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In her recent remarks, the former OFCCP director said Catherine Eschbach emphasized that the compliance environment for federal contractors is currently undergoing profound change
Executive Order 14173, “Ending Unlawful Discrimination and Restoring Merit-Based Opportunity.” She explained that this order establishes a “Whole-of-government approach” to identify and eliminate unlawful DEI practices, meaning oversight no longer rests solely with the OFCCP. Instead, Agencies Companies that award grants, approve mergers and licensing, or enforce the False Claims Act will also examine employers' inclusion and diversity programs to ensure they are not straying into unacceptable territory.
For decades, federal contractors underperformed
Executive Order 11246which required affirmative action programs and race- or gender-specific placement goals. EO 14173 removes this framework and shifts the government's focus to a strictly merit-based system prohibits preferential treatment based on race, color or gender. Instead, OFCCP focuses its enforcement priorities on other laws in particular Section 503 of the Rehabilitation Actthat covers people with disabilities, and the
Vietnam Era Veterans Adjustment Assistance Act (VEVRAA)which regulates the employment of protected veterans.
Eschbach urged contractors to use this transitional moment to re-evaluate legacy programs that once combined affirmative action and DEI initiatives. She advised employers to ask themselves whether such programs make sense legal, ethical or strategic in today's environment and to pay close attention to how population and employment data is collected and used. Demographic data can still be collected for compliance monitoringBut she warned that using such information to influence hiring or promotion decisions could expose companies to legal risks.
Eventually, Eschbach recommended these organizations Look for new compliance perspectives. She noted that the government is listening to critics of race- and gender-based employment practices and urged human resources leaders to remain informed and adaptable, even when feedback challenges established norms.
From a legal and regulatory perspective, EO 14173 changes the fundamentals of contractor compliance:
- It revokes previous implementing regulations tied to federal affirmative action mandates for contractors, including EO 11246.
- It requires certification that contractors will comply with all federal anti-discrimination laws and, in complying with these regulations, will not operate DEI programs that violate these laws
material on payment decisionsunder the False Claims Act (FCA). - It upholds core commitments to non-discrimination
Title VIIThe ADAand the
ADEAto ensure that Equal opportunities remain a legal requirementeven without affirmative action plans. - It's already at the door Litigation on constitutional grounds as courts evaluate the scope and enforceability of its certification provisions.
- And finally this OFCCP Guide Confirms the Agency's shift away from the affirmative action mandates of EO 11246 toward enforcement of Section 503 and VEVRAA.
Taken together, Eschbach's findings and these legal changes create a new compliance horizon that focuses on performance, data discipline and proactive risk management rather than numerical targets or race and gender-based targets.
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