractors may continue to comply with the regulatory scheme required by Executive Order 11246 until April 20, 2025.
OFCCP did not immediately issue guidance on how the new Executive Order impacts contractors’ obligations. Given that OFCCP’s regulations provide that affirmative action goals are not quotas or set-asides, do not supersede merit selection, and do not justify making employment decisions in a discriminatory manner, it is unclear how they conflict or would interact with the Executive Order’s prohibition of illegal discrimination and workplace balancing.
With that said, the now-revoked Executive Order 11246 is the source of those OFCCP regulations and contractor race and gender affirmative action obligations. It does not appear that the Executive Order would affect veteran affirmative action plan obligations under the Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (VEVRAA) or disability affirmative action plan obligations under Section 503 of the Rehabilitation Act, given the statutory basis for those requirements.
In addition to eliminating Executive Order 11246, the new Executive Order requires that every federal contract or grant award must now include a term certifying that the contractor or award recipient will not operate any programs promoting DEI, and a term requiring compliance “in all respects with all applicable Federal anti-discrimination laws.” The Executive Order states that this term is material to the government’s payment decision. This raises the specter of potential whistleblower actions under the False Claims Act against contractors operating allegedly discriminatory programs.
The revocation of Executive Order 11246 underlines the extent to which DEI efforts are in the Trump administration’s crosshairs. On the same day as the new Executive Order, the Office of Personnel Management issued a memorandum immediately suspending with pay all federal employees working in agency DEI offices. As other agencies continue to take actions based upon President Trump’s DEI-related executive orders, companies that do business with the federal government will need to pay close attention.
While much remains unclear, the new Executive Order will undoubtedly be a sea of change for federal contractors and subcontractors. Polsinelli is available to assist contractors in navigating the changing landscape surrounding affirmative action and other DEI requirements.