Since banks are considered federal contractors for purposes of Affirmative Action Plans, are banks subject to the Presidential Executive Order on “Combating Race and Sex Stereotyping” in training programs?

A federal district court has granted a nationwide preliminary injunction blocking the enforcement of the Presidential Executive Order on “Combating Race and Sex Stereotyping” (Executive Order 13950) with respect to the requirements for government contractors. Consequently, although financial institutions with federal share and deposit insurance arguably should be considered “government contractors” under Executive Order 13950, this order is not currently enforceable.

For resources related to our guidance, please see:

Executive Order 13950 (“Sec. 4. Requirements for Government Contractors. (a) Except in contracts exempted in the manner provided by section 204 of Executive Order 11246 of September 24, 1965 (Equal Employment Opportunity), as amended, all Government contracting agencies shall include in every Government contract hereafter entered into the following provisions: ‘During the performance of this contract, the contractor agrees as follows . . . . The contractor shall not use any workplace training that inculcates in its employees any form of race or sex stereotyping or any form of race or sex scapegoating. . . .’”)

Order Granting in Part Plaintiff’s Motion for a Nationwide Preliminary Injunction, Santa Cruz Lesbian & Gay Community Center v. Trump, No. 20-cv-07741-BLF, Document 80 (N.D. Cal. Dec. 22, 2020) (“Plaintiffs’ motion for a nationwide preliminary injunction enjoining all Defendants, except President Trump, from enforcing Executive Order No. 13950 is GRANTED IN PART as to Sections 4 and 5, and otherwise is DENIED.”)

Order Granting in Part Motion for Nationwide Preliminary Injunction, Santa Cruz Lesbian & Gay Community Center v. Trump, No. 20-cv-07741-BLF, Document 81 (N.D. Cal. Dec. 22, 2020) (“Specifically, Defendants, . . . With regard to Section 4(a)(1), shall not insist on, impose, or include provisions in any government contract or subcontract requiring that contractors or subcontractors not use workplace trainings that involve the concepts set forth in Section 4(a)(1) of the Executive Order and agency guidance anticipating or implementing the Executive Order, including OMB Memorandum M-20-34, OMB Memorandum M-20-37, Department of Labor FAQs dated October 7, 2020, and Department of Labor Request for Information dated October 22, 2020; and shall not enforce any such provisions contained in government contracts or subcontracts to the extent that those provisions have already been included . . .”)

OFCCP, Jurisdiction FAQs (“Financial institutions with federal share and deposit insurance are considered to be government contractors within the meaning of the regulations implementing Executive Order 11246 . . . The implementing regulations for Executive Order 11246 at 41 CFR 60-1.3 have consistently defined a government contract as any agreement or agreement modification between any contracting agency and any person for the purchase, sale or use of personal property or nonpersonal services.”)

OFCCP, Executive Order 13496 FAQs (“A bank or other financial institution is a covered contractor if it has an arrangement that meets the definition of a ‘government contract.’ In general, OFCCP interprets ‘government contract’ under Executive Order 13496 as it has under Executive Order 11246. Thus, a bank or other financial institution that obtains federal deposit insurance, acts as an issuing and paying agent for U.S. savings bonds and notes, or is a federal fund depository is a government contractor for purposes of both Executive Order 11246 and Executive Order 13496. In addition, these entities may be covered contractors if they have any other arrangement that meets the definition of a “government contract” under the regulations. Such entities are subject to Executive Order 13496 to the same extent as are other federal contractors.”)