On September 22, 2020, President Trump issued an Executive Order on Combating Race and Sex Stereotyping (“Executive Order”), following a September 4, 2020 White House memorandum criticizing federal agencies for having “divisive, un-American” training sessions on “critical race theory,” “white privilege,” and other training teaching individuals that the US or any race or ethnicity is inherently racist. The September 4 memorandum instructed federal agencies to cease the funding of any training that fit the description.

The September 22 Executive Order brings federal contractors into the fold, prohibiting them from using any workplace training during the performance of a government contract that inculcates in their employees certain “divisive concepts,” and requiring them to carry those imperatives down to their subcontractors and vendors. Though the Executive Order was “effective immediately” as of September 22, the requirements for contractors affect federal prime contracts entered into on or after November 21, 2020, leaving some time for federal contractors to prepare-or watch as expected legal challenges to the Executive Order play out.

Despite the uncertainty surrounding the Executive Order, federal contractors can take steps to prepare in case the Executive Order applies come November. Here’s what federal contractors need to know now.

What kind of training does the Executive Order prohibit government contractors from providing for their employees?

It’s not clear. The Executive Order requires federal contractors to include in every government contract a provision certifying that during the performance of the contract, the contractor agrees not use any workplace training that inculcates in its employees any “race or sex stereotyping” (ascribing character traits, values, moral and ethical codes, privileges, status, or beliefs to a race or sex, or to an individual because of his or her race or sex) or “race or sex scapegoating” (assigning fault, blame, or bias to a race or sex, or to members of a race or sex because of their race or sex), including the “divisive concepts” (as defined in the Executive Order) that:

(a) one race or sex is inherently superior to another race or sex;

(b) an individual, by virtue of his or her race or sex, is inherently racist, sexist, or oppressive, whether consciously or unconsciously;

(c) an individual should be discriminated against or receive adverse treatment solely or partly because of his or her race or sex;

(d) members of one race or sex cannot and should not attempt to treat others without respect to race or sex;

(e) an individual’s moral character is necessarily determined by his or her race or sex;

(f) 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;

(g) any individual should feel discomfort, guilt, anguish, or any other form of psychological distress on account of his or her race or sex; or

(h) meritocracy or traits such as a hard work ethic are racist or sexist, or were created by a particular race to oppress another race.

The Executive Order expressly states it cannot be construed to prevent contractors from promoting racial, cultural, or ethnic diversity or inclusiveness, as long as the efforts follow the Executive Order. Therefore, though the Executive Order is unclear in many respects, it does not appear that D&I or sensitivity training as a whole is banned, as long as the concepts addressed are not specifically prohibited by the Executive Order.

That said, one particular “divisive concept” and the ban against “race or sex scapegoating” appear to be particularly problematic and could lead to several federal contractors modifying their D&I training if the Executive Order is implemented.

  • The “divisive concept” that “members of one race or sex cannot and should not attempt to treat others without respect to race or sex” could make training on unconscious bias illegal. If a workplace training addresses unconscious bias (with the goal of helping individuals become aware of their own biases and then providing guidance for individuals to work to mitigate them), this “divisive concept” appears to heavily impede that discussion. This appears to contradict Title VII’s protections, as well as eviscerate one of the important purposes of workplace D&I trainings or any training discussing or referencing unconscious bias.
  • Similarly, the ban against “race or sex scapegoating” appears particularly problematic because it is extremely vague. For instance, an examination in a workplace training of the “pyramid effect”-where a member of one sex or race tends to hire members of the same sex or race based on comfort level, with the hiring practices repeating themselves and leading to an overwhelmingly homogenous workforce-may or may not be assigning bias “to members of a race or sex because of their race or sex.”

The Executive Order specifically states it does not prohibit discussing, “as part of a larger course of academic instruction,” the “divisive concepts” in an objective manner and without endorsement, but there is no guidance defining “a larger course of academic instruction”-making it difficult to tell whether and to what degree the use of a “divisive concept” in a workplace D&I training may or may not be a violation.

New Obligations and Potential Penalties

The Executive Order also requires the contractor to:

  • Send a notice, to be provided by the agency contracting officer, to each labor union or workers’ representative with which he has a collective bargaining agreement or other contract or understanding, advising of the contractor’s commitments under the Executive Order.
  • Post copies of the notice in conspicuous places available to employees and applicants for employment.
  • Include the contract provisions in every subcontract or purchase order so that the provisions are binding upon each subcontractor or vendor.

If the contractor fails to comply with the contract provisions, the contract may be canceled, terminated, or suspended in whole or in part and the contractor may be declared ineligible for further Government contracts, and subject to other sanctions under Executive Order 11246 (Equal Employment Opportunity), and applicable rules or regulations.

The Executive Order directs the DOL, through the Office of Federal Contract Compliance Programs (OFCCP), to establish a hotline and investigate complaints alleging that a federal contractor is utilizing training programs in violation of the contractor’s obligation under the Executive Order (and Executive Order 11246). The Executive Order also cloaks the DOL with the ability to take “appropriate enforcement action” and to “provide remedial relief, as appropriate.”

In addition, within 30 days of the date of the Executive Order (or by October 22, 2020), the Director of the OFCCP must publish a request for information in the Federal Register seeking information from federal contractors, federal subcontractors, and employees of federal contractors and subcontractors regarding the training, workshops, or similar programming provided to employees. The Executive Order specifies the request for information should request copies of any “training, workshop, or similar programing having to do with diversity and inclusion as well as information about the duration, frequency, and expense of such activities.”

The Executive Order provides that the Attorney General should continue to assess the extent to which workplace training that teaches the “divisive concepts” may contribute to a hostile work environment and give rise to potential liability under Title VII of the Civil Rights Act of 1964. The Executive Order also tasks the Attorney General and the EEOC with issuing publicly available guidance to assist employers in better promoting diversity and inclusive workplaces consistent with Title VII, if appropriate.

What should federal contractors be doing now?

If implemented, the Executive Order would only apply to those federal prime contracts entered on or after November 21, 2020, and any subcontractors or vendors under those contracts. However, federal contractors should take these steps now to be prepared in case the Executive Order is implemented:

  • Inventory all upcoming federal contracts and subcontracts that may be slated for November 21, 2020 or later. If the Executive Order is implemented, those contracts and subcontracts will need to include the contract language required by the Executive Order.
  • Review any D&I training programs to be provided to workers under those contracts slated for November 21, 2020 or after to have an idea of the type and substance of D&I training programs offered. Federal contractors should determine if any amendments would need to be made to comply with the Executive Order, and make internal determinations regarding whether and how the company will comply.
  • Consider whether the company must comply with other federal or state and local requirements that may conflict with the Executive Order, and if conflicts arise, seek legal advice to determine next steps.
  • In addition, inventory federal grants. Under the Executive Order, the heads of federal agencies are required to review their respective grant programs and identify programs for which the agency may, as a condition of receiving the grant, require the recipient to certify that it will not use federal funds to promote “divisive concepts.” If the Executive Order is implemented and a company is a federal grant recipient, the company may have to certify that it is not using grant monies to promote “divisive concepts.” The heads of agencies are required to submit a report of those federal grant recipients to the Director of the Office of Management and Budget (OMB) within 60 days of the date of the Executive Order (or November 21, 2020).
  • Given the OFCCP hotline and mandated OFCCP requests for information, companies may wish to prepare for investigation and audits by the OFCCP.

Of course, the upcoming presidential election could determine the fate of the application of the Executive Order to federal contractors. If Democratic candidate Joe Biden wins the election, the Executive Order will likely be rescinded. In addition, even prior to the election, constitutional challenges and challenges based on conflicts with civil rights laws (including Title VII) are expected. Federal contractors should stay up to date on these developments. For more information on this and other employment related questions, contact your Baker McKenzie employment attorney.