The Trump administration issued Executive Order (EO) 13950 on September 22, 2020. The order prohibits federal contractors, federal agencies and certain federal grant recipients, as well as the military, from using workplace training that “inculcates in its employees any form of race or sex stereotyping or any form of race or sex scapegoating.” There are many uncertainties surrounding EO 13950, including whether it will survive legal challenges and a potential change in presidential administration. This blog discusses measures that contractors should consider right now and identifies potential implications of noncompliance.

The contractor obligations outlined in the order apply to federal contracts entered on or after November 21 (60 days after the issuance of EO 13950). However, in the Office of Federal Contract Compliance Programs’ (OFCCP) guidance issued on October 7, it is made clear that the OFCCP “may investigate claims of sex and race stereotyping pursuant to its existing authority under EO 11246, which requires contractors and subcontractors to treat employees without regard to their race or sex, among other protected bases, and requires contractors to take affirmative action to ensure such discrimination does not occur.” Additionally, pursuant to EO 13950, the OFCCP has already set up its hotline and will presumably begin investigating complaints received under both this order and EO 11246, alleging that a federal contractor is utilizing such training programs in violation of the contractor’s obligations under those orders. All this to say, contractors should be prepared to comply and undertake various actions immediately to avoid, at the very least, potential for employee complaints to the hotline.

What Should Federal Contractors Do Now?

  1. Review diversity trainings and identify any areas that may run afoul of EO 13950. While there is uncertainty surrounding how some of the terms may be defined and much of that interpretation will be subjective, we expect OFCCP to, at the very least, do a keyword search for such terms as “unconscious bias,” “white privilege,” “critical race theory,” “positionality,” “systemic racism,” “racial humility,” and “intersectionality.” If possible and feasible, you may wish to put a pause on your diversity training programs while you and / or legal counsel review the trainings.
  2. Be prepared for potential changes and modifications to procurement documents to include the necessary flow-down provisions.
  3. Ensure that necessary protocols are in place to respond to any potential hotline complaints and potential OFCCP investigations.
  4. Send and post to each labor union or representative of workers and employees the appropriate postings, as required.
  5. Keep apprised of any and all updates, as well as further potential guidance from the Department of Labor.

What Should Federal Contractors Expect?

EO 13950 is clear about the consequences of noncompliance. Indeed, in the event of the contractor’s noncompliance, the contract may be canceled, terminated, or suspended in whole or in part and the contractor may be declared ineligible for further government contracts under EO 13950, as well as under EO 11246.

While some of these consequences may seem overreaching and may, practically speaking, seem implausible in the near future, the OFCCP seems to be taking a harsh stance on enforcing provisions of EO 13950 immediately. That said, the order is still in its early stages and will have to overcome many legal challenges. Indeed, on October 29, the first of what is likely to be many lawsuits challenging EO 13950 was filed in DC district court. Additionally, the order does not technically come into effect until November 21, after an election that may result in an administration change come January 2021, which could cause the order to be revoked entirely.

Regardless of how EO 13950 is challenged moving forward, contractors should be prepared and take measures to ensure compliance over the next few weeks. Consulting with legal counsel regarding the implications of EO 13950 and best practices in diversity training is also recommended. If you need such assistance, the Labor and Employment team at PilieroMazza is here to help.