Executive Order Substantially Impacts Federal Contractors’ Workplace Diversity Training

Fox Rothschild LLP

Fox Rothschild LLP

President Donald Trump signed an “Executive Order on Combatting Race and Sex Stereotyping” on September 22, 2020, significantly limiting diversity and inclusion training that federal contractors and grant recipients currently provide to their employees. The order imposes new requirements on contractors and empowers the Office of Federal Contract Compliance Programs (OFCCP) to investigate and enforce those requirements.

Banned Training Concepts

Contractors are prohibited from using workplace training materials that include any form of “divisive concepts,” race or sex stereotyping, or race or sex scapegoating. The order defines “divisive concepts” as follows:

"(1) one race or sex is inherently superior to another; (2) the United States is fundamentally racist or sexist; (3) whether consciously or unconsciously, an individual is inherently racist, sexist, or oppressive by virtue of their race or sex; (4) a person should be discriminated against or receive adverse treatment because of their race or sex; (5) members of a race or sex cannot and should not attempt to treat others without respect to race or sex; (6) a person’s moral character is determined by their race or sex; (7) an individual’s race or sex is responsible for actions committed in the past by other members that race or sex; (8) a person should feel discomfort, guilt, anguish, or any other form of psychological distress on account of their race or sex; or (9) meritocracy or certain traits like “hard work” are racist or sexist, or were created by a particular race to oppress another."

The order provides several examples of material that are within the scope of “divisive concepts:”

  • “[E]ncouraging employees to avoid ‘narratives’ that Americans should ‘be more color-blind’ or ‘let people’s skills and personalities be what differentiate them.’”
  • “[R]acism is ‘interwoven into every fabric of America’ and […] ‘color blindness’ and ‘meritocracy’ are ‘actions of bias.’”
  • “[E]mphasis on ‘rationality over emotionality’ [are] a characteristic of ‘white males,’” and asking non-minority males to “‘acknowledge’ their ‘privilege’ to each other.”
  • “‘Objective, rational linear thinking,’ ‘hard work;’ being ‘the key to success,’ the ‘nuclear family,’ and belief in a single god are not values that unite Americans of all races but are instead ‘aspects and assumptions of whiteness.’” Or “facing your whiteness is hard and can result in feelings of guilt, sadness, confusion, defensiveness, or fear.”

The Order’s Requirements and Impact on Federal Contractors

In addition to banning the use of “divisive concepts” in workplace trainings, contractors are required to do the following:

  • Unless exempted, contractors must bind all subcontractors and vendors to the order by including the training requirements and restrictions in all subcontract agreements and purchase orders entered into after November 21, 2020 as may be directed by the Secretary of Labor to enforce these provisions including sanctions for noncompliance;
  • Send notices, provided by contracting agencies, of the contractor’s obligations under the order to each of their labor unions or representatives of workers with which collective bargaining agreement or other contract or understanding exist; and
  • Post copies of the notice of the contractor’s obligation under the order in conspicuous places available to employees and applicants for employment.

Contractors that fail to comply with these requirements may have their federal contracts cancelled, terminated or suspended; declared ineligible for further government contracts; or otherwise sanctioned. Failure to comply with these requirements may also expose contractors to employee-related legal risk as the order instructs the Attorney General to assess the extent to which workplace training materials that teach “divisive concepts” may contribute to a hostile work environment and give rise to potential liability under Title VII.

The order further instructs all heads of agencies to immediately review their current grant programs and identify programs that the agency, as a condition of receiving such grant, may require a recipient to certify that it will not use federal funds to promote the “divisive concepts.” Each head of a federal agency must submit a report to the director of Management and Budget (OMB), listing all grant programs identified under the order, on November 21, 2020.

OFCCP Enforcement

The order instructs the OFCCP to establish a hotline to report workplace training materials that violate the order’s requirements and Executive Order 11246 and investigate such violations. The OFCCP will also request information from contractors, subcontractors and their employees regarding the training, workshops or other similar programming related to diversity and inclusion provided to employees by October 22, 2020. Such information includes copies of any training, workshop or similar programing materials as well as information regarding duration, frequency and expenses of such activities.

Takeaway for Contractors

While the order does not explicitly ban promoting racial, cultural or ethnic diversity, or inclusiveness, the terms of the order severely restrict a contractor’s discretion in providing diversity and inclusion, sexual harassment and other equal opportunity trainings to its employees. These restrictions will likely impact the legal exposure to employers, as some of the restricted training materials are required under existing federal and state laws. Contractors, subcontractors and their vendors should remain vigilant to all legal developments and carefully review any ongoing or planned diversity and inclusion trainings, contracts, or services to ensure compliance with the federal and state requirements.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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