Industry firms, groups and legal experts are grappling with a Trump administration executive order issued last month that mandates how federal agencies, contractors and grant recipients characterize their anti-gender and anti-race-bias training programs.

The contractor and grantee directive from President Donald Trump, set to be effective after Nov. 21, does not ban company diversity policies or training, but says contractors cannot use content that “promotes divisiveness” in the workplace.

According to Chicago-based law firm Seyfarth Shaw, federal contractors and grantees face restrictions in linking content on unconscious bias to race or gender in training programs. Violating parties will be subject to contract/grant suspension or termination and possible debarment.

Several construction sector associations on Oct. 15 joined a coalition of 150 corporate and non-profit trade groups led by the U.S. Chamber of Commerce in a letter urging Trump to withdraw the order they claim will "create confusion and uncertainty, lead to non-meritorious investigations, and hinder ...  employers to implement critical programs to promote diversity and combat discrimination in the workplace.” 

It notes that member companies have already suspended "all diversity and inclusion training," which the letter says is "contrary" to the order's purpose, and note lack of detail related to training and enforcement for contractors working outside the U.S.

Signatories include the Associated General Contractors, American Institute of Architects and American Council of Engineering Cos.,  as well as the Edison Electric Institute, Business Roundtable and National Association of Manufacturers.

The law is seen by some as a pre-election ploy and may be short-lived if Democratic candidate Joe Biden is elected president next month, but training program content has come under new scrutiny. “At this point we’re in the process of reviewing the executive order as well as our own training materials,” said a spokesperson for one construction industry firm that is a federal contractor.

Attract Disgruntled Employees?

The order requires agencies to note the requirements in all contracts awarded after Nov. 21, and mandates a contractor to enforce the rules for subcontractors and vendors, to alert labor unions or other collective bargaining partners and to post notices for employees.

The U.S. Labor Dept. has released added detail on compliance but also set up a hotline through its Office of Federal Contract Compliance Programs to receive complaints now about workplace training program content and handle needed enforcement.

The Oct. 15 employer group letter says firms "are concerned that this will invite non-meritorious complaints from employees who may be disgruntled about a range of different matters"  and that "things heard in these discussions could easily form the basis of a complaint" although not part of actual course content.

The U.S. Office of Personnel Management (OPM) on Oct. 2 also halted all federal agency diversity training until content submitted to the agency is reviewed and approved, according to a memo released by Dennis D. Kirk, an associate director.

AGC said it remains concerned the order " does not undermine our efforts to expand  diversity and inclusivity of the construction industry via programs like Culture of Care,” says Brian Turmail, group spokesman, referring to the group’s new D&I and recruitment effort. “We want to make sure that as administration officials prepare regulations, they do not inadvertently undermine efforts” to expand industry economic gains.

Some attorneys see courtroom battles ahead, with a mandate that appears to raise constitutional issues in setting requirements possibly outside the bounds of federal contract terms. The order is “an unprecedented effort to influence speech in the workplace and is likely to draw a number of challenges,” say attorneys from Washington, D.C.-based law firm Covington & Burling LLP.

In an introduction to the order, Trump takes aim at what he claims is “ideology rooted in the pernicious and false belief that America is an irredeemably racist and sexist country.”

The order focuses on training that relates to systemic racism and unconscious bias, particularly content that may single out white males.

It also points to what it considers troubling content in federal agency and contractor material, offering several examples from agencies such as the U.S. Treasury and Sandia National Laboratories—although none from contractors—and says apparent “blame-focused” training “promotes division and inefficiency” and does not expand workplace opportunity.

Looking at Training Content

The directive requires the Labor Dept. to publish by Oct. 22 a request for information in the Federal Register that seeks federal contractor program and workshop content and materials.

It also directs the attorney general to assess whether workplace training that fails to meet criteria “may contribute to a hostile work environment” and violate Title VII of the Civil Rights Act of 1964, triggering what could be possible “reverse discrimination” complaints to the Equal Employment Opportunity Commission (EEOC), say attorneys at McDermott, Will & Emery.

While Covington & Burling says the order applies “specifically to training and not to other employer D&I policies,” it still sees potential legal conflict both with other federal or state requirements to provide race and sex bias training and with mandated changes that could violate the First Amendment by “coercing or restricting private or corporate speech.”

The order uses the procurement system "to create special penalties for government contractors," said Steve Kelman, professor of public management at Harvard University and former administrator of the Office of Federal Procurement Policy in a blog post. "Of all the possible reasons to debar a federal contractor, this must be far down the list; it is punishing contractors for a thought crime."

Kelman said he is "virtually certain that language such as this has never been used before."

The Professional Services Council, a federal contractor trade group, did not post a statement on its website, but Stan Soloway, a consultant and its former president and CEO, termed the directive “window-dressing ... for political benefit,"  contending that the federal government should not “interfere” in internal company practices, says a report by online contractor publication Government Executive.

"This particular announcement seems counterproductive to the best practices that corporate America and the Fortune 500 have been doubling down-on," says Jeffery T. Halter, a leading diversity strategy corporate consultant and former Coca-Cola diversity strategy director.  "Much of corporate America is taking the lead on these conversations. It would seem to follow that the federal government could learn from these examples."

Attorneys say the presidential order and its implementing rules may be challenged as exceeding executive branch authority over processes outlined in government contracting laws such as the Administrative Procedures Act.

Under the earlier order to federal agencies, the White House says agencies must also ensure their programs don't violate new mandates, with inspectors general now required to review compliance by the end of the year to OPM.

“Our firms are trying to do the right thing for their employees, clients and end users of their designs – the public,” said ACEC Vice President Jeff Urbanchuk. “The President’s directive, which appears to be political in nature, could penalize engineering firms and expose them to substantial risk including the suspension or termination of federal contract work and even debarment. Embracing diversity and inclusion is not only the right thing to do, it’s necessary to grow the engineering workforce.  We are working with our peer trade associations to make that point to the White House.”