President Biden wasted no time following his inauguration on 20 January, signing more than a dozen executive actions, including the Executive Order On Advancing Racial Equity and Support for Underserved Communities Through the Federal Government. The Racial Equity EO calls for a ‘whole-of-government’ initiative to advance racial equity, directs federal agencies to undertake a baseline review of the state of equity within their agencies, launches an equity data working group, and directs agencies to engage with communities who have been historically underrepresented, underserved, and discriminated against in federal policies.  Importantly, the Racial Equity EO revokes the Trump Administration’s Executive Order 13950, Combating Race and Sex Stereotyping, which prohibited federal contractors from engaging in specified diversity and inclusion training, effective immediately.   

Background on EO 13950  

President Trump signed EO 13950 on 22 September 2020, in an effort to ‘combat offensive and anti-American race and sex stereotyping and scapegoating’ and end so-called ‘divisive concepts’ promulgated in workplace employee trainings. EO 13950 prohibited certain covered government contractors from conducting diversity and inclusion trainings that cover topics suggesting people of a certain race or gender are ‘inherently racist, sexist, or oppressive, whether consciously or unconsciously’. More information on EO 13950 is available here. Since the signing of EO 13950, the Office of Federal Contract Compliance Programs (OFCCP) set up a hotline to receive complaints regarding training materials and issued a voluntary Request for Information through the Department of Labor, soliciting federal contractors to submit training materials for review. In addition, EO 13950 ordered that a clause implementing the requirements of EO 13950 be included in all federal contracts entered into or renewed after 21 November 2020. However, EO 13950 was instantly very controversial and drew intense opposition from both employers and civil rights organizations. 

Nationwide Injunction Granted  

In November 2020 various LGBT rights groups filed a lawsuit in federal court against President Trump and several federal agencies and officials, seeking relief from EO 13950. On 22 December 2020, the court granted a nationwide preliminary injunction stopping the implementation and enforcement of EO 13950 on constitutional free speech and due process grounds. The court ruled that EO 13950 violated the Free Speech Clause of the First Amendment ‘because it impermissibly chills the exercise of the Plaintiffs’ constitutionally protected speech, based on the content and viewpoint of their speech’. The court also ruled that parts of EO 13950 were so vague they violated the Fifth Amendment Due Process Clause because ‘it is impossible for Plaintiffs to determine what conduct is prohibited’. 

Analysis of President Biden’s Racial Equity EO  

The Racial Equity EO opens with a policy statement highlighting that ‘advancing equity, civil rights, racial justice, and equal opportunity is the responsibility of the whole of our Government’, since ‘the American Dream remains out of reach’ for many individuals who ‘have been historically underserved, marginalized, and adversely affected by’ the ‘entrenched disparities in our laws and public policies, and in our public and private institutions’.  To ‘advance equity’ and ‘work to redress inequities’ found in federal ‘policies and programs that serve as barriers to equal opportunity’, President Biden not only rescinded EO 13950, but also outlined multiple strategic directives:  

• The Office of Management and Budget (OMB) is required to ‘study methods for assessing whether agency policies and actions create or exacerbate barriers to full and equal participation by all eligible individuals’. 
• The OMB must deliver a report to the President within six months that describes the best methods to combat those barriers identified by the study and recommend approaches to expand the use of those methods across the federal government. 
• All federal agencies must conduct ‘a baseline review of the state of equity within their agency and deliver an action plan within 200 days to address unequal barriers to opportunity in agency policies and programs’. 
• The OMB will ‘identify opportunities to promote equity in the budget that the President submits to the Congress’. 
• All federal agencies are to ‘consult with members of communities that have been historically underrepresented in…, underserved by, or subjected to discrimination in, Federal policies and programs’ and evaluate opportunities to increase coordination with these communities. 
• The EO establishes an Interagency Working Group on Equitable Data (the ‘Data Working Group’) with the mission to gather data to measure and advance equity since ‘[m]any Federal datasets are not disaggregated by race, ethnicity, gender, disability, income, veteran status, or other key demographic variables’. 
• The Data Working Group will provide recommendations to remedy this data collection deficiency throughout the federal agencies. 

Employers’ Bottom Line  

Employers may see new and more detailed data collection inquiries as the OMB and the Data Working Group begin to act on President Biden’s directives. However, employers can now breathe a little easier and return to the business of developing, implementing and pursuing their Diversity, Equity and Inclusion initiatives, including multi-faceted training, as all compliance uncertainty surrounding EO 13950’s diversity and inclusion limitations are extinguished.