Executive Orders on Competition and DEI Issued

President Biden has signed an Executive Order on competition that includes provisions on worker non-compete clauses and an Executive Order to advance diversity, equity, inclusion, and accessibility (DEIA) in the federal government. President Biden also signed a resolution reversing an EEOC rule that changed the conciliation process. Legislation has been introduced in the House of Representatives that would ban private-sector employers from including any questions on applications asking applicants to disclose whether they have a criminal record.

Executive Order Promoting Competition Includes Labor Provisions – On July 9^th, President Biden signed the Promoting Competition in the American Economy Executive Order. The executive order addresses multiple issues and according to a fact sheet issued by the White House, the executive order is designed “to promote competition in the American economy, which will lower prices for families, increase wages for workers, and promote innovation and even faster economic growth.”

The executive order targets non-compete clauses, which the White House claims about half of the private sector requires employees to sign and which impacts an estimated 30 to 60 million workers. The executive order encourages the Federal Trade Commission (FTC) to ban or limit non-compete agreements.

The executive order also encourages the FTC to ban unnecessary licensing restrictions that it believes can prevent “worker mobility and suppress wages.” According to the fact sheet, almost 30% of US jobs require a license and less than 5% of “occupations that require licensing in at least one state are treated consistently across all 50 states.” This can make it more difficult to move between states.

Additionally, the executive order encourages the FTC and Department of Justice to “strengthen antitrust guidance to prevent employers from collaborating to suppress wages or reduce benefits by sharing wage and benefit information with one another.” Under current guidance, the fact sheet notes that third parties can make wage data available to employers, but not to workers in certain circumstances and this can be used to collaborate to suppress compensation.

The executive order establishes a White House Office on Competition to coordinate follow-up and implementation.

President Issues DEIA Executive Order in the Federal Government

On June 25^th, President Biden signed an Executive Order to advance diversity, equity, inclusion, and accessibility (DEIA) in the federal government. The executive order establishes a government wide initiative to advance DEIA in federal hiring and employment. The Office of Personnel Management (OPM) and the Office of Management and Budget (OMB) will lead the initiative along with the White House and the Equal Employment Opportunity Commission (EEOC).

All federal agencies are directed to assess the current state of DEIA within their respective workforces and to develop plans to eliminate any barriers faced by underserved employees within 100 days. Other initiatives included in the executive order are:

• Directing agencies to establish or elevate Chief Diversity Officers to senior leadership positions.
• Expanding DEIA training for federal employees.
• Developing a governmentwide plan to address workplace harassment.
• Reducing the federal government’s reliance on unpaid internships, in which low-income students often are prevented from participating.
• Advancing pay equity to ensure that federal employees are fairly compensated based on their work and their talents. OPM is directed to consider taking steps to prohibit federal agencies from seeking or relying on an applicant’s salary history during the hiring process.
• Advancing equity in the workplace for individuals with disabilities and LGBTQ employees.
• Building a more diverse pipeline into federal employment through new recruitment partnerships.
• Expanding federal employment opportunities for previously incarcerated individuals.
• Advancing equity in professional development through the collection of demographic data about which employees can access professional development opportunities.
• Improving the collection of demographic data about the federal workforce so that agencies will be able to use the data to reduce inequitable barriers in hiring, promotion, professional development, and retention.

President Signs Bill Overturning Changes to the EEOC Conciliation Process – On June 30^th, President Biden signed a resolution passed by Congress under the Congressional Review Act to overturn a rule promulgated during the Trump Administration modifying the procedures by which the Equal Employment Opportunity Commission (EEOC) settled employment discrimination through conciliation. According to EEOC Chair Charlotte Burrows, “The action by Congress restores the Commission’s flexibility to tailor the conciliation process to the facts and circumstances of each case, thus increasing the likelihood of a successful resolution. EEOC is committed to resolving cases in conciliation whenever possible as one of the most effective means to remedy and prevent discrimination in the workplace.” The EEOC noted that it successfully conciliated 44% of cases in fiscal year 2020, recovering $38.8 million for victims of discrimination through conciliation.

The Congressional Review Act gives Congress the authority to pass legislation overturning regulations within 60 legislative days of when they were issued. The proposed rule which was approved by the EEOC in January 2021 went into effect in February. The rule increased the amount of information the EEOC would be required to give to employers during the conciliation process. Among the information that EEOC would be required to disclose included: the legal analysis of the case, potential damages, any non-privileged exculpatory facts favoring the employer, and whether it planned to bring a systemic or class action lawsuit.  

Ban the Box Bill Introduced in the House - Representative David Trone (D-MD) introduced the Workforce Justice Act (H.R. 1598). The bill would give states three years to remove from private-sector employment applications questions asking applicants to disclose whether they have a criminal record. Employers also would be prohibited both from inquiring about a criminal record or conducting a criminal background check prior to a conditional employment offer. States that did not comply could lose some federal criminal justice funding. The bill has been referred to the Judiciary Committee whose chair, Representative Maxine Waters (D-CA) is a cosponsor.

The Fair Chance to Compete for Jobs Act, which was included in the National Defense Authorization Act in December 2019, prohibits, effective December 2021, most federal agencies, and contractors from requesting information on the arrest and conviction records of job applicants until after making a conditional job offer. Additionally, 36 states, the District of Columbia, and over 150 local governments have adopted ban-the-box policies, so employers should check their state and local laws.

Neil Reichenberg is the former executive director of the International Public Management Association for Human Resources. He is an attorney, a frequent writer and speaker on public policy and human resource issues, and an adjunct faculty member at George Mason University. For questions or additional information, contact Reichenberg at neilreichenberg@yahoo.com.