On September 22, 2020, President Trump signed an Executive Order (EO) seeking to end what is characterized in the Order as "training sessions based on race and sex stereotyping and scapegoating" in the federal workforce, the Uniformed Services, and among federal contractors. The EO provides that it will be the policy of the United States "not to promote race or sex stereotyping or scapegoating" in the federal workforce and the Uniformed Services, and not to let grant funds to be used for these purposes.
All federal contracts, subcontracts and grant recipients that are not exempt from Executive Order 11246 (which implements equal opportunity and affirmative action requirements) will be subject to the Order. Although the EO was effective immediately, its specific requirements for federal contractors apply only to those with federal contracts entered into 60 days after the date of the order, which will be November 21, 2020.
The Order defines “divisive concepts” as perceptions or ideas that:
(1) one race or sex is inherently superior to another race or sex;
(2) the United States is fundamentally racist or sexist.
(3) an individual, by virtue of his or her race or sex, is inherently racist, sexist, or oppressive, whether consciously or unconsciously;
(4) an individual should be discriminated against or receive adverse treatment solely or partly because of his or her race or sex;
(5) members of one race or sex cannot and should not attempt to treat others without respect to race or sex;
(6) an individual’s moral character is necessarily determined by his or her race or sex;
(7) 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;
(8) any individual should feel discomfort, guilt, anguish, or any other form of psychological distress on account of his or her race or sex; or
(9) 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 term ‘‘divisive concepts’’ also includes any other form of race or sex stereotyping or scapegoating. The EO defines ‘‘race or sex stereotyping’’ as “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.” Likewise, ‘‘race or sex scapegoating’’ is defined as “assigning fault, blame, or bias to a race or sex, or to members of a race or sex because of their race or sex. It similarly 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 others.” The EO prohibits contractors from using any workplace training that attempts to indoctrinate such “divisive concepts.”
The EO directs all government contracting agencies to include, among other things, specific language in every government contract that the contractor "shall not use any workplace training that inculcates in its employees any form of race or sex stereotyping or any form of race or sex scapegoating, including the concepts" that are specifically delineated in the EO as "divisive." Beginning on November 21, 2020, contractors are required to include the provisions set forth in paragraphs (1)-(4) of Section 4 of the EO in every subcontract or purchase order, unless exempted by rules, regulations, or orders of the DOL Secretary. Accordingly, contractors should immediately evaluate the requirements and prohibitions under the EO and plan ahead in order to implement the necessary changes within their procurement organizations.
Contractors are also required to send a notice to each labor union or representative of workers under collective bargaining agreement or other contract, a notice, advising them of the contractor’s commitments under the EO. Furthermore, covered contractors are required to post in conspicuous places available to employees and applicants a copy of such notice.
There are serious consequences for noncompliance with the EO. Indeed, the contracts of contractors that do not comply with the EO may be canceled, terminated, or suspended in whole or in part, and the contractor may be declared ineligible for further for government contracts.
The Order further directs the Department of Labor (DOL) through the Office of Federal Contract Compliance Programs (OFCCP), to establish a hotline and investigate any complaints received under both this order as well as Executive Order 11246 alleging that a Federal contractor is utilizing such training programs in violation of the contractor’s obligations under those orders.
OFCCP is also directed under the EO to publish a request for information (RFI) in the Federal Register seeking information from Federal contractors, Federal subcontractors, and employees of Federal contractors and subcontractors regarding the current training and workshops they provide to employees related to diversity and inclusion, how often such training is provided and the costs of same. It is unclear what the OFCCP will do with its collection of this data. Moreover, it is unclear how the FAR Council, which is responsible for implementing changes to the Federal Acquisition Regulation, will address this issue. The EO requires the federal agency that contracted with a contractor that provided training that teaches, advocates or promotes the divisive concepts to evaluate whether to pursue debarment.
Several entities within the business community have already expressed concerns over the impact of the EO. In an October 15, 2020 letter to the President (and copied to Labor Secretary Eugene Scalia), the U.S. Chamber of Commerce and a coalition of similar state and local organizations, as well as other business groups, outlined their concerns as follows: "As currently written, we believe the E.O. will create confusion and uncertainty, lead to non-meritorious investigations, and hinder the ability of employers to implement critical programs to promote diversity and combat discrimination in the workplace," the business coalition wrote. "We urge you to withdraw the Executive Order and work with the business and nonprofit communities on an approach that would support appropriate workplace training programs." One of the specific concerns identified by the business coalition is one we are already hearing from our clients as well - that the EO "leaves considerable ambiguity as to what content would not be permitted in diversity and inclusiveness (D&I) training.”
As we all recognize, there is often a subjective element as to how training content is perceived by different individuals. "Because the ultimate threat of debarment is a possible consequence, we have heard from some companies that they are suspending all D&I training," which is "contrary to the E.O.’s stated purpose, but an understandable reaction given companies’ lack of clear guidance," the coalition letter states. "Thus, the E.O. is already having a broadly chilling effect on legitimate and valuable D&I training companies use to foster inclusive workplaces, help with talent recruitment, and remain competitive in a country with a wide range of different cultures."
The business coalition letter also addresses concerns about the use of the federal procurement and contracting process to address issues unrelated to goods or services being purchased by the government. "Such an approach effectively creates two sets of rules, one for those companies that do business with the government and another for those that do not," the business coalition said.
Even though the date upon which contractors are required to include the new language in their contracts is still a month away, it has been reported that the Office of Federal Contract Compliance Programs (OFCCP) has begun to scrutinize corporate diversity measures. According to the OFCCP, training programs prohibited by the new Executive Order may also violate a contractor’s obligations under existing Executive Order 11246, which prohibits discrimination based on race, color, religion, sex, sexual orientation, gender identity, national origin. Along these lines, Microsoft recently responded to questions from the OFCCP regarding some of its purported commitments, such as doubling the number of Black and African American people managers, senior individual contributors, and senior leaders in its U.S. workforce by 2025. The OFCCP challenged this commitment as potential unlawful discrimination based on race in violation of Title VII. Microsoft’s Corporate Vice President and General Counsel, Dev Stahlkopf, responded that they “have every confidence that Microsoft’s diversity initiative complies fully with all U.S. employment laws… [and] look forward to providing the OFCCP with this information and, if necessary, defending our approach." Microsoft emphatically denies that their diversity practices are discriminatory. Rather, Stahlkopf further stated, “[w]e also have affirmative obligations as a company that serves the federal government to continue to increase the diversity of our workforce, and we take those obligations very seriously. We have decades of experience and know full well how to appropriately create opportunities for people without taking away opportunities from others. Furthermore, we know that we need to focus on creating more opportunity, including through specific programs designed to cast a wide net for talent for whom we can provide careers with Microsoft."
Redstone GCI has a team of consultants with extensive experience assisting contractors with subcontract administration and the processes and procedures that Prime contractors should employ and document associated with their subcontractors. We also have a team of HR experts who assist contractors through EEO compliance, OFCCP audits and development of training programs consistent with the new Executive Order, as well as all EEO laws, including affirmative action obligations under Executive Order 11246.
Our team is tracking the changes related to this new Order and is available to discuss any potential issues or concerns facing your organization as it relates to these compliance areas.
A full copy of the Order may be viewed here: https://www.whitehouse.gov/presidential-actions/executive-order-combating-race-sex-stereotyping/.
