Diversity Training: New executive order causes potential confusion

As many companies all over the world focus on improving their diversity and inclusion efforts, some doing business in the United States may need to alter their diversity and inclusion training programs after the U.S. President issued an executive order targeting such programs.

The “Executive Order on Combating Race and Sex Stereotyping,” issued on September 22, 2020, prohibits federal agencies, companies with federal contracts and recipients of federal grants from offering workplace training that promotes race or sex stereotyping or scapegoating. The Order prohibits training that promotes any of the following concepts:

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

Seeking clarity

With little guidance on how the federal government will interpret and apply the Order, the training restrictions mentioned above may lead to confusion for many companies with federal contracts. This is the first time the U.S. government has attempted to regulate the content of contractors’ diversity training programs.

To add to the confusion, the director of the Office of Management and Budget released a memo advising federal agencies to review training materials that contained the terms “critical race theory,” “white privilege,” “intersectionality,” “systemic racism,” “positionality,” “racial humility” and “unconscious bias.” Since the Executive Order doesn’t specifically prohibit these terms, contractors may be uncertain whether their training would be considered noncompliant if it does so much as mention one or more of these concepts.

Likewise, the U.S. Department of Labor has started investigating companies with federal contracts that have pledged specific numerical goals to increase diversity. The Department asserts that such goals may be a form of unlawful discrimination, even though federal rules have previously encouraged companies to set diverse hiring targets. These investigations, along with the government’s scrutiny of diversity training programs, will likely leave some contractors perplexed about how to proceed with their diversity initiatives.

Navigating diversity training

Contractors may find some clarity in the limited guidance available from the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP), which has published a Frequently Asked Questions (FAQs) page on the Executive Order. This FAQs page states that the Order will apply to contracts entered into on November 21, 2020 and beyond, but it also cautions all federal contractors that failure to offer a diversity training program that complies with the Order may lead to the agency investigating the contractor for claims of sex and race stereotyping. The OFCCP has also set up a hotline for employees to report violations by phone or email.

The OFCCP’s guidance further notes that the Order does not outright ban unconscious or implicit bias training. It is only prohibited if it “teaches or implies that an individual, by virtue of their race, sex and/or national origin, is racist, sexist, oppressive or biased, whether consciously or unconsciously.” Training programs may still cover the concepts of unconscious or implicit bias if the training program is “designed to inform workers, or foster discussion, about pre-conceptions, opinions or stereotypes that people — regardless of their race or sex — may have regarding people who are different, which could influence a worker’s conduct or speech and be perceived by others as offensive.”

Even with the OFCCP’s insight, more guidance is needed on how the federal government will implement and enforce the Order. Given the severity of the consequences for failing to comply, federal contractors will likely suspend diversity training if there is any chance that their training program does not adhere to the parameters set forth in the Order. Contractors that violate the Order risk cancellation, suspension or termination of their federal contracts, and debarment from future contracts.

On October 15, 2020, more than 150 business and nonprofit groups sent a letter to the White House asking the President to withdraw the Order because it “will create confusion and uncertainty.” They wrote that it has a “chilling effect on legitimate and valuable diversity and inclusion training” and hinders “the ability of employers to implement critical programs to promote diversity and combat discrimination in the workplace.”

While the Order remains in effect, it’s important to note that the new requirements do not prohibit contractors from offering diversity and inclusion training. Companies with federal contracts may continue to offer such training, but they should first review their training materials for any prohibited content and revise the training as necessary. If the training discusses issues of unconscious or implicit bias, contractors should make sure those topics are addressed in a way that complies with the Order.

Written by:

Thomson Reuters Regulatory Intelligence and Compliance Learning

Thomson Reuters Regulatory Intelligence and Compliance Learning on:

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