Federal Contractors and Recipients of Federal Grants Granted Relief from President’s Executive Order on Diversity and Inclusion Training

By Liani J. Reeves & Benjamin P. O'Glasser - Bullard Law

December 23, 2020

In our alert issued on October 19, 2020, we outlined President Trump’s Executive Order on  September 22, 2020 (“EO”) titled “Combating Race and Sex Stereotyping,” which sought to put an end to certain types of diversity and anti-bias training by the federal government, federal contractors, and recipients of federal grants.

The EO impacted federal contracts entered into after November 21, 2020, by requiring that such contracts include a provision prohibiting the contractor from using any workplace training that inculcates in its employees “any form of race or sex-stereotyping or any form of race or sex scapegoating[.]” The stated intent of the order was to prevent trainings that the EO described as “assigning fault, blame, or bias to a race or sex, or members of a race or sex because of their race or sex.” The EO targeted subjects like implicit bias, systemic racism, and White privilege. It also required federal contractors to include similar provisions in subcontracts and purchase orders and required federal contractors to send each labor union (or representative of workers covered by a collective bargaining agreement or other contracts) a notice advising them of the contractor's commitments under the EO and to post copies of the notice conspicuously.

As we predicted, the Executive Order was challenged in court; that challenge has proven successful, in part. A lawsuit was filed in the U.S. District Court for the Northern District of California by various nonprofit and community organizations that serve the LGBT community and people living with HIV. The plaintiffs’ work includes advocacy and training about systemic bias, racism, anti-LGBT bias, White privilege, implicit bias, and intersectionality—the very such concepts that are forbidden by the President’s EO. The plaintiffs argued that the EO required them to censor or cease training that is fundamental to their missions (in violation of their First Amendment free speech rights) and threatens their funding through government grants and contracts with an impermissibly vague list of prohibitions (in violation of their Fifth Amendment due process rights).

Yesterday, on December 22, 2020, a judge granted a preliminary injunction halting enforcement of the EO. In granting the injunction, the judge made findings that the plaintiffs are likely to prevail on their First Amendment and Due Process claims; the plaintiffs established a likelihood of irreparable harm absent issuance of injunctive relief; and that the balance of harms tips in the plaintiffs’ failure if the order were to be enforced.

The Court’s injuction is limited to the enforcement of Section 4 (related to government contractors) and Section 5 (related to the recipients of federal grants) of the Executive Order. The EO remains in effect with respect to the United States Uniformed Services and federal agencies.

The case may be appealed by the federal government (the deadline to file an appeal is after inauguration day) and there is speculation that it will become a moot point with a change in administration, given that President-Elect Biden will likely rescind the order. However, for now, federal contractors and recipients of federal funds have a reprieve from enforcement of the order.

We will keep you updated with additional developments.