Non-profit and for-profit federal contractors and grant recipients have been bracing for further guidance on Executive Order 14173 – “Ending Illegal Discrimination and Restoring Merit-Based Opportunity.” This order requires that agencies include terms in every contract or grant award that the counterparty or recipient certifies that it “does not operate any programs promoting DEI that violate any applicable federal anti-discrimination law.” There is no generally accepted definition of DEI though the certification requirement is directed to be put in place by late May.
Last week, the Equal Employment Opportunity Commission (EEOC) issued guidance on what may constitute illegal DEI in the context of employment available in its entirety here.
While the EEOC Guidance is not directly applicable to contractors or grant recipients in their contracting capacity, it does give some insight into practices the federal government may deem illegal. Illegal DEI includes “any employment action motivated – in whole or in part – by race sex, or another protected characteristic.” Any access to or exclusion from training, including leadership development may not include race or gender as a criterion. It is clear from the FAQ that race or sex cannot be a factor (even one among many) contributing to any employment related decisions.
Employer affinity groups may not include race, ethnicity or gender as criteria for membership or access. Companies may not allow any such groups to utilize the premises or facilities of the employer if membership in a protected class ( such as race, ethnicity or gender) is a factor for accessing the network or group.
In terms of what we may expect for federal contractors or grant recipients, the Office of Head Start published a copy of an email it sent to grant recipients last week – a copy is available here. OHS stated that no federal funding may be used to “promote or take part in diversity, equity, and inclusion (DEI) initiatives and cautioned grant recipients to “carefully review their annual fund application, including budget and budget justification narrative, TTA plans, program goals and any other supplemental materials to ensure they are in accordance with this change.”
While more information is needed to fully understand the EO requirements, it appears clear that affinity groups must be open to all and cannot take any action or provide any resources motivated in any part based on an individual’s protected characteristics, even if intended to promote diversity. It seems that even promoting the “idea” of diversity could violate the EO since to become diverse you must at least “in part” consider one’s race, gender or other protected characteristics. Certainly more guidance is needed and there are court battles in process. Non-profit and for profit businesses reliant on federal government funding should begin the work now to understand how they can reconcile their own mission and values with the new reality of this EO since it appears funding could be abruptly ended once these requirement become effective.
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This “D.O.N.E Talking” blog is written by :
Jennifer M.Boll — Legal Strategy
Harris Beach Murtha
Jennifer is a seasoned lawyer who works with nonprofit organizations to precisely navigate legal complexities, risk management, and board governance.
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