Government agencies and companies with federal contracts pause programs and cancel events, as business groups protest order

Some U.S. business groups are pushing back against a White House directive to limit racial-sensitivity training, which has caused confusion for some private businesses with federal contracts.Trade groups representing pharmaceutical makers, technology giants and advertising agencies have issued statements protesting President Trumps executive order. They say the order attacks free speech and undermines workplace equity. As they seek to understand the directive, some companies are putting diversity training on pause, while several federal agencies have canceled scheduled events.The executive order, issued on Sept. 22, prohibits federal agencies, companies with federal contracts, and recipients of federal grants from participating in training that promotes race or sex-stereotyping or scapegoating. The Trump administration threatens to suspend or cancel federal contracts with companies that violate the order.
Many major U.S. companies have federal contracts, and many universities and hospitals receive federal grants.
The president has elevated the debate about critical race theory and extended the fight across multiple institutions, said Christopher Rufo, a conservative researcher who says his writings on the issue helped spark the White Houses interest.
Critical race theory, developed several decades ago in law schools, says racism is embedded in U.S. institutions and hasnt been eradicated by changes of laws. The academic field relates to topics that are discussed in diversity training like bias, but the theory itself is rarely discussed, according to people who create diversity trainings.
In the presidential debate last week, Mr. Trump said he signed the order because they were teaching people that our country is a horrible place, its a racist place. And they were teaching people to hate our country. And Im not gonna allow that to happen.
Steve Bucherati, the former chief diversity officer at Coca-Cola Co. and now a diversity consultant, said, Clearly the administration doesnt understand the purpose or value of diversity training, and that its intended outcomes are to create greater understanding and more inclusive, fair and equitable workplaces.
Diversity training programs have been offered for decades by public and private employers alike. And some have increasingly focused on topics like anti-racism and white privilege following protests sparked by the police killing of George Floyd, a Black man, in May, diversity professionals say.
Many companies and government agencies have been scheduling listening sessions and other optional events for employees to share their feelings on these issues.
A Sept. 28 memo from Russell Vought, director of the Office of Management and Budget, encouraged federal agencies to review diversity training with the terms critical race theory, white privilege, intersectionality, systemic racism, positionality, racial humility, and unconscious bias.
Contractors are concerned and confused, said Jim Paretti, a partner at employment law firm Littler Mendelson and a former chief of staff at the Equal Employment Opportunity Commission. The government has never before tried to regulate the content of companies diversity training, he said, adding that his firm has received dozens of calls from clients with questions about the order.
At first, Littler believed the changes wouldnt go into effect for 60 days. But last week, the agency overseeing federal contractors launched a hotline for workers to report their companies for potentially violating the order.
Democratic presidential nominee Joe Biden and President Trump traded barbs over how each of them has dealt with issues of race. The president was asked if he was willing to condemn white supremacist and militia groups and call for them to not incite violence. Photo: Olivier Douliery/Associated Press (Originally Published September 28, 2020)
A spokesman for the Labor Department agency said it is enforcing the order and is already reviewing complaints and inquiries sent in through the hotline. The agency will also be publishing FAQs soon.
The same agency also sent a letter to
Microsoft Corp.
last week asking whether the software makers pledge to hire more Black managers and senior leaders constitutes unlawful discrimination. Microsoft said its diversity initiative doesnt violate U.S. employment laws.
Rosa Clemente, a public speaker and activist, said she was scheduled to speak at the National Credit Union Administration, a federal agency, last week. Less than 24 hours before the talk, she got word that her presentation would be canceled after the staff reviewed her PowerPoint presentation, which she said made references to white supremacy and racial capitalism.
This wasnt a training, Ms. Clemente said. It was a 45-minute conversation for Hispanic Heritage Month.
The National Credit Union Administration confirmed Ms. Clementes account. A spokeswoman said the agency is reviewing the recently issued executive order and OMB memos.
Joelle Emerson, chief executive of Paradigm Strategy Inc., which provides diversity courses to companies, said her clients are also trying to figure out whether they are in compliance with the executive order. One government contractor decided not to move forward with training supplied by her firm because of the order, she said.
Our training doesnt actually violate the executive order, said Ms. Emerson, but the order is leading organizations to be confused and as a result pause all of their plans.
The executive order quotes materials used at different agencies that it says are pushing divisive concepts. The examples draw from Mr. Rufos writings, including a recent seminar organized by the U.S. Treasury that he cited in a New York Post column. Mr. Rufo later wrote an opinion article for The Wall Street Journal, arguing that these training sessions arent about racial sensitivity but are about an ideological agenda.
Howard Ross, the diversity consultant who participated in the Treasury seminar, said his training and events focus on teaching empathy and creating a culture of belonging. “We dont demonize any particular group, and in fact, it would be ludicrous for me to demonize white men. Im a white man, he said.
He said the Treasury seminar was optional and also featured Johnnetta Cole, the former president of Spelman College, as a speaker. He said a diversity office at the Treasury invited them after Mr. Floyds killing because white leaders were asking for ways to support their Black colleagues. A spokeswoman for the Treasury declined to comment.
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