Under a new presidential executive order, employers may not provide any employee training that teaches employees “cannot and should not attempt to treat others without respect to race or sex” if the employer is a federal contractor.

Following a September 4, 2020 White House memorandum reprimanding federal agencies for holding “divisive, un-American” instruction on systemic racism, on September 22 Donald Trump signed Executive Order 13950, “Executive Order on Combating Race and Sex Stereotyping,” which prohibits federal agencies from “promot[ing] race or sex stereotyping in the Federal workforce or in the Uniformed Services.” The Order goes much farther than that, however, by providing that federal contractors “will not be permitted to inculcate such views in their employees.”

Training Restrictions

Under the Order, federal contractors are banned from training on “divisive concepts,which include:

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

(2)  that the United States is fundamentally racist or sexist;

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

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

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

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

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

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

(10) any other form of race or sex stereotyping or any other form of race or sex scapegoating.

The Order also bans “race or sex scapegoating” by federal contractors, 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,” and “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 federal Office of Contract Compliance Programs (OFCCP), a division of the U.S. Department of Labor (DOL), which enforces the Order, published a list of FAQs that expand upon the following key concepts in the Order:

  • Race or sex stereotyping is defined to mean “ascribing character traits, values, moral and ethical codes, privileges, status, or beliefs to an entire race or sex, or to individuals because of their race or sex.”
  • Unconscious or implicit bias training “is prohibited to the extent it teaches or implies that an individual, by virtue of his or her race, sex, and/or national origin, is racist, sexist, oppressive, or biased, whether consciously or unconsciously.”
  • Training that is “designed to inform workers, or foster discussion, about pre-conceptions, opinions, or stereotypes that people—regardless of their race or sex—may have regarding people who are different, which could influence a worker’s conduct or speech and be perceived by others as offensive” is not prohibited.

Craig Leen, who heads the OFCCP, has stated publicly that unconscious bias training remains “perfectly fine” under the Order so long as it “teaches that everyone, based on the human condition, has unconscious biases,” and does not specifically call out a particular race or sex as being inherently biased.

Required Changes to Contracts and Purchase Orders

In addition to imposing training prohibitions, the Order also requires government contractors to include in every government contract and all subcontracts and purchase orders the following four-paragraph, nearly 600-word disclosure, reflecting the contractor’s agreement not to use workplace training containing divisive concepts or race or sex scapegoating:

During the performance of this contract, the contractor agrees as follows:

  1. 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 (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 term “race or sex stereotyping” 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, and the term “race or sex scapegoating” 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.
  2. The contractor will send to each labor union or representative of workers with which he has a collective bargaining agreement or other contract or understanding, a notice, to be provided by the agency contracting officer, advising the labor union or workers’ representative of the contractor’s commitments under the Executive Order of September 22, 2020, entitled Combating Race and Sex Stereotyping, and shall post copies of the notice in conspicuous places available to employees and applicants for employment.
  3. In the event of the contractor’s noncompliance with the requirements of paragraphs (1), (2), and (4), or with any rules, regulations, or orders that may be promulgated in accordance with the Executive Order of September 22, 2020, this contract may be canceled, terminated, or suspended in whole or in part and the contractor may be declared ineligible for further Government contracts in accordance with procedures authorized in Executive Order 11246, and such other sanctions may be imposed and remedies invoked as provided by any rules, regulations, or orders the Secretary of Labor has issued or adopted pursuant to Executive Order 11246, including subpart D of that order.
  4. The contractor will include the provisions of paragraphs (1) through (4) in every subcontract or purchase order unless exempted by rules, regulations, or orders of the Secretary of Labor, so that such provisions will be binding upon each subcontractor or vendor. The contractor will take such action with respect to any subcontract or purchase order as may be directed by the Secretary of Labor as a means of enforcing such provisions including sanctions for noncompliance: Provided, however, that in the event the contractor becomes involved in, or is threatened with, litigation with a subcontractor or vendor as a result of such direction, the contractor may request the United States to enter into such litigation to protect the interests of the United States.

Enforcement and Penalties

The Order is effective September 22, and will apply to contracts entered into on and after November 21, 2020. Covered employers are those that hold qualifying government contracts exceeding $10,000 in a 12-month period and that are subject to Executive Order 11246. Like other executive orders, the Order will remain in effect unless it is revoked, modified, or superseded by a sitting President, revoked by Congress, or declared illegal in court.

Contractors that are found to be conducting race or sex stereotyping or scapegoating in a training program, or otherwise found to be in violation of the Order, could have their government contracts canceled, terminated, or suspended, and may also be ineligible for further government contracts.

According to the FAQs, race or sex stereotyping or scapegoating in a training program, or in employment generally, could violate EO 11246’s affirmative and nondiscrimination obligations, and thus the OFCCP may investigate race and sex stereotyping/scapegoating claims as an independent violation of Executive Order 11246. Potential penalties under EO 11246 include publication of names of violators, recommending EEOC or DOJ proceedings against the contractor alleging breach of contract, Title VII violations, or furnishing false information; cancellation of contracts; and ordering that agencies refrain from contracting with the contractor in the future.

The Order also contemplates and references possible Title VII violations for training that violates the Order. The Order directs the U.S. Attorney General 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,” and allows the Attorney General and EEOC discretion to issue guidance “to assist employers in better promoting diversity and inclusive workplaces consistent with Title VII.” It is possible that such guidance may be forthcoming stating that training that promotes “divisive concepts” as described in the Order violates Title VII.

The DOL has set up a complaint hotline to report violations of the order by phone or by email, and states that it will treat hotline complaints “similar to complaints filed traditionally” under other statutes and orders the DOL enforces. Additionally, the DOL is drafting a Request for Information as directed by the Order, which “will seek information from federal contractors, federal subcontractors, and employees of federal contractors and subcontractors regarding their training, workshops, or similar programming provided to employees that may be in violation of Executive Orders 11246 or 13950.”

Compliance Requires Almost Every Federal Contractor to Change Business and Personnel Practices

Against the backdrop of racial unrest in the country, Executive Order 13950 is likely to cause uncertainty and challenges for government contractors that wish to conduct diversity and inclusion programs and also remain compliant with the law. Through its FAQs and public comments, the DOL suggests there is a path forward that can accomplish both goals, however has offered few specifics at this time.

What is known is that compliance with the Order will require virtually all employers holding federal contracts to supplement their government contracts, subcontracts, and purchase orders with the above provisions regarding training. Inclusion of those provisions in contracts and purchase orders, presumably, presupposes that the contractor is in compliance with the training restrictions. For some contractors, this could involve significant alterations to their EEO, diversity, and inclusion programs.

For further discussion and guidance regarding Executive Order 13950, please contact Schiff Hardin’s Labor and Employment professionals.