On September 22, 2020, President Trump issued an executive order designed to discourage federal contractors from conducting workplace training on purportedly divisive concepts in the area of diversity, equity and inclusion (DEI), and to penalize contractors that violate the order. The order also applies limits to purportedly divisive DEI training within the military and federal agencies, and with respect to federal grant recipients.

The order compels federal contractors and subcontractors that are otherwise subject to federal contract compliance (pursuant to Office of Federal Contract Compliance Programs (OFCCP) regulations and other applicable federal law) to agree, as a condition of entering into such a contract, not to deliver workplace training that includes race or sex stereotyping or scapegoating. Such purported stereotyping or scapegoating includes the following concepts: (i) inherent race or sex superiority; (ii) inherent racism or sexism (whether conscious or unconscious); (iii) an individual's moral character is necessarily determined by his or her race or sex; (iv) meritocracy or traits such as a hard work ethic are racist or sexist, or were created by a particular race to oppress another race; and (v) assigning fault, blame, or bias to a race or sex, or to members of a race or sex because of their race or sex. A full list of the prohibited concepts is set forth in the order.

All applicable contracts must include a commitment by the contractor to comply with the order. In addition, contractors must post a notice regarding the order in a conspicuous place available to all employees and applicants, and to notify labor union representatives as applicable. The federal contractor must also include, in every applicable federal subcontract, a provision that the terms of the order will be binding upon all such subcontractors or vendors. Lastly failure to comply with the order may result in the termination or suspension, in whole or in part, of the applicable federal contract.

The provisions of the order affecting covered federal contractors applies to all federal contracts entered into on or after November 21, 2020.

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