Federal Contractors Weigh Risks of DOL’s Affirmative Action Ask

Federal contractors are in a precarious position of weighing whether to rebuff a Trump administration request for information on dissolution of their affirmative action programs or risk government scrutiny through the disclosure.

The Department of Labor’s Office of Federal Contract Compliance Programs recently published a letter asking companies that do business with the government to voluntarily share information on newly directed rollbacks to previously mandatory race-and-sex-based employment and recruitment plans. But after the 90-day response window, the OFCCP will likely no longer exist, based on the White House’s budget proposal.

Coupled with the Trump administration’s push to target diversity programs in the private sector, the OFCCP’s request presents a tricky scenario for contractors without clear guidelines as to how other government agencies may use those responses after the office fully winds down.

“Why is the agency seeking all of this information when they’re going to cease to operate in a matter of months?” said Matthew Camardella, a Jackson Lewis attorney.

The agency is on course to close by October. The administration June 30 said it would officially rescind regulations implementing executive order 11246, which had established the OFCCP’s power to audit contractors for race and sex-biased bias and to ensure they have affirmative action programs.

President Donald Trump’s January executive order reversing decades-old EO 11246 gutted the agency. It led to an eventual mass layoff of its staff, that’s since been tied up in litigation over government-wide reductions in force.

OFCCP Director Catherine Eschbach’s June 27 letter said the agency is now giving the tens of thousands of companies that held nearly $800 billion in contracts in fiscal year 2024 the “opportunity to provide information about their efforts” to follow the administration’s deadline to “wind down compliance” with EO 11246 by April 21.

Targeting DEI

With OFCCP on the chopping block, Eschbach’s request could help the administration identify contractors the government deems as having unlawful diversity, equity, and inclusion programs or not complying with Trump’s rescission of EO 11246, said Josh Roffman, attorney at Roffman Horvitz, PLC.

Trump’s executive order also directed agencies to include terms in contracts that require the companies they do business with to certify they don’t operate “any programs promoting DEI” that would violate discrimination laws.

The request may be a tool to “build evidence” of employers with DEI programs deemed unlawful by the administration, Roffman said.

In the same order, Trump directed heads of agencies to identify up to nine potential civil compliance investigations of publicly traded corporations. This puts a target on DEI programs at companies that don’t even hold government contracts.

Eschbach’s letter details a wide range of actions contractors may want to provide information about, including leadership programs or trainings available to employees of a certain race or sex, or placement goals based on those characteristics.

In a statement to Bloomberg Law Eschbach said the agency is “pleased with the voluntary responses we’ve received so far, as this engagement underscores our broader commitment to transparency and compliance, without creating new mandates.”

The OFCCP declined to comment with additional information about how the responses will be used.

Slashing the OFCCP is just one of the administration’s actions taken in the past six months to move swiftly on an anti-DEI agenda.

The Department of Justice and Equal Employment Opportunity Commission released joint guidance outlining what DEI programs could violate Title VII of the 1964 Civil Rights Act.

“While OFCCP may be gone, the EEOC isn’t going to go anywhere,” said Consuela Pinto, a partner at PintoBrown PLLC and former deputy associate solicitor in the civil rights and labor management division of DOL.

If the OFCCP hands information over to the EEOC, the agency could potentially use it for an investigation, Pinto added.

A memorandum of understanding between OFCCP and EEOC allows the agencies to share any documents pertaining to the effective enforcement of any laws that fall within the jurisdiction of either agency, including Title VII.

Even without a charge submitted by a worker, which traditionally contributes to the bulk of the EEOC’s enforcement, an EEOC member could initiate a commissioner’s charge, using information from the OFCCP.

This would allow the EEOC to investigate a company over an allegedly discriminatory DEI program and bring enforcement action if appropriate.

No Safe Harbor

Acting EEOC Chair Andrea Lucas is barred from more aggressively pursuing an anti-DEI agenda since the agency currently lacks a quorum. But if Trump’s latest commissioner nominee is confirmed by the Senate, a 2-1 Republican EEOC majority clears the path for more lawsuits.

Lucas already signaled her intent to root out DEI through letters sent to law firms requesting information about their diversity policies.

Employers are their own risk to “assume there won’t be enforcement of this fairly soon,” Roffman said.

The DOJ also launched an initiative to use the False Claims Act, which is meant to target fraud by government contractors, as a tool to target companies for DEI deemed unlawful.

Federal contractors should not respond or voluntarily submit the requested information to the OFCCP portal based on the risks at hand, especially without a safe harbor provided for companies, several labor attorneys said.

“There’s nothing that would prevent them now from taking this information and sending it to the EEOC or DOJ or opening up their own complaint,” said Craig Leen, a partner at K&L Gates LLP and OFCCP director during the first Trump administration.

Eschbach should provide a supplemental letter noting that responses are only aimed at compliance assistance and will not be used for enforcement against companies, otherwise answering the request poses a lot of risk without any benefit, Leen added.

But not responding to a government request, even a voluntary one, could lead to pushback.

There’s a possibility the government will place contractors who don’t respond on a list of non-cooperative employers and that could impact contract decisions, Camardella said.

“That’s probably a remote possibility, but again, we can’t rule it out with this administration,” he said.