On Tuesday evening, the Trump administration surprised the federal contracting community by issuing an Executive Order (“EO”) titled “Combating Race and Sex Stereotyping” that will ban federal contractors from conducting certain types of anti-discrimination training. In particular, the EO prohibits workplace racial sensitivity and diversity and inclusion (“D&I”) training programs that contain so-called “divisive content,” defined in the EO as instilling a belief in the existence of systemic racism and inherent bias. The EO expands an earlier ban issued in a September 4, 2020, memorandum that prohibits certain anti-discrimination training from being conducted within federal agencies.

The EO comes on the heels of a widespread social and racial justice movement that dominated much of the summer of 2020, in response to which corporate America has taken a stand, with companies pledging millions to social justice reform movements. An overwhelming number of employers either have offered or plan to offer some form of diversity training to their employees. This latest EO leaves many federal contractors and subcontractors wondering whether and how to proceed, and what penalties they may face if they offer such training.

What Does the EO Prohibit?

The EO does not ban all diversity or racial sensitivity training per se. The prohibition targets training that “inculcates in its employees any form of race or sex stereotyping or any form of race or sex scapegoating,” and that advances so-called “divisive concepts,” which are defined as the following:

• that one race or sex is inherently superior to another race or sex;
• that an individual, by virtue of his or her race or sex, is inherently racist, sexist, or oppressive, whether consciously or unconsciously;
• that an individual should be discriminated against or receive adverse treatment solely or partly because of his or her race or sex;
• that members of one race or sex cannot and should not attempt to treat others without respect to race or sex;
• that an individual’s moral character is necessarily determined by his or her race or sex;
• that an individual, by virtue of his or her race or sex, bears responsibility for actions committed in the past by other members of the same race or sex;
• that any individual should feel discomfort, guilt, anguish, or any other form of psychological distress on account of his or her race or sex; or
• that meritocracy or traits such as a hard work ethic are racist or sexist, or were created by a particular race to oppress another race.

According to the Trump administration, the above concepts are “rooted in the pernicious and false belief that America is an irredeemably racist and sexist country; that some people, simply on account of their race or sex, are oppressors; and that racial and sexual identities are more important than our common status as human beings and Americans.” Additionally, the EO states “…training like that discussed above perpetuates racial stereotypes and division and can use subtle coercive pressure to ensure conformity of viewpoint. Such ideas may be fashionable in the academy, but they have no place in programs and activities supported by Federal taxpayer dollars.”

In practical terms, the EO appears to target and prohibit training that acknowledges or discusses the existence of concepts such as implicit bias, systemic racism, white privilege, and male privilege. These concepts are often discussed in racial sensitivity and diversity training programs.

How Will the EO’s Prohibition Apply to Federal Contractors?

The EO requires federal agencies to insert a contract clause into federal contracts prohibiting the contractor from engaging in diversity training that includes the so-called “divisive concepts.” The training ban will apply at an organizational level to all federal contractors that have contracts issued on or after November 21, 2020.

Prime contractors will be required to flow down the clause to all lower-tier subcontractors and suppliers.

What Are the Penalties or Enforcement Risks for Non-Compliance?

The EO seeks to impose severe penalties for noncompliance—the potential for contract termination and a directive that the federal agency “shall evaluate whether to pursue debarment of that contractor, consistent with applicable law and regulations, and in consultation with the Interagency Suspension and Debarment Committee.”

Early indications suggest the distinct possibility of more aggressive enforcement, as the Air Force Times recently reported that the Air Force is looking for contracts under which contractors are providing training that includes concepts of white privilege and critical race theory, in order to cancel or defund such contracts.

Does the EO Apply to Federal Grantees?

The EO applies to grants by requiring federal agencies to identify grants under which it would be appropriate to require grantees to certify that they are not using federal funds to promote the so-called “divisive concepts,” and to identify such grant programs to the Office of Management and Budget within 60 days.

What Practical Steps Should Federal Contractors Take?

1. 1. 1. Do Not Reflexively Cancel All of Your Workplace Anti-discrimination and Diversity Training. Remember, the EO does not prohibit all diversity training. And government contractors remain subject to existing laws and regulations prohibiting discrimination and promoting equal opportunity and affirmative action. As a guidepost, consider the guidance that the EO provides to federal agencies: “The fair and equal treatment of individuals is an inviolable principle that must be maintained in the Federal workplace. Agencies should continue all training that will foster a workplace that is respectful of all employees.” Indeed, some workplace training may be required by law, such as anti-discrimination and harassment training. Finally, this EO was issued in an election season, and will surely be subject to immediate legal challenge. Continue to monitor for updates and responses.
      2. Evaluate Your Written Training Materials. Given the potential consequences at stake, contractors may wish to evaluate their current written and demonstrative training materials and pause the distribution or use of training materials that reference concepts such as white privilege, critical race theory, and systemic racism during the period the EO is in effect (and newly developed training materials and content should, for the time being, avoid addressing these concepts).
      3. Consider Creative Alternatives. Contractors that wish to assist their employees in learning more about issues of race might consider referring employees to publicly available resources that interested employees can opt to peruse on their own time. For instance, the DC Public Library maintains a reading list for those seeking books about racial issues. The Smithsonian’s National Museum of African-American History and Culture recently launched an online portal that “provides digital tools, online exercises, video instructions, scholarly articles and more than 100 multi-media resources tailored for educators, parents and caregivers—and individuals committed to racial equality.” Companies that have already committed to the widespread social justice reform movement may need to temporarily change the titles and stated agendas of internal D&I committees and sponsored programs.
      4. Consult with Legal Counsel. The EO leaves plenty of room for uncertainty. Accordingly, and given the potential penalties at issue, it is advisable to consult with government contracts and employment counsel should you have any questions about your company’s workplace training programs and diversity initiatives.