Labor & Employment Law Daily Wrap Up, FEDERAL REGULATIONS—Labor Department finalizes rule rescinding Executive Order 11246 regulations, (Aug 20, 2026)

By Brandi O. Brown, J.D.

The Labor Department has formally dismantled the regulatory framework behind Executive Order 11246, ending decades of federal contractor affirmative action requirements after concluding parts of the program lacked legal and constitutional support.

The U.S. Department of Labor has finalized a rule rescinding regulations that implemented Executive Order 11246, thus ending a federal contractor compliance framework that for decades has required affirmative action programs and prohibited certain forms of employment discrimination among government contractors.

The final rule, scheduled for publication in the Federal Register on August 21, 2026, follows President Trump’s January 2025 issuance of Executive Order 14173, which revoked Executive Order 11246 and directed the government to end federal contractor affirmative action requirements. The rule becomes effective October 26, 2026.

Executive Order 11246, originally issued in 1965, prohibited federal contractors from discriminating based on race, color, religion, sex, and national origin and required covered contractors to take affirmative action to ensure equal employment opportunity. Over time, the order was expanded to include protections involving sexual orientation, gender identity, and compensation transparency.

Constitutionality in question. The Labor Department said the revocation of the executive order provides sufficient legal grounds for rescinding regulations found in 41 CFR Parts 60-1, 60-2, 60-3, 60-4, 60-20, 60-40, 60-50, and 60-999. Officials also argued that portions of the affirmative action framework raise constitutional concerns and lack statutory authorization. They argue that the race-based affirmative action regulations are unconstitutional, failing strict scrutiny review, and that the sex-based affirmative action regulations are “likely” unconstitutional as well. They also argue that OFCCP’s race-based and sex-based affirmative action regulations conflict with Title VII of the Civil Rights Act of 1964 because they require contractors to address underutilization of minorities and women, but not other groups. They also claim that the affirmative action regulations conflict with Title VI and that there is a lack of statutory authority for the department to maintain the regulations implementing E.O. 11246. The agency also questioned whether the Federal Property and Administrative Services Act, commonly known as the Procurement Act, provided authority for many aspects of the regulatory framework.

Comments. The department received 917 public comments on the proposed rule. Supporters of the rescission argued that the regulations imposed costly compliance obligations and pressured contractors to consider race and sex in employment decisions. Opponents contended that affirmative action requirements helped identify workplace barriers and improve employment opportunities for historically underrepresented groups.

The rule eliminates regulations governing compliance reviews, affirmative action plan requirements, construction participation goals, and several related recordkeeping and reporting obligations. It also rescinds provisions implementing the Uniform Guidelines on Employee Selection Procedures as they existed within the Executive Order 11246 regulatory framework.

Although the regulations are being rescinded, the department noted that federal contractors remain subject to federal, state and local anti-discrimination laws, including Title VII of the Civil Rights Act. The agency also pointed to Executive Orders 14173 and 14398, which direct federal agencies to enforce anti-discrimination requirements through the procurement process.

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