Executive Order on Combating Race and Sex Stereotyping affects government contractors and grantees

On September 22, 2020, the Trump administration issued an Executive Order (EO) on Combating Race and Sex Stereotyping, which prohibits or limits "any form of race or sex stereotyping" or "race or sex scapegoating" in employee trainings being provided by federal contractors, certain federal grant recipients, and federal government agencies. The EO comes just weeks after the administration issued a memorandum asking federal agencies to "cease and desist from using taxpayer dollars" to fund "divisive, un-American propaganda training."

New requirements for government contractors and grant recipients

The EO requires new federal government contracts to include provisions prohibiting training that promotes "divisive" concepts, such as:

(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.

The prohibition must be included in all federal contracts entered into on or after November 21, 2020 (i.e., 60 days after issuance of the EO), unless exempted in the manner provided by section 204 of Executive Order 11246 (Equal Opportunity), as amended. This effectively leaves the door open for classes of contracts (e.g., commercial items contracts, contracts below a certain threshold) and contracts "that special circumstances in the national interest so require" to be exempted from the new prohibition. While it is possible that the "national interest" exemption could be applied in the context of COVID-19 contracts, it is unclear whether other contracts would be exempted.

Given the vague and broad language included in this list, it will be challenging for contractors to create acceptable trainings. This is even more problematic in the context of the substantial risk for contractors that an employee will become a whistleblower and report the employer if they disagree with the content of a particular training.

Federal contractors will be required to "flow down" these provisions when entering into a new subcontract or purchase order. Notably, there is language in the EO that suggests that prime contractors would be responsible for enforcing the prohibition against their subcontractors at the direction of the secretary of labor. Additionally, the EO requires contractors to post a notice (to be provided by the federal government) in employee common areas regarding the contractor's commitment to upholding the EO. Penalties for non-compliance may include contract suspension or termination and debarment.

The EO also will require certain federal grant recipients to certify that federal funding will not be used to promote the "divisive" concepts addressed above as a condition of receiving a grant. The EO appears to be less restrictive with respect to federal grantees because it doesn't apply a blanket prohibition on trainings that promote "divisive" concepts as is does with contractors, but rather, simply prevents the use of federal funds to finance such trainings. This raises the question of how a federal grantee will establish that non-federal funds rather than federal funds were used for a particular training program. The EO is silent on this point, but it seems reasonable that grantees could adopt an approach sometimes advanced in the context of similar prohibitions on the use of federal funds – i.e., if a company has adequate non-federal funds that can be used for the training, the presumption is that non-federal funds were, in fact, used. 

OFCCP enforcement of the EO

The EO appears to designate the Office of Federal Contract Compliance Program (OFCCP) as the enforcement agency for the new requirements under the EO. The EO requires the OFCCP to publish a request for information, within 30 days, in the Federal Register seeking information from federal contractors, subcontractors, and their employees regarding "any training, workshop, or similar programing having to do with diversity and inclusion as well as information about the duration, frequency, and expense of such activities." OFCCP is also directed to establish "a hotline and investigate 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."

Attorney general's role

Finally, the EO empowers the U.S. attorney general to assess the extent to which the "divisive concepts" may contribute to a "hostile work environment and give rise to potential liability under Title VII of the Civil Rights Act of 1964" and, if appropriate, issue publicly available guidance to "assist employers in better promoting diversity and inclusive workplaces consistent with Title VII." This element of the EO appears to be aimed at changing the practices of all employers, regardless of whether or not they contract with the federal government.

If you have any questions about how this new EO will affect your company's obligations under federal contracts or grants, please contact our Government Contracts team.

Authored by: Michael Vernick, Allison Pugsley, Joy Sturm, Ryan Harrigan.