White House Issues Executive Order Combating Race and Sex Stereotyping

On September 22, 2020, the White House issued Executive Order 13950 (“Order”), entitled “Executive Order on Combating Race and Sex Stereotyping,” that imposes serious new obligations on federal contractors and grant holders regarding the content of their diversity and inclusion training. Executive Order 13950 follows an executive memorandum issued by the White House on September 4, 2020, that directed executive branch agencies to end trainings on topics such as “critical race theory” and “white privilege.”

The Order, effective immediately, aims to prevent federal executive departments and agencies (“Agencies”), the Uniformed Services, federal government contractors, and federal grant recipients from promoting and perpetuating what it defines as “race or sex stereotyping,” “race or sex scapegoating,” and other “divisive concepts” in their workplace trainings. Specifically, the Order seeks to prohibit those institutions from using any workplace training that “inculcates in its employees” the following “Divisive Concepts”:

• That one race or sex is inherently superior to another;
• That the United States is fundamentally racist or sexist;
• That a person’s race or sex makes the person inherently racist, sexist, or oppressive;
• That a person should be discriminated against because of their 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 race or sex dictates their moral character;
• That an individual, because of race or sex, bears responsibility for actions committed in the past by other members of the individual’s race or sex;
• That an individual should feel discomfort, guilt, anguish, or some other type of psychological distress because of their race or sex;
• That meritocracy or traits such as a hard work ethic are racist or sexist constructs created by a particular race to oppress another race; and
• Race or sex stereotyping or scapegoating.

“Race or sex stereotyping,” under the Order means 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.

“Race or sex scapegoating,” under the Order, means assigning fault, blame, or bias to a race or sex, or to members of a race or sex because of their race or sex and encompasses any claim that, consciously or unconsciously, and by virtue of his or her race or sex, members of any race are inherently racist or are inherently inclined to oppress others, or that members of a sex are inherently sexist or inclined to oppress members of the other.

According to the Order, trainings that promote the divisive concepts perpetuate racial stereotypes and division and should not be supported by federal taxpayer dollars. 

The Order imposes the following requirements on federal contractors and federal grant recipients.

Federal Contractors

First, government contractors that are not otherwise exempted from the nondiscrimination and equal employment opportunity requirements of Executive Order 11246 may not use any workplace training that “inculcates” in any of its employees any form of race or sex stereotyping, any form of race or sex scapegoating, or any of the other “divisive concepts” noted above. Examples of contracts exempt from compliance with Executive Order 11246 include contracts involving less than $10,000, contracts where the work is performed outside of the United States, and contracts with state or local governments, as well as contractor facilities that are separate and distinct from contractor activities related to the performance of the contract. 

Notably, the Order purports to apply to all of a federal contractor’s employees (unless otherwise exempt under Executive Order 11246), and not just those working on a federal contract. While the Order does not specifically limit its enforcement to contractor employees working in the United States, based on judicial precedent, there may be an argument that the Order extends to U.S. citizens working abroad for a U.S. government contractor, but not as to non-U.S. citizens working abroad. The Order also does not exempt contracts for Commercial Items or Commercial Off-the-Shelf Items, which are frequently exempted from other government contracting regulations. Furthermore, it raises a question as to how a contractor will know that it has inculcated any employees with any of the “divisive concepts.”

Unless otherwise exempted, Government contracting agencies must insert a prescribed clause into new government contracts entered into 60 days after the date of the Order, or as of November 21, 2020, requiring the contractor to agree that it (1) will not use any workplace training to instill divisive concepts in the training of any of its employees; (2) will send a notice to each labor union or representative with which it has a collective bargaining relationship advising the labor union or representative of their commitments under the Order (3) will include language in each of its subcontract(s)/purchase order(s) regarding their rights and performance commitments under the Order as well as the penalty for noncompliance; and (4) will face contract termination, suspension, and/or other penalty or sanction (up to and including debarment) for failure to comply the above listed contract provisions or rules, regulations or orders promulgated in furtherance of the Order

The Order also directs the Department of Labor Office of Federal Contract Compliance Programs (OFCCP), within 30 days of the Order, to publish in the Federal Register a request for information from all federal contractors, subcontractors, and their employees, regarding the training, workshops, or similar programming provided to employees. The Order specifically states that the RFI should request copies of any training, workshop, or employee programming that relates to diversity and inclusion, along with information on the duration, frequency and expense of such activities.

Significantly, the Order does not seek to retroactively amend existing federal government contracts signed before November 21, 2020. However, should a contractor seek a modification or extension of an existing government contract or subcontract as of November 21, 2020, the change might trigger obligations under the Order.

Despite the foregoing, the Order states that nothing within it “shall be construed to prohibit discussing, as part of a larger course of academic instruction, the divisive concepts listed [above] in an objective manner and without endorsement.” As such, contractors may retain discussion of the above-listed concepts in existing training materials so long as they are presented neutrally and without any indication that the contractor endorses them.

The Order tasks the OFCCP with monitoring compliance with the Order, establishing a hotline for employees and employers with questions, and investigating any complaints of noncompliance.

As of September 28, 2020, the new OFCCP Complaint Hotline to Combat Race and Sex Stereotyping is active by telephone at 202-343-2008 or via email at OFCCPComplaintHotline@dol.gov.

Federal Grant Recipients

Federal grant holders must certify, as a condition of receiving federal funds, that they will not use the funds to promote divisive concepts in training. All Agency heads must identify and submit to the Director of the Office of Management and Budget (OMB) a list of all grant programs that must complete the necessary certification.

Takeaways

The Order likely contributes to existing tensions between federal contracting laws that prohibit discrimination on the basis of race and sex and other requirements, such as mandatory state law training, affirmative action, and small business subcontracting requirements, that may require favorable treatment in certain cases based on race or sex. The Order does nothing to reduce or eliminate the risk to government contractors arising from these conflicting requirements. Accordingly, institutions should seek counsel on how to maintain compliance with the Order and all other applicable training, EEO, and affirmative action requirements. 

The Order states that the Attorney General and the Equal Employment Opportunity Commission shall issue guidance to assist employers in better promoting diversity and inclusive workplaces consistent with Title VII. Additional guidance may also be issued by the Department of Labor, the OMB, and the OPM.

In the meantime, government contractors may wish to seek further legal review of all diversity and inclusion training materials used. Doing so will allow counsel to reassess whether those training materials create any new risk of legal exposure and provide counsel with an opportunity to make any necessary modifications to bring the materials into compliance. Specifically, counsel may wish to include a disclaimer in training materials that tracks the language of the Order to make clear the materials are intended to comply with the Order. Additionally, counsel may wish to include a training acknowledgement form confirming that Order-compliant training has been provided. The acknowledgement form may be helpful in defending potential whistleblower claims raised by employees who report alleged training violations to the Department of Labor, another area of potential concern for contractors. Acknowledgement forms may be signed by employees electronically so long as the contractor retains the electronic record.

It is unclear whether and when the Agencies tasked with enforcing the Order will initiate a rulemaking process to promulgate regulations implementing the Order. And, in the event that there is a change in administration following the election, it is unclear whether they will be able to complete that process before January 2021 or if a new incoming administration will rescind the Order entirely.

We will continue to monitor developments in this area.