Developments in Labor and Employment Law from the President’s First Month

By Haseeb Fatmi 

As of February 23, 2025, President Donald Trump has signed 70 executive orders [1] and issued several other decisions and memoranda introducing significant changes to existing employment law and policy. As an example, President Trump’s second Executive Order, signed on his first day in office, revoked 78 prior actions and orders covering a range of topics including foreign policy, the economy, voting rights, and criminal justice.

Many of these policies deal directly with labor and employment law, including developments on the federal workforce, DEI programs, labor and collective bargaining, and private sector employers. These changes have sparked both legal challenges and widespread debate over their potential impact on employees, businesses, and government operations. Below is a summary of some of the significant developments pertinent to labor and employment practitioners.

Unions and Collective Bargaining

President Trump removed National Labor Relations Board (“NLRB”) member Gwynne Wilcox, resulting in the Board lacking its required three-member quorum, meaning the NLRB can no longer adjudicate cases or issue decisions.

The National Labor Relations Act (“NLRA”) remains in full effect, and employers are still responsible for complying with existing labor and employment law. Additionally, day-to-day NLRB operations should continue without being largely affected through its regional offices. However, certain NLRB actions are currently halted, including appeals and requests for review, Section 10(j) injunctions on significant matters, review of contested representation elections, and enforcing or challenging subpoenas. Moreover, some employers have challenged unionization efforts, arguing that the NLRB can no longer certify election results based on its lack of quorum.

On January 31, 2025, President Trump also released an Executive Memorandum[2] nullifying collective bargaining agreements that were finalized with federal agencies in the last 30 days of the Biden administration. The legal status and validity of those union contracts remains uncertain.

In February, NLRB Acting General Counsel William Cowen issued a memorandum rescinding several enforcement guidance documents issued during the Biden administration, including:

• Workplace Surveillance and AI Tools, which highlighted concerns that employers’ use of surveillance programs and artificial intelligence could impede workers’ rights under the NLRA.
• Noncompete Agreements, which addressed potential NLRA violations arising from noncompete clauses, suggesting they might unlawfully restrict employees’ rights.
• “Make-Whole Relief” for Employees, a 2024 directive that instructed staff to pursue comprehensive remedies for employees affected by unfair labor practices.
• Student Athletes as Employees, a 2021 memorandum that stated that certain NCAA student athletes should be recognized as employees under the NLRA, granting them associated labor rights.

These rescissions indicate a potential reevaluation of decisions made during former NLRB General Counsel Jennifer Abruzzo’s tenure; however, the board’s capacity to implement changes may be stymied by its lack of a quorum.

Gender Identity and Sexual Orientation

On January 20, 2025, President Trump issued Executive Order 14168, Defending Women From Gender Ideology Extremism and Restoring Biological Truth to the Federal Government,[3] mandating that all federal agencies only recognize two genders, male and female, and that the federal government will no longer recognize nonbinary gender classifications.

This Order directly contradicts the EEOC’s April 2024 guidance, which expanded workplace harassment definitions to include misgendering, as well as barriers to restroom access for transgender individuals. In response to this Executive Order, EEOC Acting Chair Andrea R. Lucas announced that the EEOC would be rolling back prior EEOC guidance related to issues of gender identity discrimination and harassment, as well as on sexual orientation.[4]  She stated that she opposed the position that Title VII includes protections from “denial of access to bathroom or other sex-segregated facility consistent with [an] individual’s gender identity” and the “repeated and intentional use of a name or pronoun inconsistent with [an] individual’s known gender identity.”

On February 15, 2025, the EEOC moved to voluntarily withdraw and dismiss six pending lawsuits concerning gender identity discrimination it had brought during the Biden administration. The dismissed cases involve allegations of discrimination, sexual and non-sexual harassment, physical and verbal abuse, and wrongful termination of transgender and non-binary employees. These dismissals, coupled with the EEOC’s new guidance, indicate the EEOC’s intention to back away from certain enforcement efforts.

Federal Workforce Restructuring

One of the most sweeping changes has been the mass hiring freezes and terminations of federal employees. On January 20, 2025, President Donald Trump issued an executive order[5] implementing a hiring freeze for federal civilian employees within the executive branch. The order mandates that within 90 days, the Office of Management and Budget, in collaboration with the Director of the Office of Personnel Management and the Administrator of the U.S. Department of Government Efficiency, must present a plan to reduce the size of the federal workforce. Upon release of the plan, the hiring freeze will be lifted for all executive departments and agencies, except for the IRS.

On the same day, President Trump signed EO 14171, Restoring Accountability to Policy-Influencing Positions Within the Federal Workforce, to reclassify thousands of federal employees as “at-will” workers, making them easier to terminate. Also on the same day, President Trump issued an executive memorandum, Return to In-Person Work,[6] that direct all executive departments and agencies to terminate remote work arrangements and require employees to return to work in-person, which affects more than half of federal employees, according to a report from the U.S. Office of Personnel Management.

On February 11, 2025, President Trump signed EO 14210, Implementing the President’s “Department of Government Efficiency” Workforce Optimization Initiative, which, among other things, directs federal agencies to make large-scale personnel reductions and look for ways to eliminate or combine positions. The Order also restricts agencies’ ability to hire new employees, limiting agencies to hiring only one new worker for every four who are separated, with exceptions for positions involving immigration and law enforcement. Mass firings have already started at several agencies. Under the authority of EO 14210, DOGE emailed approximately 2.3 million federal employees, requiring them to report their weekly accomplishments or face potential termination.

DEI in the Federal Workforce

On January 20, 2025, President Trump issued Executive Order 14151, Ending Radical and Wasteful Government DEI Programs and Preferencing, which mandates the elimination of all Diversity, Equity, and Inclusion programs across the federal government.

The order abolishes positions such as Chief Diversity Officers, Equity Action Plans, environmental justice offices, and DEI-related grants and contracts. Additionally, the Office of Management and Budget (“OMB”) is required to compile detailed lists of all DEI positions, programs, and expenditures as of November 4, 2024, and assess any attempts to rebrand these functions. Additionally, the OMB will identify federal contractors and grantees involved in DEI training or funding since January 20, 2021.

OPM, in collaboration with the Attorney General, is tasked with reviewing and revising federal employment practices, union contracts, and training programs to remove DEI considerations. The order also directs the termination of “equity-related grants or contracts.” Additionally, Deputy heads of agencies are instructed to evaluate the impact and costs associated with existing DEI and environmental justice programs. The Assistant to the President for Domestic Policy will conduct monthly meetings with the OMB Director, OPM Director, and deputy agency heads to monitor progress, address compliance challenges, and identify areas requiring further presidential or legislative action to promote equal dignity and respect.

DEI in the Private Sector

On his second day in office, President Trump issued Executive Order 14173, Ending Illegal Discrimination and Restoring Merit-Based Opportunity, making significant changes to federal policy concerning DEI programs and initiatives among federal contractors. Notably, EO 14173 rescinds several earlier executive orders dating back to the passage of the Civil Rights Act of 1964.

For example, EO 14173 revokes Executive Order 11246, known as the Equal Employment Opportunity Order, which was signed by President Lyndon B. Johnson in 1965 and prohibited employment discrimination by federal contractors on the basis of color, race, religion, and national origin. In 1967, the Order was amended to include sex. The Order also required federal contractors to take affirmative action to promote equal opportunity and gave the Office of Federal Contract Compliance, under the U.S. Department of Labor, authority to oversee compliance with the Order. In revoking the Equal Employment Opportunity Order, EO 14173 directs the OFCCP to “immediately cease promoting diversity.”

Additionally, EO 14173 requires federal agencies to include a clause in contracts mandating that contractors adhere to certify the absence of “illegal DEI programs.”  Non-compliance could lead to liability under the False Claims Act. The Order also directs the Attorney General to submit a report identifying specific steps or measures to deter DEI programs and principles. The order also directs the review of private-sector DEI programs for potential “illegal” activities.

On January 24, 2025, Acting Secretary of Labor Vince Micone issued an order instructing all Department of Labor employees to halt investigative and enforcement activities related to the rescinded Executive Order 11246 and its associated regulations. This directive affects all department personnel, including those in the Office of Federal Contract Compliance Programs.

On February 5, 2025, OPM Acting Director Charles Ezell issued a memorandum to the heads of federal departments and agencies directing agencies to eliminate DEI offices, policies, programs, and practices that “unlawfully discriminate in any employment action” on the basis of “protected characteristics.” The memorandum extended DEI prohibition to candidate pools, explaining that agencies and departments seeking diversity in applications may also violate EO 14173.

Revisions to Labor Classifications and Independent Contractors

The Trump administration is also revisiting policies regarding the classification of workers as employees or independent contractors. In 2024, the Biden Administration issued a rule to impose stricter worker classification standards, similar to California’s Assembly Bill 5 (AB5), which reclassified many gig workers as employees. However, the current administration is backing away from defending the 2024 rule. The Department of Labor was slated to defend the 2024 rule in oral arguments before the Court of Appeals for the Fifth Circuit (Frisard’s Transportation, L.L.C. v. United States Department of Labor, Case No. 2:24-cv-00347), but secured a postponement to decide how to proceed. The Department of Labor is now due to provide the Court with a status report next month. This may signal less oversight in the future from the Department of Labor on independent contractor classifications.

Legal Challenges and Future

The policy changes and guidance stemming from the flurry of executive orders and memoranda have created a whirlwind of change and uncertainty. As quickly as employment law and policies have changed, many of those same changes have already faced significant legal opposition.

On February 3, 2025, a coalition of DEI advocates filed a lawsuit in the U.S. District Court for the District of Maryland. The plaintiffs argue that the ambiguous language of the orders creates uncertainty, potentially leading to discriminatory enforcement against individuals and organizations promoting lawful DEI efforts. On February 21, 2025, the Court temporarily stayed EO 14173 and EO 14171, holding in part that the Orders fail to “define any of the operative terms” such as “illegal DEI,” “equity-related,” or “illegal discrimination or preferences.”

Executive Order 14168 — recognizing only two genders — has also been met with legal challenges. Advocates for transgender rights argue that it undermines the recognition and rights of transgender and non-binary individuals, and the American Civil Liberties Union (ACLU) has expressed intentions to contest this Executive Order in court. Several states and municipalities are exploring measures to protect individuals within their jurisdictions, which includes enacting laws that affirm gender identity in areas such as health care, education, and public accommodations.

Additionally, the Trump Administration’s mass terminations have already been challenged. On February 20, 2025, several labor groups filed a lawsuit against the Trump administration, alleging the illegal termination of tens of thousands of probationary federal employees. On Friday, the U.S. District Court for the District of Columbia issued a 26-page ruling[7] holding that, while the union’s lawsuit on behalf of USAID employees could proceed, but declined to issue a preliminary injunction, thus allowing the terminations to proceed.

Regardless of the substance of the policies and laws, the rapid changes in the employment law landscape have brought and continue to bring uncertainty to employees and employers alike.