When President Trump issued a new executive order that regulates diversity training among federal contractors, he unleashed a firestorm of protest from civil rights activists and other social advocates. That executive order also provoked a rare but strong critique from the U.S. Chamber of Commerce, in the form of a public letter to the president.
The letter describes how the September executive order creates bottom line headaches for U.S. companies, but more interesting from a corporate responsibility perspective is the importance it places on diversity training in a civic landscape characterized by a diverse population and more global interaction.
The order followed on the heels of a months-long, nationwide series of protests in support of the Black Lives Matter movement, which gained renewed force over the murder of an unarmed Black man, George Floyd, at the hands of uniformed police officers in Minnesota.
Responding to the massive public outpouring of support for equal justice and equal protection, many U.S. firms pledged their own support for the movement in various forms. That included improvements in diversity training, with a focus on unconscious bias and structural racism in the U.S.
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Despite attempts by certain politicians and pundits to undermine the message of Black Lives Matter activists, the protests still continue and the movement has maintained popularity with large segments of the U.S. public.
Nevertheless, instead of supporting the efforts of the business community to respond to public sentiment, on September 22 the president undercut the ability of federal agencies and contractors to offer comprehensive, meaningful diversity training.
Specifically, the order aims to prevent something it calls “offensive and anti-American race and sex stereotyping,” mainly by banning the discussion of unconscious bias and structural racism in diversity training.
With its emotion-stirring references to “anti-American,” onerous stipulations, vague terminology and a built-in employee complaint hotline, the new order all but follows the career-destroying “red scare” playbook deployed by U.S. Senator Joe McCarthy in the 1950s.
Aside from that, the new order creates significant new regulatory burdens on U.S. businesses. However, the business community was curiously silent in the wake of the new order - until last week, that is.
The U.S. Chamber of Commerce outlined the business case against the new order in a blistering public letter dated October 15, co-signed by a group of 150 local Chambers of Commerce, other commercial organizations, and non-profit groups.
From a bottom-line perspective, the letter draws particular attention to the confusion over standards resulting from the order’s reliance on subjective, ambiguous language.
That includes confusion over what content is actually permitted and what is excluded, as well as the more complicated matter of handling variations in the perceptions of individual employees.
“Because of the ambiguity and subjective nature of the key terms that define what training materials are not allowed, whether the training material in question is compliant could very well depend on the outlook of the person filing the complaint,” the Chamber observes.
The ambiguity effect could become especially burdensome for multinational companies that have federal contracts, because the order provides no guidance on diversity training for employees outside of the U.S.
Even if guidance on that point becomes available, the Chamber notes that additional guidance is needed to address circumstances under which the order conflicts with another country’s training mandates.
Employee relations also factor into the Chamber’s analysis of the complaint hotline embedded in the new order.
“Employers are concerned that this will invite non-meritorious complaints from employees who may be disgruntled about a range of different matters,” the Chamber writes.
Because the order sets vague parameters for filing a complaint, the Chamber also notes that an employee could touch off a burdensome investigation simply by reporting a discussion between attendees at a training session, even though the conversation is not part of the official presentation.
In addition to these direct bottom line issues, the Chamber also calls attention to the foundational role of diversity training in the modern business environment.
“…The E.O. is already having a broadly chilling effect on legitimate and valuable D&I training companies use to foster inclusive workplaces, help with talent recruitment, and remain competitive in a country with a wide range of different cultures,” the Chamber writes, referring to reports that some U.S. companies have suspended diversity training altogether in the wake of the new order.
The race for top talent already factors strongly into the race for top dollars. Companies that fail to foster a diverse and inclusive environment will find themselves falling behind, especially those involved in fields that are also vulnerable to broader shifts in brand reputation.
The letter rounds off with a sharp poke at the president’s penchant for using executive orders to circumvent the law.
The Chamber accuses the September order of pursuing the same kind of social engineering that the Chamber found highly objectionable during the Obama administration.
“Such an approach effectively creates two sets of rules, one for those companies that do business with the government and another for those that do not,” the Chamber writes. “Federal contractors should be left to manage their workforces and workplaces with a minimum amount of interference so long as they are compliant with the law.”
That emphasis on compliance with the law is especially forceful during the 2020 election cycle, in which the diversity and inclusion stakes have been so clearly defined by the behavior of the president over the past four years.
Although the message ends with a commitment to work with the president to overcome their objections, the Chamber’s overall message is clear. On Election Day, business leaders who value diversity training have an opportunity to cast their vote in favor of legislators who support a level playing field for all companies.
Image credit: Chris Montgomery/Unsplash
Tina writes frequently for TriplePundit and other websites, with a focus on military, government and corporate sustainability, clean tech research and emerging energy technologies. She is a former Deputy Director of Public Affairs of the New York City Department of Environmental Protection, and author of books and articles on recycling and other conservation themes.
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