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  • Writer's pictureAdele L. Abrams, Esq., CMSP

New Executive Order Impacts Contractors’ Diversity Programs

Last month, President Trump announced an executive order that expanded his earlier ban on diversity training – initially limited to federal agencies – to include federal contractors and also federal grant recipients. The first move, limited to federal agencies, came in a memo from the Office of Management and Budget (OMB) directing federal agencies to cancel programs that discuss “white privilege” or “critical race theory.” The latter concept teaches that racism and racial inequality are a result of systemic power structures.

The move was a 180-degree shift from an Executive Order issued by President Obama – the “Fair Pay & Safe Workplaces” E.O. – which was rescinded in 2017. The Obama-era order subjected federal contractors to enhanced scrutiny to ensure compliance with federal EEOC, U.S. Department of Labor employment laws, and with safety and health regulations enforced by the Occupational Safety & Health Administration.

The E.O. bars federal contractors and grant recipients from teaching “divisive concepts,” such as the idea that one race or sex is superior, that the United States is fundamentally racist or sexist, that any individual should feel “discomfort, guilt, anguish” or physiological distress because of their race or sex or that an individual bears responsibility for past actions by others of the same race or sex.

The presidential action comes at a time that corporations have stepped up their diversity, equity and inclusion (DEI) programs and training, in order to be more inclusive in terms of addressing racial and gender disparities – particularly in management roles, and in response to the Black Lives Matter movement’s calls for equity. The Trump Executive Order may result in chilling further efforts or setting back actions to address workplace equality by punishing federal contractors who continue to implement such programs. President Trump has called DEI training programs “divisive and un-American.”

The E.O. also raises concerns about tension between legal requirements, as some state and local government agencies with whom the contractors may also do business mandate DEI training sessions for employees. Many of the affected are federal defense contractors, and while the Army has said it has no specific plans to implement the E.O., the Air Force is already reviewing and cancelling contracts for non-compliance with the new ban.

Legal challenges to the E.O. are anticipated, and it is recommended that companies not disrupt DEI efforts as implementation is likely to be placed on hold during any litigation. If there is a change in administration, companies will want to have fully implemented DEI initiatives as a return to Obama-era policies would be expected with respect to federal contracting.

For more information on employment and safety law compliance, contact Adele Abrams at

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