Trump’s Executive Order put on hold

By: M. Jarrad Wright, DiMuroGinsberg P.C.

Just before Christmas, outgoing President Donald Trump’s controversial Executive Order (EO) banning federal contractors and subcontractors from offering “workplace training that inculcates in its employees any form of race or sex stereotyping or any form of race or sex scapegoating” hit a major roadblock. On December 22, 2020, California Federal District Court Judge Beth Labson Freeman granted a preliminary nationwide injunction prohibiting the EO from taking effect. The order was sought by a number of nonprofit community organizations and consultants serving the lesbian, gay, bisexual, and transgender community.

Injunction in place
In her order, Judge Freeman, an Obama appointee, found the groups seeking the injunction were likely to prevail at trial on their arguments that federal contractors’ free speech rights were being restricted. She acknowledged the government “has a legitimate interest in controlling the scope of diversity training in the federal workforce and can limit the expenditure of federal funds.” Nonetheless, she found the EO’s scope was overbroad because, as worded, it would prohibit contractors from using their own funds to train employees on matters that “potentially have nothing to do with the federal contract.”

While the nationwide injunction is in place, federal contractors are free to proceed in the normal course as long as the activity is covered by the court’s injunction. Although the Department of Justice has the right to appeal or seek modification of the order, it’s highly unlikely the appeal process could be completed before the presidential inauguration on January 20, 2021.

Spokespersons for the incoming Biden administration have already indicated the repeal of the diversity EO will occur early in his administration. Although President Trump hasn’t yet conceded, Congress has certified the election results, so Joe Biden will be sworn in as president on January 20, 2021.

Bottom line
As things now stand, it isn’t clear when repeal may occur. In the meantime, therefore, employers that have federal contracts or subcontracts should consult with experienced counsel and stay abreast of further significant legal developments in this area of the law.

Editor’s note: For an extended discussion of the EO and its implications, see M. Jarrad Wright’s article, “Trump’s Executive Order on diversity training creates new uncertainty for employers” in the December 2020 issue of Mid-Atlantic Employment Law Letter.

  1. Jarrad Wright is a partner at DiMuroGinsberg P.C. in Alexandria and can be reached