Danielle Flores

What does “Racially Discriminatory DEI Activities” actually mean? The administration’s own filing offers some clarity. Executive Order 14398, which we discussed here, required federal contractors to include specific contractual language agreeing that they will not engage in “racially discriminatory DEI activities.” Prior to this executive action, the administration’s positions had lacked clarity or a roadmap for compliance.

Key Takeaways Executive Order 14398 narrows the administration’s focus to race- and ethnicity-based DEI practices but expands contractor risk through mandatory contract clauses, reporting obligations, and a more robust enforcement framework. Although EO 14398 does not expressly state that it applies retroactively, federal contractors should expect it to affect existing contracts quickly as agencies begin adding the required clause, and contractors begin flowing it down to subcontractors.

The U.S. Department of Labor's Wage and Hour Division (DOL or Department) recently published a notice of proposed rulemaking (NPRM) that would rescind the Biden-era rule governing employee versus independent contractor classification...