EO 13950 states it was issued “to combat offensive and anti-American race and sex stereotyping and scapegoating.” 

On September 22, 2020, President Trump issued Executive Order (EO) 13950, “Combating Race and Sex Stereotyping.” This comes on the heels of a memo issued by the Office of Management and Budget (OMB) to federal agencies criticizing what the memo characterized as “divisive, anti-American propaganda” training conducted at some agencies and the use of tax dollars to support such training. EO 13950 formally extends this admonition to federal government contractors and grant recipients, prohibiting them from conducting employee training that the order labels “blame-focused diversity training” that it claims “perpetuates racial stereotypes and division” and “reinforces biases and decreases opportunities for minorities.”

OMB Memo Preceding Executive Order 13950

The September 4, 2020, OMB memo attacked agency trainings containing specific messaging, including:

• Instruction that “virtually all White people contribute to racism”;
• The requirement for white individuals to say that they “benefit from racism”; and
• Instruction that “racism is embedded in the belief that American is a land of opportunity or in the belief that the most qualified individual should receive the job.”

The OMB memo stated that such training undercuts the core values of America and drives further division in the country. The OMB instructed all agencies to identify contracts or spending on “any training on ‘critical race theory,’ ‘white privilege,’ or any other training or propaganda effort that teaches or suggests either (1) that the U.S. is an inherently evil or racist country or (2) that any race or ethnicity is inherently evil or racist.”

Employee Training Targeted by Executive Order 13950

EO 13950 states it was issued “to combat offensive and anti-American race and sex stereotyping and scapegoating.” In ideologically tinged language highly unusual for an executive order applicable to employment-related activities of federal government contractors, EO 13950 states that:

Today… many people are pushing a different vision of America that is grounded in hierarchies based on collective social and political identities rather than in the inherent and equal dignity of every person as an individual. This ideology is rooted in the pernicious and false belief that America is an irredeemably racist and sexist county; that some people, simply on account of their race or sex, are oppressors; and that racial and sexual identities are more important than our common status as human beings and Americans. … Unfortunately, this malign ideology is now migrating from the fringes of American society and threatens to infect core institutions of our country. Instructors and materials teaching that men and members of certain races, as well as our most venerable institutions, are inherently sexist and racist are appearing in workplace diversity trainings across the country, even in components of the Federal Government and among Federal contractors.

Accordingly, EO 13950 states at the conclusion of Section 1 (Purpose):

[I]t shall be the policy of the United States not to promote race or sex stereotyping or scapegoating in the Federal workforce or in the Uniformed Services, and not to allow grant funds to be used for these purposes. In addition, Federal contractors will not be permitted to inculcate such views in their employees.

Notably, the EO does briefly allow that:

Executive departments and agencies [such as] our Uniformed Services, Federal contractors, and Federal grant recipients should, of course, continue to foster environments devoid of hostility grounded in race, sex, and other federally protected characteristics. Training employees to create an inclusive workplace is appropriate and beneficial. The Federal Government is, and must always be, committed to the fair and equal treatment of all individuals before the law.

What Federal Contractors Need to Know About EO 13950

To What Federal Contracts Does EO 13950 Apply?

Federal contracts entered into on or after November 21, 2020, are required to comply with the provisions of EO 13950. While unclear on its face, it is likely that EO 13950 applies to options, extensions or modifications of existing contracts entered into after November 21.

New Contract Clause

Section 4(a) of the EO mandates the full text of a new required contract clause that federal agencies must include in new federal contracts, which opens as follows:

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

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.

Similarly, the EO also expressly requires federal contractors to flow down EO 13950’s new contract clause language “in every subcontract or purchase order.” The EO, however, has no commercial items exemption or minimum dollar thresholds for applicability, putting the new EO’s language at odds with the manner in which current OFCCP contract clauses are applied to federal contractors and all tiers of subcontractors and vendors.

Prohibited Content of Federal Contractor Employee Training

EO 13950 prohibits training that includes race or sex stereotyping or scapegoating. “Race or sex stereotyping” is defined 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.” “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.”

EO 13950 also identifies and prohibits the following nine specific “divisive concepts,” which are enumerated in full as part of the new EO clause:

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; and
9. That meritocracy or traits such as hard work ethic are racist or sexist, or were created by a particular race to oppress another race.

Notice to Employees, Applicants and Unions

EO 13950 also requires federal contractors to provide a notice to employees, applicants and unions. The notice must be posted in a conspicuous place available to employees and applicants (similar to other workplace posters) and must be sent to any union representing the contractor’s employees. The notice required to be provided has not yet been published.

Hotline

The new EO also requires a specific hotline be established for reporting violations of EO 13950. The Office of Federal Contract Compliance Programs (OFCCP) quickly created the hotline, which is now active.

Enforcement

Noncompliance with the new EO 13950 may result in federal contracts being “canceled, terminated, or suspended in whole or in part and the contractor may be” debarred. In addition, contractors are “authorized” by the EO to “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.” Finally, the EO permits contractors to request the United States to enter into any litigation between the contractor and subcontractors “to protect the interests of the United States.” The EO, however, provides no specifics as to how any of this should be accomplished, how a contractor taking such action could be shielded from contract liability from its subcontractors, or any legal framework for the United States government to intervene in private litigation between contractors and their subcontractors. EO 13950 also instructs OFCCP to solicit information from contractors regarding training, workshops or similar programming provided to employees, as well as the duration, frequency and expense of such activities, starting 30 days after issuance of the EO. OFCCP published this request for information on October 21, 2020.

What Federal Grantees Need to Know About EO 13950

Federal grant recipients are also impacted by EO 13950, although the requirements are less specific than those for federal contractors. The EO requires the “heads of all agencies [to] review their respective grant programs and identify programs for which the agency may, as a condition of receiving such a grant, require the recipient to certify that it will not use Federal funds to promote” the “divisive concepts.” Federal agencies are directed to report to the director of OMB by November 21, 2020, all such federal grant programs so identified.

Industry Pushback and Uncertain Future of EO

In recent days, noting various problems with the EO, various industry groups have advocated that the EO be withdrawn and that the administration work with industry to develop an approach that would support appropriate workplace training programs. It is reasonable to expect that even more industry groups will express similar opposition to the EO in the days leading up to the November 21 effective date. In addition, it is widely expected that if a new president is inaugurated in January 2021, the EO promptly will be withdrawn.

What This Means for Employers

Federal government contractors and grantees who enter into federal government contracts or receive grants covered by EO 13950―as well as all tiers of subcontractors, vendors and subgrantees―should work with government contracts counsel to verify the new EO applies to any new contract or grant vehicle as well as with employment counsel to carefully review their diversity and inclusion training programs for employees as well as all employee training touching on issues such as race and sex discrimination and harassment to ensure compliance with EO 13950. Covered contractors and grantees also should ensure compliance with the “technical” requirements of EO 13950, including inserting the required contract clause into any covered subcontracts and complying with the EO’s notice posting and issuance requirements. Employers, however, should keep in mind that the new EO only applies to “new” federal contracts entered into after November 21, 2020, and does not apply to federal contracts or grants entered into before November 21 (absent a contract modification, extension or option). Given the significant industry pushback and the upcoming presidential election, it is possible that the EO may be completely withdrawn or significantly retooled in the coming weeks and months. Employers should remain vigilant for updates to this EO and its enforcement before entering into any new federal contracts or grants, or contracts supporting such federal contractors or grantees.

For More Information

If you have any questions about this Alert, please contact Christopher D. Durham, Meredith Gregston or any of the attorneys in our Employment, Labor, Benefits and Immigration Practice Group; Michael J. Schrier or any of the attorneys in our Government Contracts and International Trade Group; Joseph K. West or any member of our Diversity and Inclusion Advancing Leadership team; or the attorney in the firm with whom you are regularly in contact.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.