In recent weeks, the federal government has increased its attention on diversity and inclusion initiatives undertaken by federal contractors. First, President Trump issued an Executive Order (EO) that appears—on its face—to prohibit implicit and unconscious bias trainings. Then the Department of Labor (DOL) opened a new hotline to receive complaints regarding discrimination by federal contractors. Since opening the hotline just days ago, the DOL has already commenced investigations into multiple federal contractors’ diversity initiatives, and not only trainings addressed by the EO.

The idea that federal contractors cannot discriminate is nothing new. Under EO 11246—issued in 1965—federal contractors must agree not to discriminate and to take affirmative action to ensure equal employment opportunities. But President Trump’s September 22, 2020, EO, titled “On Combating Race and Sex Stereotyping,” takes direct aim at diversity and inclusion trainings, citing concerns that federal contractors are using such trainings to teach that “men and members of certain races, as well as our most venerable institutions, are inherently sexist and racist.” Under the EO, federal contractors are prohibited from using “any workplace training that inculcates in its employees any form of race or sex-stereotyping or any form of race or sex scapegoating.” Of course, such trainings were unlawful before the EO.

However, the EO has broad language throughout that suggests the Administration will take a wider view of the EO’s reach. The DOL’s newly released FAQs support this view, and federal contractors will have to approach topics such as implicit bias and institutional racism or sexism very carefully to stay in compliance.

The EO’s specific contract requirements only apply to contracts entered into on or after November 21, 2020, but employers are already feeling some immediate effects. According to the FAQs, the DOL actively seeks reports related to federal contractors’ implicit bias and inclusion training even if the new EO does not apply to them. This is where the DOL is using EO 11246 to investigate claims.

The DOL is not limiting its attention to workplace trainings, though. It is also investigating companies who have announced affirmative action and other initiatives to improve diversity within their ranks. Microsoft, for example, revealed that it is being investigated by the DOL following its June 2020 commitment to increase representation of African Americans in its leadership positions. The Administration is apparently taking the position that such efforts may violate Title VII, which suggests it may expand its attention beyond federal contractors when analyzing trainings and other diversity initiatives. (Microsoft, by the way, emphatically denies that its initiative constitutes unlawful race-based discrimination.)

So what can a company do?

• Explain how you will use non-discriminatory means to achieve your diversity goals (by focusing on retention, for example). Share the message repeatedly, internally and externally.
• Approach diversity initiatives and trainings carefully. Diversity and EEO training materials should all be reviewed in light of the Administration’s current position.
• Make sure your legal team and Diversity and Inclusion professionals are in constant communication about efforts to ensure compliance.
• Assume that Diversity and Inclusion efforts may come under close scrutiny, so be prepared to “show your work” to a government investigator.