Some anticipate that President-elect Joseph Biden will revoke the Trump administration’s Executive Order (EO) 13950 that restricts the content of certain diversity-related workplace trainings. On December 22, 2020, the United States District Court for the Northern District of California issued a nationwide preliminary injunction in the case of Santa Cruz Lesbian and Gay Community Center d/b/a The Diversity Center of Santa Cruz v. Trump, holding that the plaintiffs had demonstrated (among other things) a sufficient likelihood of success on their claims that EO 13950 is unconstitutional on its face. The order, which went into effect immediately and on a nationwide basis, allows private federal contractors and federal grant recipients to conduct workplace training programs and related activities without facing penalties for “stereotyping” or “scapegoating” under EO 13950. While the injunction does not impact trainings provided to federal employees, on December 22, 2020, a group of U.S. Department of Justice (DOJ) employees circulated a letter calling for an official investigation into EO 13950 and related executive branch actions targeting diversity-and-inclusion programs.

Background

Both the court order and the whistleblower letter reference the EO within its broader context as part of a series of executive actions, targeting diversity programs that contain an educational component on historical racism. The whistleblower letter refers collectively to these actions as the “Diversity Directives.”

Nationwide Preliminary Injunction

In issuing the December 22, 2020, injunction, The Diversity Center of Santa Cruz court held that the plaintiffs, including several nonprofit organizations—had demonstrated constitutional standing, as well as the potential to suffer irreparable harm, and legitimate interests that prevailed decisively in comparison to the government’s. The court held that the plaintiffs would likely prevail on the merits of their free speech and due process constitutional challenges to EO 13950:

• The court emphasized that the EO restricted speech about topics of public concern that the First Amendment protects, namely racism and discrimination, and noted that the government’s interests in training its own workforce were insufficient to justify the EO’s “impermissible reach” in restricting content used to train federal contractors’ employees or other providers.

• The court was also satisfied that the challenged provisions were unconstitutionally vague. The court pointed to unexplained inconsistencies in word choices within the order. For example, the text of the order forbids federal contractors from “inculcating” a concept that federal grant recipients were prohibited to “promote,” while the U.S. Department of Labor, in answers to its frequently asked questions (FAQs) about that same concept, used neither of those terms and instead opted for “teach” and “imply” to describe the prohibited actions. Using this as one example, the court agreed with the plaintiffs that it was impossible to determine what conduct was prohibited.

Other than leaving intact the EO’s provisions relevant to the government’s own employees, the court rejected the government’s requests to limit the scope of the proposed injunction. In arriving at this conclusion, the court found that only an immediate nationwide injunction as to Sections 4 and 5 of the executive order would afford the relief necessary for the plaintiffs to continue training deemed essential to their missions of providing health care, social services, and other services to LGBTQ communities across the country.

DOJ Whistleblower Letter

The December 22, 2020, letter written by DOJ employees requests an investigation into allegations that the Diversity Directives are not only unconstitutional and an abuse of executive-branch authority, but “gross mismanagement and gross waste of funds,” e.g., in “explicit rescission of decades of deliberate and iterative planning, review, and implementation.” The letter further asserts that “[t]he Diversity Directives also place irresponsible and unaccounted for financial burdens on all federal agencies” to engage in specific processes to comply with them. Additionally, the authors of the letter state:

The Diversity Directives signal to all that minorities are not welcome, their positions are not secure, and that discussing systemic injustice is inappropriate in the workplace or otherwise. This is especially obvious, because they were issued amidst civil unrest and racial reckonings underway throughout the nation in the wake of continued and unjustified killings of Black Americans by law enforcement officers. The directives were implemented to silence conversations surrounding issues of race, nationality, and gender during a time when such conversations have been most needed. The directives are harming and will continue to harm underrepresented employees.

The End of the EO?

The developments from the court injunction and the DOJ employee letter lack concrete action items. Employers may find the following observations of use:

Implications for “Flow down” Language in Contracts

While the preliminary injunction remains in effect, covered federal contractors and subcontractors entering new contracts and renewing existing contracts need not add EO 13950’s “flow down” language representing that they will not use the prohibited training. Contractors can reassess changes to this language after final resolution of EO 13950’s status is reached. Similarly, the recently prescribed language for notice to unions, employees, and applicants need not be provided while the preliminary injunction remains in effect.

OFCCP Ceases Enforcement of Complaints Under EO 13950

Following the entry of the preliminary injunction, the Office of Federal Contract Compliance Programs (OFCCP) removed the EO 13950 complaint hotline that had been featured on its landing page. Instead, the website now reads, “OFCCP will cease using any hotline to collect information regarding contractors’ alleged noncompliance with Executive Order 13950, will cease investigation of any alleged noncompliance with Executive Order 13950 received through the hotline or any other means, and will not take any enforcement action or seek remedial relief as a result of such alleged noncompliance with Executive Order 13950.” In addition, it specifies that OFCCP will “not engage in any further investigation” of complaints filed exclusively under EO 13950 that were received prior to December 22, 2020. OFCCP will continue to receive and investigate complaints through the procedures established for Executive Order 11246, which could include allegations similar to those solicited under EO 13950.

Reflecting on any Recent EO 13950-Motivated Changes to Programming

By the time of the December 22, 2020, court order, some employers had already canceled or scaled back certain programs, removed certain words from their trainings, or postponed training sessions. As the court noted in its description of the EO’s vagueness, any changes employers made may not have been necessary. Regardless, in considering additional changes, employers may want to articulate a legitimate diversity-and-inclusion purpose for such changes. For example:

• Employers that developed innovative ways to present educational material consistent with the latest and best diversity-and-inclusion practices that did not violate the tenets of EO 13950 are generally not prevented from continuing to use these.

• Employers that replaced certain words (e.g., “privilege”) in their training programs because of the EO but otherwise took care to preserve the underlying concepts from a diversity-and-inclusion perspective need not reinsert excised words but could consider doing so if the resulting language seems contrived.

• Employers and contractors may reconsider the hypotheticals or illustrative examples they chose to include in trainings if any changes that they had made in response to EO 13950 resulted in relevant content omissions.

• Companies that inserted disclaimers based on EO 13950 into their trainings may wish to preserve certain sentiments that may help all participants approach the training in an open-minded manner, while perhaps changing language that tracks the text of EO 13950 specifically.

• Organizations that diverted charitable donations, funding, or sponsorships based on EO 13950 may wish to factor in the potential harm that the recipients of the funding may have suffered.

Seeking Opportunities to Educate and to Reinforce Values

In The Diversity Center of Santa Cruz, the court considered evidence that organizations that provide services to marginalized communities had been forced to expend time and resources to consider how their training programs could be delivered without running afoul of EO 13950. Even employers that did not change their diversity-and-inclusion plans in response to EO 13950 may have experienced employee concern about their programs. As a result, organization leaders may find it appropriate to discuss the preliminary injunction with internal stakeholders and/or reaffirm the company’s diversity-and-inclusion values more generally.

The preliminary injunction will likely be welcomed by many responsible for federal contractor diversity-and-inclusion programs and others who opposed EO 13950’s effects on diversity-and-inclusion efforts. Even as the prospect of the EO’s legal enforcement fades, employers may continue to promote the underlying concepts presented in diversity-and-inclusion trainings—which remain focused on creating the type of inclusive workplace where all employees may thrive.