Diversity, equity, and inclusion (DEI) initiatives have been a cornerstone of workplace reform over the past decade, especially among companies that work with the federal government. These programs often shaped hiring policies, training practices, and corporate culture, aiming to address historic inequalities and build more inclusive workplaces. That landscape is now changing.

With the signing of Executive Order 14173, federal contractors are facing new rules that eliminate many DEI programs and requirements. This executive action aims to remove what it calls "preferential treatment" based on race, gender, or identity from federal contracting processes. For workers—especially those from historically underrepresented communities—this shift raises serious questions about workplace rights, protections, and what comes next.

In this article, we’ll break down what Executive Order 14173 does, how it may impact hiring practices, and what it means for workers, employers, and the future of workplace equity.

What Is Executive Order 14173?

Executive Order 14173, signed in 2024, revokes prior federal guidance and policies that supported or required diversity, equity, and inclusion programs in government contracting. It directs federal agencies to ensure that contracting decisions are made without considering race, ethnicity, gender, or similar characteristics as part of DEI-focused programs or benchmarks.

Under this order, agencies are prohibited from requiring DEI commitments in procurement processes, and contractors may no longer receive favorable consideration for implementing diversity programs. While the order does not explicitly ban DEI programs in private companies, it affects any company seeking or maintaining a contract with the federal government.

Impact on Hiring Practices

The removal of DEI requirements may shift how federal contractors approach hiring. Affirmative action policies—once used to ensure diverse candidate pools—could now be seen as inconsistent with federal contracting rules. While some employers may scale back or restructure their diversity efforts, others might choose to maintain them outside the scope of federal contracts.

This change could affect underrepresented groups seeking employment with federal contractors. Without structured outreach or hiring goals, there's concern that progress in building inclusive workforces could slow or even reverse. It’s a significant shift, especially in industries where federal contracts make up a large portion of employment opportunities.

Legal and Compliance Challenges

Even as Executive Order 14173 restricts DEI-related requirements in federal contracting, employers are still bound by civil rights laws like Title VII of the Civil Rights Act of 1964. Title VII prohibits discrimination based on race, color, religion, sex, or national origin in hiring, firing, and other employment practices.

This creates a legal tightrope for employers. On one hand, they must comply with the executive order when pursuing federal contracts. On the other, they must avoid employment practices that could be viewed as discriminatory under existing anti-bias laws.

Legal experts expect increased scrutiny on hiring and promotion practices, especially where DEI efforts continue in any form. Contractors will likely need to revise internal policies and training materials, ensuring compliance while also fostering fairness and inclusion.

How Workplace Culture Could Be Affected

Beyond compliance, the end of DEI mandates in federal contracting could have ripple effects on workplace culture. Many companies implemented DEI programs not just for compliance, but to improve collaboration, retention, and employee satisfaction.

If companies scale back these efforts, it could lead to reduced employee engagement—especially among workers who saw DEI initiatives as a sign of progress. Employees may question whether their voices will still be heard, or whether future promotions and leadership opportunities will be equitable.

On the flip side, some organizations may take this as an opportunity to rebuild DEI programs in a more grassroots, employee-led way—separated from federal incentives but still rooted in company values.

Workers’ Legal Recourse

While Executive Order 14173 changes how DEI is handled in contracting, it does not erase workers’ legal rights. Employees are still protected by laws such as:

If you believe you’ve been treated unfairly based on your race, gender, religion, disability, or other protected status, you still have legal options. That includes filing a claim with the Equal Employment Opportunity Commission (EEOC) or pursuing legal action with help from an employment lawyer.

What Employers Should Do Next

Companies impacted by this executive order should consult legal counsel to update their compliance strategies. Key steps include:

  • Reviewing current DEI programs and materials for conflicts with the new order
  • Training HR teams on the difference between inclusive practices and preferential treatment
  • Ensuring job postings and interviews remain fair and bias-free
  • Reinforcing anti-discrimination policies that comply with federal law

Maintaining a culture of fairness and respect doesn’t have to end with this executive order—but it may require a different approach.

Call Brandon J. Broderick For Legal Help

The workplace is evolving, and so are the laws that govern it. If you're concerned about how Executive Order 14173 affects your rights—or your responsibilities as an employer—don’t wait to get answers.

At Brandon J. Broderick, Attorney at Law, we help workers and employers navigate changing employment laws. Whether you’re facing discrimination, restructuring DEI programs, or simply want to understand your options, our team is here to help.

Contact us today for a free consultation.

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