Latest DEI Executive Order raises compliance issues for federal contractors

by Tammy Binford

President Donald Trump’s latest order targeting diversity, equity, and inclusion (DEI) practices by employers brings up issues about how employers with federal contracts can ensure compliance.

On March 26, 2026, the White House released Executive Order (EO) 14398 titled “Addressing DEI Discrimination by Federal Contractors.”

It follows another order targeting DEI, EO 14173, which was issued on January 21, 2025. Titled "Ending Illegal Discrimination and Restoring Merit-Based Opportunity,” that EO ordered all executive departments and agencies “to terminate all discriminatory and illegal preferences, mandates, policies, programs, activities, guidance, regulations, enforcement actions, consent orders, and requirements.”

The January 2025 order further required federal agencies “to combat illegal private-sector DEI preferences, mandates, policies, programs, and activities.”

Nita Beecher, an attorney with FortneyScott in Washington, D.C., says she thinks the new EO is intended to clarify questions that have come out of the previous DEI order. She says federal contractors need to ensure their policies don’t discriminate based on race or ethnicity—whether it’s in employment practices, supplier diversity, employee resource groups, or other areas.