Remind me, what's an executive order?

Executive orders are regulations purchased by the president of the United States that direct federal government companies and officials to take specific actions. While they are not laws, they have the force of law and effect how existing laws are executed or imposed.

Executive orders impact the companies of the executive branch and therefore do not require the approval of Congress. They must be within the president's constitutional authority and might be challenged in court if considered unconstitutional.

Executive orders may be rescinded, reversed by future presidents, or challenged in court, and enforcement priorities can change during any administration.

The brand-new administration's actions have significant effects beyond executive orders. For more on mitigating risk, worldwide companies can seize new opportunities by staying active.

Implications of the executive orders for DEI efforts and work in private-sector companies

On Jan. 21, President Trump issued "Ending Illegal Discrimination and Restoring Merit-Based Opportunity," which reverses various prior executive orders and memoranda, including Executive Order 11246 (EO 11246) signed in 1965 by President Lyndon B. Johnson.

EO 11246 needed every federal government agreement to include a statement that the specialist will not victimize any staff member or applicant for work based on race, creed, color, or national origin.

Despite President Trump's new executive order, the underlying federal anti-discrimination law stays the same for private-sector workers.

However, the executive order signals that there might be changing enforcement concerns in the new administration. The order directs all federal firms to "combat prohibited private-sector DEI preferences, requireds, policies, programs, and activities."

In December 2024, President-elect Trump tapped Harmeet K. Dhillon to lead the Justice Department's civil rights office, pointing to his record of "suing corporations who use 'woke' policies to victimize their workers."

In addition to revoking EO 11246, the Jan. 21 executive order instructs each company of the federal government to identify "approximately nine potential civic compliance examinations" of private sector entities within 120 days of the order - by May 21, 2025.

The economic sector entities subject to these examinations include publicly traded corporations, big nonprofits - consisting of bar associations - big structures, and universities whose endowments surpass US$ 1 billion.

Organizations that may be targeted should ask:

- What is my company's danger tolerance?
- How will staff members react to the business's actions?
- How will customers and stakeholders react?
What in-house counsel must consider:

Assess any federal contracts and grants

- Determine if they include any terms or conditions related to DEI that might contrast with current laws and policies
Review your organization's existing DEI policies to understand your danger

- Prepare for increased scrutiny and prospective civil compliance examinations
Document, file, file

- Hiring and recruitment procedures
- Performance examinations and promotion decisions
- Training materials and attendance records
- Any modifications to DEI policies
Implications for federal contractors

To name a few measures, the Jan. 21 Executive Order needs the heads of federal firms to include particular terms in every or grant award:

- "A term needing the legal counterparty or grant recipient to concur that its compliance in all aspects with all relevant Federal anti-discrimination laws is product to the government's payment choices for functions of area 3729( b)( 4) of title 31, United States Code"; and
- "A term requiring such counterparty or recipient to certify that it does not run any programs promoting DEI that break any appropriate Federal anti-discrimination laws."
Section 3729 of title 31 of the United States Code is a provision of the US False Claims Act, a federal law that imposes civil penalties on those who make false claims to the government in order to influence the payment or receipt of cash or home.

The accreditation requirement carries a possible threat of lawsuits for federal contractors under the False Claims Act. In-house legal representatives at federal contractors hence have a specific interest in guaranteeing their company's policies, procedures, practices, interactions and material, are examined. Assess if changes are needed to reduce the threat of lawsuits.

Executive orders targeting prohibited migration

President Trump's initial flurry of executive orders consisted of numerous - such as the Jan. 20 executive order "Protecting the American People Against Invasion" - aimed at restricting illegal immigration and deporting unlawful immigrants. The orders require enforcement actions by federal agencies against unlawful migration.

In-house lawyers must consider examining their company's work eligibility verification process. They may likewise wish to consider whether the organization is prepared for reacting to an I-9 audit or a worksite enforcement action (or raid) by immigration enforcement agencies.

Sectors that may be particularly affected consist of farming, hospitality, and other markets such as construction. From 2020-2022, 42 percent of crop farmworkers held no work permission, according to the US Department of Agriculture. The American Immigration Council estimates that more than one million undocumented immigrants operate in hospitality, representing 7.1 percent of the labor force.

In-house counsel have an essential role to play in establishing and ensuring consistent application of the Form I-9 and E-Verify policies the federal government uses to carry out and enforce migration law, shares John W. Mazzeo, AGC, director of I-9 and E-Verify compliance for Vertical Screen, Inc., in a 2024 ACC Docket post.

Take a look at useful lists of considerations pertinent for internal attorneys on the topic of I-9 audits and worksite enforcement actions.

If a company does not work together with a civil administrative warrant presented by US Immigration and Customs Enforcement (ICE), there is a threat that the agency could begin an I-9 audit if they felt an employer was obstructing their need to jail a non-citizen staff member, or sometimes get a criminal warrant from a judge if actions support it.

Steps internal counsel need to think about:

- Determine how numerous workers might potentially be affected
- Review your organization's work eligibility confirmation procedure
- Ensure your company's procedure is recorded and defensible
- Implement and impose clear policies
- Monitor legal advancements, consisting of lawsuits and enforcement assistance
Mitigate danger, stay nimble, and seize brand-new opportunities

The recent executive orders will significantly impact international companies. Legal departments and internal counsel will need to assist their companies understand and adapt to modifications, making sure compliance or litigating when appropriate.

A number of the brand-new administration's decisions will play out over the coming months, consisting of new executive orders and legal difficulties. The Docket will continue to keep an eye on advancements. Global internal attorneys need to get ready for rapid advancements related to:

Trade and tariffs. On Feb. 1, President Trump purchased the imposition of a 25-percent tariff on imports from Canada and Mexico, and 10-percent additional tariffs on imports from China. The previous two were both delayed by a month as the administration takes part in settlements. Meanwhile, China has actually started its own retaliatory steps on US goods. He had actually formerly announced his intent to enforce 25-percent intensifying tariffs on Colombia (an action that was ultimately not taken).
Technology and intellectual property. Among the president's very first actions was to rescind the previous administration's AI executive order. The brand-new administration likewise extended a grace period for TikTok's upcoming ban, sending out waves throughout the technology sector, both in the United States and abroad.
Energy, environment, and health. The president also withdrew the United States from the Paris Climate Agreement and the World Health Organization, putting an early emphasis on American energy self-reliance and far from the previous administration's global sustainability efforts.
Steps in-house counsel should think about:

- Assess the effect of potential tariff boosts on supply chain and organization connection.
- Assess the organization's dependency on social networks platforms, such as for marketing functions, and the prospective requirements to backup social media data and possessions in case their preferred platform stops to be available.
- Consider how advancements in the brand-new administration's method to ecological, sustainability and visualchemy.gallery governance concerns might impact the organization's ESG method.
Disclaimer: The information in any resource in this site need to not be construed as legal advice or as a legal viewpoint on specific truths, and must not be considered representing the views of its authors, its sponsors, and/or ACC. These resources are not meant as a conclusive declaration on the subject resolved. Rather, they are meant to work as a tool offering practical guidance and referrals for the busy in-house practitioner and other readers.