OutSolve has invited John C. Fox, Esq. as a guest blogger providing legal insights on EEO and compliance issues. The views expressed in his posts are his and do not reflect the viewpoint of OutSolve or its employees.
What do you lose if you no longer support your “Employment Discrimination Firewall”?
“Ensure.” “Firewall.” “Patience.” These are the three most important concepts in the now unfolding national discussion about what responsible corporations in the U.S. should do in the wake of President Trump’s revocation of President Johnson’s 1965 Executive Order 11246 (EO 11246). Want to know what your business should do? Click here now.
Johnson’s Executive Order had two sides: an affirmative action component that required the calculation of recruitment goals and a Title VII-like non-discrimination component, but with the added requirement that federal contractors “evaluate” their employment decisions to “ensure” no unlawful discrimination could occur. The Office of Federal Contract Compliance Programs (OFCCP) built out the “evaluation” component early in its history. However, highlighting the importance of this component of the Order, OFCCP ramped it up even further in 2000 via rulemaking 35 years after Johnson first penned EO 11246, which had turned out to be one of the most famous Presidential Executive Orders of any president.
Specifically, OFCCP’s 2000 Rules gave much more focused and detailed meaning to the second sentence of Section 202 of EO 11246, as amended. That section mandated two different things from covered federal Government contractors:
NOTE: While the proactive evaluation mandated in the second sentence quoted above from EO 11246 uses the term “affirmative action,” that term does NOT compel or even imply the utility of unlawful preferential employment decisions based on race, sex, color, or national origin. Rather, the first sentence enacted a nondiscrimination “prohibition” on contractor action based on a Protected Status, just like Title VII. But the Executive Order added to Title VII the new notion that contractors must also do something affirmative, something positive and active, to evaluate corporate employment decision making on an ongoing basis to “ensure” that unlawful discrimination does not occur and stop it before it starts.
So, What Is That Word “Ensure”?
This is what a company loses if it simply walks away from the revocation of EO 11246 with a sigh of relief. The contractor’s self evaluation of its employment decisions to “ensure” they are not unlawfully discriminatory is the “magic sauce” that has kept contractors out of comparatively worse employment trouble for the last 60 years. The “proof of that pudding” is that federal government contractors have successfully:
OFCCP discovered the first two above-listed phenomena in 1984, during the first Reagan term, when the agency sought to answer this fundamental business question: Does OFCCP and its Executive Order 11246 enforcement program make a difference?
To that end, OFCCP commissioned Labor Economist Jonathon Leonard from the Hahn Business School at the University of California to review the employment and promotion results of covered federal “Government contractors” compared to “employers” covered by Title VII but which were not federal contractors. Apart from the better hiring and promotion results Dr. Leonard found in his published National Bureau of Economic Research Working Paper No. w1310 between “Government contractors” and “employers,” the only two things that were different were:
“Ensure” is a little-used word in the English language. It is a verb. Thus, it is a lively word, a call to action. The word “ensure” demanded that federal contractors had to affirmatively do something rather than just play “defense” in response to Title VII charges of unlawful discrimination filed against a company. Rather, federal contractors had to actively go out on “offense” and:
Executive Order 11246 had spawned, for the first time in HR circles, the notion of “quality control” for HR. While manufacturing and operations managers in every other part of the business took quality control reviews and evaluations for granted in their corporate worlds, quality control evaluations for HR started in 1965 only by virtue of EO 11246.
PUNCHLINE: Most mature and responsible companies in the United States today have seen the wisdom of the Executive Order’s continuous quality control evaluations prompting. Most U.S. companies have chosen long ago to extend to and ingrain into their human resources and talent acquisition teams quality control protocols to evaluate at least their HR systems driving their hiring, promotions, involuntary terminations, and compensation decisions. (Transfers and demotions are recent welcome additions to that list of things to check in on.)
HR Nondiscrimination Firewalls: Experienced corporate managers who have survived an OFCCP, EEOC or private plaintiff class action discrimination lawsuit challenging a corporate employment system like hiring, pay or promotion know that it is suicide to not continuously have had quality control teams evaluating HR decision-making. Quality control reviews typically and routinely operate in every other department in a large and successful corporation.
Success does not occur by accident on a production line or in a professional office, or by merely thinking good thoughts. Nor does success happen in HR on its own without quality control checking. There is a reason companies build firewalls to protect not only against those outside bad actors who would threaten harm to the company but also to protect against employees who fail at their duties for whatever good, bad, or indifferent reason.
Most U.S. companies which were federal Government contractors or subcontractors previously covered by EO 11246, are now realizing that the quality control check evaluations they have been undertaking for decades pursuant to EO 11246 to “ensure” against unlawful discrimination have indeed become ingrained as “good HR” …so they are keeping the continuous monitoring HR evaluations to keep their “HR Nondiscrimination Firewalls” tall and sturdy.
NOTE: The EEOC last year set a new record for private sector company and state employer back pay collections totaling nearly half a billion dollars. By contrast, OFCCP collected only about $8 million in backpay from government contractors ($11 million if you believe OFCCP’s numbers) during that same period of time (FY 2024). Even multiplying OFCCP’s backpay figure by five to account for the difference in head count sizes between the two agencies (almost 500 employees at OFCCP and just over 2,500 employees work at the EEOC), the federal government contracting universe is a far tougher environment for federal discrimination law enforcers to find unlawful discrimination than among the general population of “employers” which are not federal contractors. Federal contractors and subcontractors crouch confidently behind their “HR Nondiscrimination Firewalls” they had built to “ensure” against discriminatory decision-making even as federal investigators and plaintiff lawyers pressure-test in audits and in investigations the companies’ HR systems.
Fun With Words: The word “ensure” comes from the Latin word “insecuare.” That word is in turn made up in Latin from the combination of the pre-fix “in” with the Latin word “securus” which meant that one was secure, or safe. So, ensure means to guarantee the safety of something. (I always knew that five years of Latin in junior high and high school would come in handy for something someday and pay off big (like this moment) other than to become an Episcopal or Catholic Priest! Oh boy, gratification at long last!)
So, what you lose with the revocation of Executive Order 11246, without “saving the baby from the bathwater you are throwing out,” is the army of HR compliance specialists from among the 25,000 formerly covered federal contractors or subcontractors and their compliance vendors who “ensure” their government contractor employers, customers, or clients are safe from unlawful discrimination claims.
If a company now chooses to walk away from its HR Nondiscrimination Firewall OFCCP’s audit pressure previously helped them see the wisdom to first build, what the company may now well be sacrificing, also, is several decades of HR and talent acquisition training and corporate documentation protocols which have long served the company well. Dismantling “Firewalls” is a serious business and should be done only after much careful thought and calculation looking at the issue from 360 degrees around the at-issue policy or practice.
SPOILER ALERT: In the national conversation going forward about the revocation of Executive Order 11246 and what to do now, most major corporations have thus far cautiously and tentatively decided to:
Here are a few recommendations on things your business can do today while we wait for further clarification and guidance from the federal government:
Patience is currently the third most important word as to U.S. employment policy at this time, joining “ensure” and “firewall.” Once Congress and the president successfully set the federal discretionary budget for FY2026 (starting October 1, 2026), including as to USDOL’s budget, if they do, policy direction will come into plain view.
In the meantime, look for USDOL’s “Semi-Annual Regulatory Agenda.” Each Regulatory Agenda sets out each subcomponent agency’s scheduled upcoming (for the next 6-months)regulatory proposals and final regulatory actions. USDOL usually publishes its “Spring Regulatory Agenda” between April and June. It would not surprise me if the USDOL Spring Regulatory Agenda published somewhere later in the date range this year. USDOL managers have yet to onboard, as noted above, and will have much to do, even apart from managing deep RIFs of unhappy federal employees.
Also, look for the coming “Budget Justifications” for their FY 2026 budgets each subcomponent agency within USDOL will soon develop. This is an annual sport with good entertainment value for taxpayers. The Secretary of Labor will publish her Budget Justifications for each subcomponent agency within USDOL all on the same day, probably by late Spring, TBD given that these are new kids on the block and the federal workforce is in transition and in a huff at this time. The Budget Justifications seek to justify the agency’s budget request by describing what programs and initiatives they will use the money to undertake in the upcoming Fiscal Year. Note: Fiscal Year FY 2026 will begin October 1, 2025.
Movie Tip: I highly recommend you condition and harden yourself for the coming FY2026 Budget Battles by streaming Russell Crow in his Academy Award winning role as Maximus in the 2001 movie Gladiator. The movie scenes captured in the Gladiator pits will give you exactly the right deep immersion into the last sport of Kings: federal budget battles
No need for a sextant: With the USDOL Spring Semi-Annual Regulatory Agenda and the agency Budget Justifications of interest in hand, the current mystery of USDOL’s compass heading will reveal itself.