Legal Alert

President Trump Utilizes Executive Power to Issue Order Addressing Race and Sex Stereotyping

by the Labor and Employment Group
September 24, 2020

On September 22, 2020, President Trump issued an Executive Order on Combatting Race and Sex Stereotyping. It prohibits federal contractors from certain anti-bias employee training practices in order to “promote economy and efficiency in Federal contracting, to promote unity in the Federal workforce, and to combat offensive and anti-American race and sex stereotyping and scapegoating.” The Order comes amidst a nationwide call for more inclusive practices in all aspects of business.

The Order states, as its purpose, the desire to address the "destructive" and "malign ideology" 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.” As an example, the Order cites to a recent Department of Treasury seminar promoting the notion that “virtually all White people, regardless of how ‘woke’ they are, contribute to racism.” According to the Order, this kind of “blame-focused” diversity training reinforces biases and decreases opportunities for minorities. 

The Order cites to diversity, equity and inclusion (DEI) training materials from federal organizations such as Argonne National Laboratories, Sandia National Laboratories, and the Smithsonian Institution museum that identify systemic racism in our culture, describing them as “contrary to the fundamental premises underpinning our republic” and used to “perpetuate racial stereotypes and division.”

New Federal Contracting Requirements

Under the Order, federal contractors are prohibited from crafting training materials that engage in such race or sex stereotyping or scapegoating, or risk losing their federal contracts and facing further sanctions. For contractors, the Order applies to contracts signed 60 days after the date of the Order. 

Section 4 of the Order, “Requirements for Government Contractors,” requires government contracts to include provisions mandating that the contractor is prohibited from using any workplace training that “inculcates” in the contractor’s employees any form of “race or sex stereotyping” or “race or sex scapegoating.” This provision then lists so-called “divisive concepts” that cannot be included in workplace training, including DEI training: 

  • one race or sex is inherently superior to another race or sex;
  • the United States is fundamentally racist or sexist;
  • an individual, by virtue of his or her race or sex, is inherently racist, sexist, or oppressive, whether consciously or unconsciously;
  • an individual should be discriminated against or receive adverse treatment solely or partly because of his or her 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 his or her race or sex;
  • 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;
  • any individual should feel discomfort, guilt, anguish, or any other form of psychological distress on account of his or her race or sex; or
  • 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 breadth of these “divisive concepts” raises questions about whether workplace training can address such issues as unconscious bias, systemic racism or sexism, and micro-aggressions—concepts that many employers have included in training programs in recent years. 

Moreover, the Order directs the Department of Justice (DOJ) to assess whether workplace training that teaches these “divisive concepts” contributes to a hostile work environment under Title VII and, if appropriate, to issue guidance with the Equal Employment Opportunity Commission (EEOC) to assist employers in better promoting diversity and inclusive workplaces consistent with Title VII. 

Federal contractors additionally have to notify their labor unions that they intend to comply with the Order and post copies of the notice in conspicuous places available to employees and applicants. In addition, contractors must include these provisions in subcontracts and purchase orders, unless exempted. 

Oversight, Compliance, and Sanctions

President Trump also empowered the Department of Labor, through the Office of Federal Contract Compliance Programs (OFCCP), which is the agency that enforces affirmative action laws, to establish a hotline and investigate complaints that federal contractors may be using anti-bias training programs prohibited by the Order.

The Order further empowers the OFCCP to publish in the Federal Register a request for information, seeking information from contractors and subcontractors regarding the workplace training provided to employees, including specifically copies of the training programs (diversity and inclusion training is specifically mentioned), along with the duration, frequency, and expense of such training activities. 

If a contractor fails to comply, the Order provides for the following range of sanctions: (a) cancellation, termination, or suspension, in whole or in part, of the contract; (b) a declaration that the contractor is ineligible for further government contracts; and/or (c) such other sanctions as may be invoked under the OFCCP’s authority pursuant to Executive Order 11246. This last category includes publication of contractor names that failed to comply; DOJ seeking an injunction for “substantial or material violations”; litigation by the EEOC or DOJ; and, if false information has been furnished to the government, criminal proceedings. 

Federal Grantees

Federal agency heads are directed to “review their respective grant programs and identify programs for which the agency may, as a condition of receiving such a grant, require the recipient to certify that it will not use Federal funds to promote the concepts” delineated above.  Agency heads must compile and submit to the Office of Management and Budget a list of all grants for which the agency will require the certification within 60 days. Agency officials who do not comply with the order will be subject to “performance-based adverse action[s]” by the Director of the Office of Professional Management.

Effective Date

While the Order is effectively immediately, the key provisions that impact federal contractors will only be applicable to contracts signed after November 22, 2020—60 days after the date of the Order. As a result, contractors that intend to continue to do business with the government have 60 days to revamp their workplace training programs and to post and send the required notice to their labor unions.

Implications for Federal Contractors

While the Order does permit contractors to promote “racial, cultural, or ethnic diversity or inclusiveness, provided such efforts are consistent with the requirements of this order,” it nonetheless represents a significant departure from the current national discussion around DEI efforts.  Federal contractors who already have spent time and resources responding to that call could be required to revamp employee anti-bias training that touches on the “divisive concepts,” or risk losing their government contracts or worse, face sanctions or other discipline from OFCCP.

The Upshot

  1. The Order’s mandates will require federal contractors to review their DEI programs to eliminate “offensive and anti-American race and sex stereotyping and scapegoating” and ensure compliance to avoid a broad range of sanctions.
  2. The key provisions impacting federal contractors will apply to contracts signed after November 22, 2020.
  3. Contractors intending to continue to do business with the federal government should immediately review their workplace training programs, and, where applicable, post and send the requisite notice to their labor unions.

Attorneys in Ballard Spahr’s Labor and Employment Group regularly advise and represent public and private employers on anti-discrimination and compliance issues, including keeping clients informed of pending and current legislation and legal trends.  The Diversity and Inclusion Counseling Team also advises employers in a range of industries on the development, enhancement, and implementation of their DE&I programs. Contact any member of those Groups for more information. The Housing Group regularly works with HUD grantees and recipients of HUD funds, and advises them on a range of issues related to the Fair Housing Act and nondiscrimination requirements.

Copyright © 2020 by Ballard Spahr LLP.
(No claim to original U.S. government material.)

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This alert is a periodic publication of Ballard Spahr LLP and is intended to notify recipients of new developments in the law. It should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own attorney concerning your situation and specific legal questions you have.

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