Ex-Regulator Warns HR About 'Whole of Government' Crackdown on DEI

Employers around the U.S. should pay attention to what's happening at the Office of Federal Contract Compliance Programs if they want to stay on the right track when it comes to unlawful inclusion and diversity (I&D) practices, the office's immediate past director said Oct. 27 at SHRM BLUEPRINT 2025 (BLUEPRINT 2025) in Louisville, Ky. 

That goes for all employers, not just federal contractors, said Catherine Eschbach, who stepped down as director of the OFCCP in late September. She took over the office in March, after President Donald Trump issued executive orders (EOs) targeting DEI and removing the requirement for federal contractors to have affirmative action programs that had been established by EO 11246, "Expanding Equal Opportunity."

Eschbach spoke with SHRM Chief of Staff, Head of Government Affairs, and Corporate Secretary Emily M. Dickens, J.D., about why the OFCCP's work is relevant to employers beyond federal contractors. 

Implications Beyond Federal Work

Any organization that receives federal payments or funding in any capacity, including grants, should prepare for scrutiny of their inclusion and diversity (I&D) efforts — and not just from the regulators they're used to dealing with. 

Webinar: Diving Deeper into Affirmative Action and Federal Contractor Compliance

The implications of Trump's EO 14173, “Ending Illegal Discrimination and Restoring Merit-Based Opportunity," go far beyond the OFCCP. The order ushered in a "whole of government approach to ending the use of unlawful DEI," Eschbach said. In practice, that means agencies beyond just the U.S. Equal Employment Opportunity Commission and the Department of Justice will be looking for "illegal DEI practices" — any agencies that approve mergers, grant licenses, or enforce the False Claims Act. 

"Regulatory authorities that you are not used to dealing with as HR professionals may now be scrutinizing your HR practices, and you need to make sure you're compliant with civil rights laws," Eschbach said.

What's Next for OFCCP, Compliance?

The OFCCP is in the midst of three rulemakings that will officially rescind the contractor affirmative action rules from EO 11246; make significant changes to enforcement of Section 503 of the Rehabilitation Act of 1973 related to employing people with disabilities; and make small adjustments to the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA), which codifies contractor rules around employing military veterans. 

The Trump administration has proposed eliminating the OFCCP in its 2026-2027 budget, but whether that happens is the purview of Congress, Eschbach said. If the OFCCP remains, she expects that it could implement self-audit programs similar to those the Department of Labor has rolled out at the Occupational Safety and Health Administration and other agencies. This would allow contractors to self-audit compliance with VEVRAA and Section 503.  

"These are really designed to help you, as companies, minimize regulatory violations and come into compliance without imposing additional regulatory burdens on you," Eschbach said.  

Webinar: Navigating Title VII Compliance amid Recent DEI Policy Changes

Contractors Should Re-Evaluate Existing Programs

Given that the government no longer requires contractors to have affirmative action plans based on race or sex, Eschbach recommended that all federal contractors rethink those programs — if they still have them — and calibrate their risk.

"If it's not being done for affirmative action purposes, does this make sense legally? As a business? Is this something that's going to unify your business?" she said. "Is this something that you would do if you didn't have a regulatory requirement?"

For contractors with programs that were particularly comprehensive — for example, if they included placement goals — sunsetting them will be necessary, she added. "If you had especially robust affirmative action programs or mingled affirmative action with DEI, those will require a lot more wind-down than a contractor who does pretty bare-bones, formulaic affirmative action," she said.

Eschbach also suggested that everyone should put a renewed focus on Section 503 and VEVRAA compliance, given that enforcement of those statutes will be the OFCCP's main effort, at least for now. 

Be Mindful of Your Data

Many employers still collect demographic data — which is not unlawful — but how that data is applied is another issue to which Eschbach suggested employers pay attention. "That data … should be pretty narrowly used within your legal department or HR department," she said. "I would be very careful about sharing it with business managers or even DEI teams." 

That's because best practices dictate that the data should be used to ensure that there is no discrimination taking place — not to make individual hiring decisions. The more people that have access to the data, the more likely it is that someone could cross a line. 

"The moment you start using that data for more than just in the very narrow circumstance of making sure we don't have discriminatory practices, you start opening yourself up to compliance risk," she said. 

Toolkit: Implementing Legally Compliant Inclusion and Diversity Strategies

Widen Your Pool of Advisors

Eschbach urged HR professionals to seek out input from fresh voices beyond the attorneys or consultants they have used in the past. 

"If you're a contractor, are you still getting advice from those who told you some of these questionable practices fell on the right side of the legal line?" she said.

She pointed to SHRM's efforts to include critics of DEI at BLUEPRINT 2025. 

"The voices that you are inviting here to the table are ones that this administration is listening to in terms of how it's shaping its enforcement perspectives," she said. "Even if you don't like what I had to say today or don't like what others have had to say, if you want to be an HR leader that is staying ahead and managing risk, you would do well to listen to them."