On September 22, 2020, President Trump signed an order entitled Executive Order on Combating Race and Sex Stereotyping (EO), which includes requirements for government contractors when providing diversity and inclusion training. The order applies to contracts entered on or after November 21, 2020.
Under the EO, covered government contracts and subcontracts must include provisions that prohibit the use of any workplace training that teaches its employees any form of race or sex stereotyping or any form of race or sex scapegoating that includes divisive concepts.
The Director of the Office of Management and Budget (OMB) issued a Memorandum to the heads of Executive agencies and departments (M-20-37) providing additional insights into the EO. Significantly, the Memorandum identifies seven “keywords” including “unconscious bias” that may trigger further review of training materials.
Contractors must also conspicuously post, where it will be seen by employees and applicants for employment, a notice provided by the relevant agency contracting officer of the contractor’s commitments under this EO. Further, contractors must distribute this notice to each labor union or representative of workers with which the contractor has a collective bargaining or any other agreement.
It should be noted the EO may conflict with federal or state requirements to provide trainings on the topics of race and sex discrimination. Although the EO is likely to be subject to legal challenge, federal contractors, subcontractors and vendors, could be subject to the compliance requirements of the EO beginning November 21, 2020.
Potential penalties for non-compliance include that the contract may be canceled, terminated, or suspended, in whole or in part. Further, if violations are found, the contractor may be subject to agency conciliation negotiations or administrative enforcement proceedings, or to suspension or debarment proceedings subject to agency discretion.
Next Steps for Employers
The EO applies specifically to training, and not policies or other documents that employers may publish as part of diversity and inclusion programs. If the EO is fully implemented, its terms could result in significant modifications to diversity and inclusion trainings, including how concepts such as unconscious bias and meritocracy are addressed. If it remains in effect, employers will want to begin gathering their various trainings together to prepare for a review of content which may be considered “divisive concepts,” using the keywords identified in the Memorandum. Upon review, employers should consider whether any revisions to those materials may be necessary. Federal contractors also should consider retaining all training materials, including PowerPoints and speaker outlines should the need to defend these materials arise.
Employers with current federal contracts should also be aware that employees may file complaints with OFCCP at any time before, as well as after, November 21, based on training and related materials they may perceive as contrary to the EO which could trigger a compliance audit from the agency.
OFCCP has released some Frequently Asked Questions (FAQs) addressing the EO, which employers are encouraged to review.