Week in Review: Whiplash Over Federal Funding, Changes in Agency Leadership, New EEOC Priorities, and New K-12 Executive Order
It is no secret that whenever there is a change in the Oval Office it is common for the incoming administration to implement quick and widespread changes to effectuate campaign promises. Indeed, in modern times, newly elected presidents often speak to their actions “within the first 100 days in office” to highlight their promises to the nation. The first weeks of President Trump’s second term are shaping up to follow this trend, with President Trump issuing Executive Orders and taking executive action at a rapid clip.
Given the rate at which the Trump administration is issuing such orders, it can be difficult to keep up with new developments. Here, we highlight the important actions from this past week and the potential challenges they may face ahead.
The Week in Brief:
Whiplash Over Federal Funding: On Monday, January 27, 2025, the Trump administration’s Office of Management and Budget ordered a freeze on federal grants and loans. On Tuesday, a federal judge temporarily blocked that order. By Wednesday afternoon, the Trump administration rescinded the order altogether.
New Agency Leadership: On Monday, President Trump the National Labor Relations Board (“NLRB”) General Counsel Jennifer Abruzzo. He also fired Democratic Board member Gwynne Wilcox. Later that evening, Trump also fired two Democratic Commissioners, Jocelyn Samuels and Charlotte Burrows, at the U.S. Equal Employment Opportunity Commission (“EEOC”).
EEOC Changes Course on Gender Protections: On Tuesday, January 28, 2025, the EEOC released a statement entitled Removing Gender Ideology and Restoring the EEOC’s Role of Protecting Women in the Workplace. In that statement, the EEOC announced that, pursuant to President Trump’s Executive Order 14166, the EEOC would remove all materials promoting gender ideology that do not comport with the President’s proclamation that the U.S. government recognizes only two sexes: male and female. (Further discussion on this proclamation available here). The EEOC further stated that it would “defend the biological and binary reality of sex and related rights.”
New Executive Order on K-12 Education: On Wednesday, January 29, 2025, the President issued an Executive Order entitled Ending Radical Indoctrination in K-12 Schooling. The Executive Order directs the Department of Education to begin planning to remove federal funding from K-12 schools where funds are used to support “gender ideology” or “discriminatory equity ideology.” The Executive Order also directs coordination with state and local officials to take actions against teachers and school officials who “facilitate the social transition of a minor student.”
Franczek Insights:
- Whiplash Over Federal Funding
On Monday, January 27, 2025, the Federal Office of Management and Budget (“OMB”), under the direction of the Office of the President, issued a memorandum in which it ordered all federal agencies to temporarily pause disbursements of any financial assistance, grants, or loans that may run contrary to President Trump’s recent Executive Orders. In relevant part, the memorandum stated:
“[E]ach agency must complete a comprehensive analysis of all of their Federal financial assistance programs to identify programs, projects, and activities that may be implicated by any of the President’s executive orders. In the interim, to the extent permissible under applicable law, Federal agencies must temporarily pause all activities related to obligation or disbursement of all Federal financial assistance, and other relevant agency activities that may be implicated by the executive orders, including, but not limited to, financial assistance for foreign aid, nongovernmental organizations, DEI, woke gender ideology, and the green new deal.”
The potential impact of the memorandum weighed particularly heavily on states and educational institutions that routinely rely on funding from the federal government. For example, higher education institutions were informed that financial aid, including PELL grants, could be on hold. And K-12 school districts across the country worried about federal funding, particularly funding under Title I and the Individuals with Disabilities Education Act (“IDEA”).
The memorandum was almost immediately challenged in court by non-profit organizations, such as the National Council of Nonprofits and the American Public Health Association. They argued that the memorandum impermissibly withheld money that Congress had already appropriated. Attorneys General of 23 states, including Illinois, also challenged the funding pause on similar grounds. In response, on Tuesday, January 28, 2025, Judge Loren L. AliKhan of the District Court for the District of Columbia entered an injunction that halted implementation of the memorandum pending further review.
Then, on January 29, 2025, the OMB summarily rescinded the directive in a two-sentence memorandum that stated:
“OMB Memorandum M-25-13 is rescinded. If you have questions about implementing the President’s Executive Orders, please contact your agency General Counsel.”
Consequently, for now, it does not appear the planned funding pause will take effect. Recipients of federal funding, including educational institutions, should continue to receive federal assistance as anticipated. However, we will continue to watch for developments in this area and keep you updated as they occur.
- New Agency Leadership
We previously reported on the changes to the NLRB leadership. Our detailed analysis, including how these changes may impact employers, can be found here.
In addition to removing NLRB General Counsel Jennifer Abruzzo and NLRB Board member Gwynne Wilcox, President Trump also removed two Democratic Commissioners at the EEOC – Jocelyn Samuels and Charlotte Burrows. By way of brief background, EEOC Commissioners are appointed by the President and confirmed by the U.S. Senate for staggered five-year terms. And, according to Title VII of the Civil Rights Act of 1964, which the EEOC enforces, “not more than three [Commissioners] shall be members of the same political party.”
Ms. Samuels was initially appointed by President Trump during his first term in office. She was serving in her second term, which was set to end in July 2026, when President Trump removed her. Meanwhile, Ms. Burrows was appointed to the EEOC in 2015 by former President Barack Obama. Her tenure lasted through the Obama, Trump (first), and Biden administrations. During that time, she served as Commission Chair from January 20, 2021, through January 19, 2025. Her term on the Commission was not set to expire until July 2028.
The move will likely alter the composition of the EEOC, which would have retained a Democratic majority until the end of Ms. Samuels’s term in 2026, absent her removal. Two Commissioners remain: (i) Commissioner Andrea R. Lucas, who President Trump designated as acting Chair, and (ii) Commissioner Kalpana Kotagal, who was appointed by President Biden and is currently serving a term that is set to expire in July 2027. With the two vacancies previously held by Democratic Commissioners, President Trump can now appoint Republican Commissioners to take their place. As reported further in the next section, this will allow President Trump and the EEOC to implement policy changes that comport to President Trump’s initiatives.
It is unprecedented for a president to remove a sitting EEOC Commissioner before the expiration of their term without identified cause. Although the law is technically silent on the process or grounds for removing a Commissioner, it has been historically understood that such individuals cannot be removed from their post absent “cause.” As such, Commissioners have historically served even after changes in presidential administrations. The decision to remove these two Commissioners will most likely face legal challenges.
- EEOC Changes Course on Gender Protections
On January 28, 2025, Acting Chair of the EEOC, Andrea Lucas, issued a statement on the Commission’s views related to gender identity. The statement highlighted recent actions the EEOC has taken to “return” the agency to “its mission protecting women from sexual harassment and sex-based discrimination in the workplace by rolling back the Biden administration’s gender identity agenda.”
Through this statement, Acting Chair Lucas announced that the EEOC will focus on enforcing laws governing sex-based rights, protections, opportunities, and accommodations “to protect men and women as biologically distinct sexes.” To date, and pursuant to President Trump’s Executive Order regarding sex-based classifications that we discussed in an alert available here, Lucas has directed the agency to remove the EEOC’s “pronoun app” and the use of the “X” gender marker and “Mx” prefix option on intake process forms for filing a charge of discrimination with the agency. Lucas has also said that the EEOC will rescind guidance that “effectively eliminated single-sex workplace facilities.” This is likely in reference to EEOC guidance that advised employers to permit employees to use facilities that best match their gender identity. With this statement, Lucas has made clear that the EEOC will rescind this guidance.
As discussed above, due to President Trump’s decision to remove two Democratic Commissioners at the EEOC, only Acting Chair Lucas and Democratic Commissioner Kalpana Kotagal currently remain on the five-member Commission, depriving the EEOC of a voting quorum to make substantive changes. Recognizing her limited authority as Acting Chair of the EEOC, Lucas noted that she does not have the authority to unilaterally remove or modify certain guidelines that were previously issued by the EEOC, including the EEOC’s Enforcement Guidance on Harassment in the Workplace (issue by a 3-2 vote in 2023); the EEOC Strategic Plan 2022-2026 (issued by a 3-2 vote in 2023); and the EEOC Strategic Enforcement Plan Fiscal Years 2024-2028 (issued by a 3-2 vote in 2023). Although Lucas cannot unilaterally rescind the guidance and strategic plans, Lucas’s statement previews the Commission’s likely intention to rescind EEOC’s Enforcement Guidance on Harassment in the Workplace and the agency’s strategic plans once the EEOC has a voting quorum.
Notwithstanding Lucas’ statement, implementing such changes will likely face significant challenges. Most significantly, the U.S. Supreme Court has already held, in Bostock v. Clayton County, that Title VII’s prohibition on sex discrimination and sex harassment extends to discrimination and harassment based on sexual orientation and gender identity. Guidance from the EEOC to the contrary would contradict currently established Supreme Court precedent. Further, Illinois and other states across the country have their own laws, such as the Illinois Human Rights Act, which prohibit discrimination and harassment based on sexual orientation and gender identity, which would not be subject to the EEOC’s guidance, but which could be subject to challenge to the extent that they are deemed to conflict with federal law.
Despite the potential forthcoming changes at the EEOC regarding sexual orientation and gender identity, complaints of discriminatory treatment based on these protected classes should still be investigated and addressed. We encourage employers to continue to consult with their legal counsel regarding ongoing obligations to respond to such complaints, consistent with applicable law.
- Executive Order on K-12 Education
On Wednesday, January 29, 2025, the President issued an executive order to address what he described as “imprinting anti-American, subversive, harmful, and false ideologies on our Nation’s children.” The order builds on the directives regarding “Gender Ideology” and adds a definition of a second ideology: “Discriminatory equity ideology” defined as “an ideology that treats individuals as members of preferred or disfavored groups, rather than as individuals, and minimizes agency, merit, and capability in favor of immoral generalizations.”
The Executive Order directs federal agencies to formulate plans to prevent or rescind federal funding to K-12 schools for any support of gender ideology or discriminatory equity ideology. The plans must also include processes for preventing or rescinding federal funding to K-12 schools for supporting students in “social transition,” which the Order defines as “the process of adopting a ‘gender identity’ or ‘gender marker’ that differs from a person’s sex.” The Order goes on to explain the “social transition” process may include counseling or treatment by school counselors, modifying a student’s name or pronouns, calling a student “nonbinary”, allowing use of bathrooms or locker rooms in accordance with a student’s gender identity as opposed to “sex,” and/or allowing participation in athletics or extracurriculars specifically designated for a certain sex.
In addition, the Executive Order directs the Attorney General to coordinate with State attorneys general and local district attorneys to “file appropriate actions” against K-12 teachers and school officials who facilitate in the “social transition” of a student, sexually exploit minors, or practice medicine unlawfully. The Order also calls for the creation of the 1776 Commission, which will be organized and funded by the U.S. Department of Education, to “promote patriotic education,” and requires all schools receiving federal funding to hold an educational program on the U.S. Constitution on September 17 of each year.
Notably, with respect to the directives on creating plans for federal funding, the Order only requires federal agencies to provide proposed plans that align with the requirements of the Order within the next 90 days. Therefore, no actual action has been taken at this time with respect to rescinding federal funds for the activities outlined in the Order. However, the directive to coordinate with State agencies to take appropriate action against K-12 teachers and school officials who facilitate a student’s “social transition” appears to be in effect immediately.
At the State level, the Illinois Human Rights Act still protects individuals from discrimination and harassment based on gender identity and sexual orientation. This means that educational institutions in Illinois are still required to investigate and address complaints of discriminatory treatment based on gender identity and sexual orientation. In addition, the Illinois School Code requires units of instruction studying the events of Black history and requires U.S. history instruction to include the role and contributions of “ethnic groups” and “lesbian, gay, bisexual, and transgender people” in America, among other topics. Absent legal challenge or additional guidance, it remains unclear how Illinois State law provisions will interact with the mandates in this Executive Order and any actions taken to enforce it. We recommend consulting with legal counsel regarding your obligations under State and federal law and will continue to closely monitor any plans that are released regarding federal funding in response to this Order.