Mark Pestronk
Q: One of our agency's areas of expertise is travel management for government contractors, such as consulting firms. They classify us as a subcontractor, so in the past we had to fill out various government forms attesting to our status as a woman-owned business and the like. I understand that the federal government has repealed all rules and policies on affirmative action and outlawed programs promoting diversity, equity and inclusion (DEI). Now, I have a bunch of questions. Does the anti-DEI policy apply to us as a subcontractor?
A: Yes, it does. It applies to all federal agencies, contractors and subcontractors.
Q: We need to understand exactly what DEI means so that we don't do anything illegal. How does the government define it?
A: That's an excellent question because there is no governmentwide definition of DEI. The president's executive order isn't clear on what the term "programs promoting DEI" means, though it refers to "preferences," "mandates" and "workforce balancing" as potentially prohibited actions. The Justice Department's memorandum states that the term covers "programs, initiatives or policies that discriminate, exclude or divide individuals based on race or sex."
Q: Are federal government contractors still allowed to give preference to woman-owned or minority-owned travel agencies in awarding subcontracts?
A: Under the president's order, federal agencies are directed not to implement contracting and hiring preferences based on gender, race, religion, national origin or ethnicity. If a contractor retains any such policies, it risks not getting paid, and whistle blowers can file complaints with the government. The only exceptions are preferences for veterans and the disabled.
Q: Aren't there statutes that give preferences to minorities and woman-owned businesses?
A: Yes, and executive orders cannot overrule or supersede statutes. However, it appears that those statutes will not be enforced.
Q: If our agency obtained a subcontract because we are woman-owned, is it illegal for the prime contractor to renew our subcontract?
A: It is probably not illegal if the prime contractor can justify renewal on other grounds, which should not be difficult if you were doing a good job. However, I say "probably" because no one knows for certain at this time.
Q: Hasn't there been a court case striking down the president's order?
A: Yes, a federal judge issued an injunction last year, but in early February, the U.S. Court of Appeals let the new order go into effect.
Q: What if we are also a state subcontractor in a state that still has laws requiring affirmative action programs? How can we comply with both federal and state laws?
A: That's yet one more good question. Some states do require affirmative action programs. For example, a New York law states, "The director shall promulgate rules and regulations to ensure that contractors and subcontractors undertake programs of affirmative action...." So it is certainly difficult to see how you can comply with both state and federal laws, at least at the present time. My advice is to consult a good employment law attorney in your state.