State Department’s Proposed Foreign Assistance Nondiscrimination Requirements Raise Concerns

Published February 22, 2024

The Federalist Society

On January 19, 2024, the U.S. Department of State issued two notices of proposed rulemaking (NPRMs) that would establish nondiscrimination requirements in foreign assistance. The first for award recipients and subrecipients (Nondiscrimination in Foreign Assistance, RIN 1400-AF66), and the second for contractors and subcontractors (Department of State Acquisition Regulation: Nondiscrimination in Foreign Assistance, RIN 1400-AF65). The Department is accepting written public comments on its proposals here and here until March 19.

Nondiscrimination Requirements

The two NPRMs would impose a new “award term” and “contract clause,” respectively, to all State Department foreign assistance solicitations, awards, and contracts. The proposed term and clause would prohibit recipients and contractors from discriminating “on the basis of race, ethnicity, color, religion, sex, gender, sexual orientation, gender identity or expression, sex characteristics, pregnancy, national origin, disability, age, genetic information, indigeneity, marital status, parental status, political affiliation, or veteran’s status.”

Prohibited discrimination explicitly includes “withholding,” “denying,” or “adversely impacting” “equitable access” to federally funded foreign assistance benefits, supplies, or services. State does not define the term “equitable access,” and it is unclear whether it means equal opportunity access or something else.

This prohibition would apply to both beneficiaries and employees “who [are] or will be engaged directly in the performance” of the award or contract and whose work will be funded or subsidized “in whole or in part” by State foreign assistance funds “unless expressly permitted by applicable U.S. law.” Recipients and contractors would be required to provide notice of the nondiscrimination requirement to beneficiaries and employees.

Notably, the NPRMs would prohibit discrimination based on “sex,” as well as “gender,” “gender identity or expression,” and “sex characteristics.” State does not define these terms, and it is unclear whether they are distinct or overlapping bases. State likewise does not define discrimination based on “pregnancy” but, consistent with the Biden administration’s pro-abortion policies, will likely interpret the term to include abortion and contraception.

Possible Waiver and Religious Employment

Both NPRMs permit a waiver of the nondiscrimination requirements for employees if “it is determined to be in the best interest of the U.S. government.” Waiver determinations “will take into account the totality of the circumstances, including, but not limited to, whether the waiver is requested as an accommodation to comply with applicable foreign laws, edicts, or decrees.”

Without any discussion in the preamble, the regulations for contractors also contemplate permitting a waiver “to allow a religious corporation, association, educational institution, or society to employ individuals of a particular religion to carry out the activities under the award in a manner consistent with its religious beliefs.” This language is reminiscent of (though not identical to) Title VII’s religious organization exemption. Title VII is the federal civil rights law that prohibits discrimination in employment on the basis of race, color, religion, sex, and national origin. Unlike Title VII’s exemption, however, the waiver of nondiscrimination requirements for employees of a religious contractor is merely permitted, not required.

It is unclear why the regulations for award recipients do not also contemplate a waiver for religious organizations to make employment decisions based on their religion. The proposed nondiscrimination requirements will conflict with many award recipients’ religious beliefs about life, marriage, gender, and sexuality.

State’s nondiscrimination requirements must comply with its obligations to respect religious exercise under the First Amendment and the Religious Freedom Restoration Act. In Fulton v. City of Philadelphia, the Supreme Court made clear that exemptions (such as a waiver) to a nondiscrimination requirement make the requirement not “generally appliable” and thus subject to strict scrutiny. As Justice Neil Gorsuch wrote in another case, “Fulton explains strict scrutiny demands ‘a more precise analysis’”: the question “‘is not whether the [government] has a compelling interest in enforcing its [requirement] generally, but whether it has such an interest in denying an exception’ from that requirement to the [affected party] specifically.” Here, State’s “general interest” in nondiscrimination requirements is not compelling without reference to the specific application of those requirements to a particular recipient or contractor.

Authority and Need for Rulemaking

The purpose of the NPRMs is to “ensure effective implementation of foreign assistance programs consistent with U.S. foreign policy and the purposes of the [Foreign Assistance Act of 1961 (FAA)],” which provides that: “Congress reaffirms the traditional humanitarian ideals of the American people and renews its commitment to assist people in developing countries to eliminate hunger, poverty, illness, and ignorance.” State explains it can achieve this purpose by imposing the proposed nondiscrimination requirements.

The Secretary of State has “broad discretion” under the FAA to set terms and conditions for the provision of foreign assistance. Both political parties use this broad discretion to impose terms and conditions that promote the current administration’s policy priorities. Any term or condition, however, must be consistent with the U.S. Constitution and federal law.

 In support of its proposals, State cites three executive orders: (i) E.O. 13985 on “Advancing Racial Equity and Support for Underserved Communities Through the Federal Government”; (ii) E.O. 14091 on “Further Advancing Racial Equity and Support for Underserved Communities Through the Federal Government”; and (iii) E.O. 13563 on “Improving Regulation and Regulatory Review,” which added “equity, human dignity, [and] fairness” as important considerations for agency rulemaking.

Equity and Inclusion

The NPRMs repeatedly focus on equity and inclusion in foreign assistance, noting that the Department is “embedding equity across its foreign affairs work.” According to State, nondiscrimination “advances U.S. foreign policy by ensuring that U.S. foreign assistance is inclusive and equitable by reaching all intended beneficiaries and efficiently accomplishing its intended objectives.” Equity and inclusion are “critical to achieving effective, comprehensive, and sustainable foreign assistance,” and the proposed nondiscrimination requirements are “essential in . . . ensuring equitable access” to foreign assistance and “send a strong signal to people around the world that equity and inclusion are values that the United States takes seriously.”

Benefits and Costs

The NPRMs are “significant regulatory action[s]” necessitating regulatory impact analysis of the proposals’ benefits and costs.

According to the NPRMs, their benefits include promoting nondiscrimination in State foreign assistance programs, which purportedly “promotes programmatic efficiency,” and “expressly reinforcing notions of equity, fairness, and human dignity.” These benefits are realized by (1) ensuring solicitations, awards, and contracts clearly provide notice of the nondiscrimination requirement; (2) avoiding costs of evaluating proposals by those “who are unwilling to provide” foreign assistance to all intended beneficiaries or recipients; and (3) helping ensure that foreign assistance reaches the intended beneficiaries or recipients and is “not undermined by discriminatory exclusion.” State fails to cite a single example of a recipient or contractor that is unwilling to provide foreign assistance to all intended beneficiaries and recipients, or a beneficiary or recipient who did not receive foreign assistance based on discriminatory exclusion.

The NPRMs identify costs associated with the creation of policies and procedures, implementation, training, and “potential changes in hiring practices for certain employees.” However, State fails to consider the harms to religious recipients and contractors (both domestic and foreign partners), as well as the beneficiaries they assist, if they can no longer provide foreign assistance because they are unable to make employment decisions based on religion.

According to a February 7 letter to Secretary of State Antony Blinken by Senator Marco Rubio and eight other Senators, the State Department “contemplates a future in which bureaucrats at the State Department can force a socially progressive worldview on partners in strategically vital regions.” Additional costs identified by the senators include State “violat[ing] the rights and beliefs of faith-based partner organizations and their beneficiaries, undermin[ing] relationships with key stakeholders, and threaten[ing] U.S. security interests.”

Rachel N. Morrison is a Fellow at the Ethics and Public Policy Center, where she directs EPPC’s HHS Accountability Project. An attorney, her legal and policy work focuses on religious liberty, health care rights of conscience, the right to life, nondiscrimination, and civil rights.

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