How Do DEI Executive Orders Impact Government Contractors

Recent executive orders aimed at eliminating DEI initiatives could pose risks to government contractors. These orders also raise a number of complicated legal issues that federal contractors will need to navigate. We highly recommend speaking to an attorney about what this could mean for you.

What do these executive orders mean?

There are two main executive orders that seek to end diversity, equity, and inclusion programs in the workplace. The goal of these orders is to knock down private sector DEI efforts, preferences, mandates, policies, programs, and activities.

Risk to Federal Contractors

Government contractors need to evaluate their current DEI policies and practices and look for potential legal implications. The federal government or private “qui tam” plaintiffs could come after you for FCA liability, criminal and civil investigations, termination of existing grants and contracts and impact to future contracting opportunities.

On the other hand, “DEI” is not “illegal” per se. The courts, not the executive branch, have the final say in what a law means. Your personnel policies may have brought you a great workforce. Don’t feel you have to tear it down just because of a press release.

It is crucial to evaluate whether any of your DEI policies or initiatives truly violate federal anti-discrimination laws or whether you have a program worth defending and continuing. This can be a difficult determination, so we encourage you to hire an attorney to help you navigate this process.

Legal Changes to Executive Orders

Lawsuits are already challenging the legality of these executive orders, further muddying the waters of understanding the true impacts they will have on business policy and practices. In the meantime, federal contractors should work with legal counsel to evaluate their current policies, monitor legal challenges and enforcement actions and seek counsel from contracting officers.

Take Action Now

In the event that courts grant an injunction, government contractors may have additional time to consider changes, but we encourage you to act now. You should also consider the risk of other forms of legal action that might continue, such as non-FCA civil enforcement actions, shareholder liability suits, actions for breach of contract and loss of future contracting opportunities. On the other hand, rushing to change your personnel policies can be disruptive as well.

If you are in need of an attorney’s advice, please contact Cook, Craig, and Francuzenko today. Our firm has attorneys who specialize in a variety of practice areas. With over 100 years of combined experience, we are seasoned professionals ready to help you.