EO 13950 Imploded Even Before Biden Could Cancel it

RECAP

• U.S. District Court Preliminarily Enjoined EO 13950 Ban on “Divisive” D&I Training
• OFCCP Canceled Announced Focused Reviews on D&I
• OFCCP Has Also Stopped EO 13950 Complaint Investigations

On Tuesday, December 22, 2020, the United States District Court for the Northern District of California, San Jose Division, issued a nationwide preliminary injunction stopping enforcement of provisions in Executive Order 13950 that prohibited certain “divisive” workplace diversity training by federal contractors and federal grant recipients as a condition of receiving federal funding.

The court case is Santa Cruz Lesbian and Gay Community Center d/b/a the Diversity Center of Santa Cruz, et al., Plaintiffs, v. Donald J. Trump. The decision, while only a “preliminary” injunction, good only through trial, nonetheless set off an immediate chain of events at the USDOL and OFCCP.  The Department and OFCCP were not happy that The White House had saddled them with an Executive Order, some parts of which were clearly violative, on their face, of the First Amendment. As a result, OFCCP moved quickly to shut down the entirety of the EO 13950 program it had been enforcing.

First, OFCCP Director Craig Leen publicly reported that the agency’s recently announced focused reviews on D&I training were canceled even before their deployment next year.

Second, Director Leen then further announced that OFCCP had decided to convert the focused reviews on D&I training to focused reviews on Affirmative Action Outreach. OFCCP has not yet had time, of course, to even produce a draft focused review on D&I training audit Scheduling Letter for the Office of Management and Budget (OMB) to review, let alone rebound already and produce a draft audit Scheduling Letter for Affirmative Action Outreach. Such a Scheduling Letter will undoubtedly wait for the new OFCCP Director, once announced and on-board, to first decide whether to even continue with focused reviews and, if so, whether to continue with a focused review on Affirmative Action Outreach.

Third, Director Leen publicly announced that OFCCP had stopped all EO 13950 Complaint investigations. OFCCP will presumably dismiss and administratively close all such Complaints. There are two open questions then remaining: (1) do any of the remaining Complaints provide OFCCP with jurisdiction pursuant to EO 11246 (not pursuant to EO 13950); and if so (2) how will OFCCP proceed to investigate and resolve them? Oddly, no one at OFCCP seems to have yet sufficiently catalogued the approximately 200 Complaints which OFCCP has received in response to President Trump’s issuance of EO 13950 to know which ones, if any, trigger OFCCP’s EO 11246 jurisdiction (separate and apart from OFCCP’s previous jurisdiction under EO 13950). We expect news on that front in the coming days before Inauguration Day on January 20, 2021. (Many Republicans seem very interested to bury and finish the EO 13950 debacle before President-Elect Biden can be installed in office, rescind EO 13950 and then take a ceremonial “victory lap” for having vanquished this unpopular Executive Order).

As DE previously reported, Executive Order 13950 sought to control and limit the content of diversity and inclusiveness training a federal contractor or federal grant recipient could undertake in the workplace.  This included directing federal contracting officers to include new language in “Government contracts” prohibiting federal contractors from using any workplace training that enforced race or sexual stereotyping or “scapegoating,” requiring federal grant recipients to certify the content of any training programs offered to its employees, and establishing a “hotline” for reporting complaints that a federal contractor was violating EO 13950 and/or EO 11246.

Editor’s Note: Sections 4 (“Requirements for Government Contractors”) and 5 (“Requirements for Federal Grants”) of EO 13950 were so patently violative of the First Amendment right to free speech that it became clear that President Trump had used Executive Order 13950 to rally his conservative core political base in the moments before the election. Everyone in Washington knew the election was going to be very close and was going to hinge on voter turnout. Once the election was over, the utility of Executive Order 13950 dropped to near zero for The White House and may have even have been so divisive itself that it helped, in part, rally candidate Biden’s core political base to help drive his election victory.

Background

In response to Executive Order 13950, a group of non-profit community organizations and consultants, including the Santa Cruz Lesbian and Gay Community Center, Los Angeles LGBT Center, and the AIDS Foundation of Chicago, filed suit challenging the constitutionality of Executive Order 13950.  These Plaintiffs alleged that Executive Order 13950 required them, as advocacy groups speaking out about systemic bias and institutional racism, to censor or cease their trainings which the plaintiffs claimed were fundamental to their missions. Plaintiffs argued that the Executive Order violated the Free Speech Clause of the First Amendment and the Due Process Clause of the Fifth Amendment.

The Technical Legal Issues

Ruling on Plaintiffs’ Motion seeking a Preliminary Injunction, Judge Beth Labson Freeman concluded:

• Plaintiffs had legal “standing” to seek to enjoin enforcement as to Sections 4 and 5 of Executive Order 13950 pertaining to federal contractors and federal grant recipients;
• Plaintiffs were likely to prevail on their First Amendment claim as to federal contractor restrictions given that the at-issue training qualified as speech on a matter of public concern for which the government does not have adequate justification to suppress;
• Plaintiffs were likely to prevail on their First Amendment claim as to federal grant recipient restrictions since the conditioning of federal grants constituted a content-based restriction on protected speech and was overbroad in restricting speech unrelated to the purposes of the federal grant;
• Plaintiffs were likely to prevail on their Fifth Amendment claims as the prohibitions embodied in Sections 4 and 5 of the Executive Order were impermissibly vague such that a person of ordinary intelligence had no fair notice of what conduct was prohibited;
• Without issuance of an injunction, Plaintiffs would most likely suffer irreparable harm; and
• The public interest served by Plaintiffs and the potential adverse impact on them outweighed the government’s interest to enforce Executive Order 13950.

As a result of these determinations, Judge Freeman ordered the Executive Branch of the federal government to immediately stop enforcing Sections 4 and 5 of Executive Order 13950 nationwide.

For now, federal Contractors and federal grant recipients can put aside efforts to review existing diversity and inclusiveness training programs for compliance with Executive Order 13950.  Additionally, concerns about obtaining certifications of compliance are now no longer necessary.  For those limited number of federal contractors and federal grant recipients which have already signed federal contracts containing provisions obligating them to comply with Executive Order 13950, you may wish to go back to the government contracting officer which signed the contract on behalf of the federal government to seek removal of the offending provisions.

At this writing the United States Department of Defense has not yet rescinded its notice to DoD contracting officers requiring installation in DoD contracts of contract clauses implementing the provisions of EO 13950. Such a rescission will undoubtedly soon be forthcoming.

THIS COLUMN IS MEANT TO ASSIST IN A GENERAL UNDERSTANDING OF THE CURRENT LAW AND PRACTICE RELATING TO OFCCP. IT IS NOT TO BE REGARDED AS LEGAL ADVICE. COMPANIES OR INDIVIDUALS WITH PARTICULAR QUESTIONS SHOULD SEEK ADVICE OF COUNSEL.