Business Groups Urge Trump to Withdraw Order on Diversity Training

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More than 150 business and nonprofit groups, including the U.S. Chamber of Commerce, are asking President Trump to withdraw his executive order that puts a limit on some diversity training.

In a letter sent to the White House Thursday, the groups said that the order creates confusion, leads to unnecessary investigations and hinders employers from combating workplace discrimination.

The group said the order “is already having a broadly chilling effect on legitimate” diversity training and its ambiguity could lead to unwarranted complaints and investigations.

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.

A senior administration official defended the order on Thursday, referring to the training at issue as “indoctrination sessions” that force some people to apologize “for the color of their skin.”

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.” The agency overseeing federal contractors in late September launched a hotline for workers to report their companies for potentially violating the order.

Employers are concerned that the hotline “will invite nonmeritorious complaints from employees who may be disgruntled about a range of different matters,” Thursday’s letter to the White House said. The hotline had received around 60 calls as of late last week, according to a person with knowledge of the situation.

A Labor Department spokeswoman said the agency overseeing the hotline “has experience handling complaints for many years, will provide due process, and will only seek remedies or compliance on complaints that are meritorious.” It also posted online a set of frequently asked questions about the order in an effort to try to clear up confusion.

The spokeswoman pointed to a speech that Labor Secretary Eugene Scalia made this week at Franciscan University of Steubenville in which he said: “The president’s order does not prohibit trainings about pre-conceptions or biases that people may have—regardless of their race or sex—about people who are different, and which could cause slights or even discrimination that’s not intended. What the order does prohibit, though, is instruction in which federal contractors tell workers that because of their particular race or sex, they are racist, morally culpable, or less worthy of being heard.”

Diversity training programs have been offered for decades by public and private employers alike. Many have increasingly focused on topics like “antiracism” and “white privilege” after protests sparked by the police killing of George Floyd, a Black man, in May, diversity professionals say.

Some companies have been putting their training sessions on pause as they seek to understand the order, while government agencies have been canceling speaking events. One diversity consulting firm said it was changing keywords like “privilege” and “white” to alternatives like “advantage” and “light-skinned” to help clients resume their training.

Earlier this month,

Microsoft Corp.

and

Wells Fargo

& Co. said they were contacted by the Labor Department and questioned about plans to hire more Black employees and managers as part of their diversity efforts. The companies have until the end of the month to respond; both said that they are confident their diversity initiatives comply fully with all U.S. employment laws.

Black employees represent about 4.5% of Microsoft’s U.S. workforce and less than 3% of senior roles, while at Wells Fargo, Black employees are currently 6% of senior management, according to company disclosures. That compares with about 13% of the U.S. population.

On Wednesday,

Starbucks

said it would mandate antibias training for executives and tie their compensation to increasing minority representation in its workforce, despite the new rules and inquiries.

Separately on Thursday, the Business Roundtable, a group of leaders from about 200 of the largest U.S. companies, said it would endorse several initiatives aimed at closing the economic opportunity gap in communities of color. It vowed to disclose more information about the racial diversity of workforces and leadership ranks and to conduct regular pay-equity reviews, in addition to other measures.

“The racial inequities that exist for many Black Americans and people of color are real and deeply rooted,” said Doug McMillon, the chief executive of

Walmart Inc.

and chairman of the Business Roundtable. “It is our employees, customers and communities who are calling for change, and we are listening—and most importantly—we are taking action.”

The CEO group endorsed expanding their work with historically Black colleges and universities, which produce a quarter of all Black college graduates, and said it would set up a mentorship program for Black and Latino small -business owners. It urged Congress to provide more federal funding for early literacy programs and pre-K education and reiterated the roundtable’s support for raising the federal minimum wage, though it didn’t specify an amount.

The roundtable said its corporate members are expanding their support for community-lending institutions, which largely provide funds for Black households and small businesses and pledged $1 billion of support by 2025.

The group also called on companies to voluntarily disclose more key diversity metrics at their businesses. While large corporations have in recent years, and particularly in 2020, made pledges to support racial equity and diversify their own workforces, their track records have been mixed.

Among U.S. companies with 100 or more employees, Black people hold just 3% of executive or senior-level roles, according to Equal Employment Opportunity Commission data. People of color and women say they continue to encounter stereotypes, disrespect and other obstacles in the workplace.

Write to Khadeeja Safdar at [email protected] and Lauren Weber at [email protected]

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