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New executive order bars LGBT discrimination and requires affirmative action by federal contractors, expands federal employee coverage to include gender identity

July 21st, 2014  |  Cynthia L. Hackerott

Despite protections in some states and localities, “in too many states and in too many workplaces, simply being gay, lesbian, bisexual or transgender can still be a fireable offense,” President Obama said during a ceremony on Monday, July 21, 2014, where he signed an executive order (EO) banning discrimination against LGBT employees by federal contractors. The new EO amends the existing EO 11246 to add sexual orientation and gender identity to the list of categories of federal contractor employees protected from discrimination and also to the list of categories of employees in regard to which covered federal contractors must take affirmative action to ensure equal employment opportunity. It also amends the existing EO 11478 to ensure that federal employees, who are already protected on the basis of sexual orientation, are now formally protected from discrimination based on gender identity as well. Of note, the new EO does not contain any exemption for religious organizations beyond that made by President George W. Bush in 2002 that allows religiously affiliated contractors to favor individuals of a particular religion when making employment decisions.

“This is not speculative, this is not a matter of political correctness — people lose their jobs as a consequence of this. Their livelihoods are threatened, their families are threatened,” the President remarked. “In fact, more states now allow same-sex marriage than prohibit discrimination against LGBT workers. So I firmly believe that it’s time to address this injustice for every American.”

Federal worker coverage. EO 11478, issued by President Nixon in 1969, bars discrimination against federal employees on the basis of race, color, religion, sex, national origin, disability, and age, and was amended by President Clinton in 1998 through EO 13087 to include sexual orientation. President Obama’s new EO now adds gender identity to the list of protected categories in EO 11478.

Employees of federal contractors. President Lyndon B. Johnson issued the initial version of EO 11246 in September 1965. The order prohibits federal contractors and federally-assisted construction contractors and subcontractors, with more than $10,000 in government contracts annually, from discriminating in employment decisions on the basis of race, color, religion, sex, or national origin, and the new EO adds sexual orientation and gender identity to that list of protected categories. EO 11246 does not affect grants, and the new EO does not impact the administration of federal grants.

LGBT affirmative action requirement. In addition to its non-discrimination provisions, EO 11246 also requires covered federal contractors to “take affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to their race, color, religion, sex or national origin.” The new EO — in Section 2, paragraph (b) — adds sexual orientation and gender identity to that list. Some commentators had speculated that, in order to ward off potential legal challenges, the new EO would only prohibit discrimination, and not require affirmative action, on the basis of sexual orientation and gender identity. Although clearly included in the new EO, the affirmative action component was not specifically noted in either the corresponding White House “Fact Sheet” or the President’s remarks at the signing ceremony.

No further religious exemption. In December 2012, President George W. Bush signed EO 13279, which amended Section 204 of EO 11246 to provide that a government contractor that is a “religious corporation, association, educational institution, or society” is exempt from the bar on religious discrimination in Section 202 of EO 11246 “with respect to the employment of individuals of a particular religion to perform work connected with the carrying on by such corporation, association, educational institution, or society of its activities.” The language of this exemption mirrors the language in Title VII that exempts religious organizations from Title VII’s bar on religious discrimination (See Title VII, Section 702 (42 USC §2000e-1)). Nevertheless, religious organizations that are government contractors subject to the requirements of EO 11246 are still required to comply with the other nondiscrimination and affirmative action rules set forth in EO 11246.

In the wake of last month’s Supreme Court ruling in Burwell v Hobby Lobby Stores, Inc — where the Court held that the Affordable Care Act’s contraceptive coverage regulations violate the religious rights of closely held private corporations — some advocates feared that the new EO might contain a sweeping religious exemption. However, the new EO does not allow for any further exemption for religious entities beyond the one added by President George W. Bush.

The White House “Fact Sheet” on the new EO notes also that: “under the First Amendment, religious entities are permitted to make employment decisions about their ministers as they see fit.”

Lack of federal legislation. “Currently, 18 states have already banned workplace discrimination based on sexual orientation and gender identity. And over 200 cities and localities have done the same,” the President noted during the signing ceremony. However, there is no federal law that protects employees working outside the federal government against discrimination in the workplace on the basis of sexual orientation or gender identity.

“Congress has spent 40 years — four decades  — considering legislation that would help solve the problem” but has still failed to pass such legislation, the President observed. Most recently, on November 7, 2013, the Employment Non-Discrimination Act (ENDA), a bill that would bar employment discrimination based on actual or perceived sexual orientation or gender identity, cleared the Senate with a bipartisan 64-32 vote. Yet, soon after, House Speaker John Boehner stated that he will not bring the bill up for a vote in the Republican-controlled House of Representatives.

“But I’m going to do what I can, with the authority I have, to act,” the President stated. “The rest of you, of course, need to keep putting pressure on Congress to pass federal legislation that resolves this problem once and for all.”

Effective dates and implementing regulations. The Labor Department’s OFCCP enforces EO 11246. Section 3 of the new EO specifically requires the department to, within 90 days of the order, “prepare regulations to implement” the changes to EO 11246, and Section 5 of the new EO provides that these changes will apply to contracts entered into on or after the effective date of the finalized regulations. However, due to the notice and comment requirements of the federal regulatory process, it will likely take at least six months for the OFCCP to finalize these regulations.

In contrast, the new EO provides that the changes to EO 11478 protecting federal employees from discrimination on the basis of gender identity will take effect immediately. EO 11478 states that the EEOC is responsible for directing and furthering the implementation of the policy contained therein.

Order long anticipated. As previously reported in Employment Law Daily and on this blog, speculation about a LGBT executive order has been in the press since at least early 2012. At that time, LGBT news publications began to report that the Obama Administration was considering expanding EO 11246 to include sexual orientation and gender identity. However, White House Press Secretary Jay Carney had maintained since April 2012 (when the Obama Administration publicly addressed the issue for the first time) that no such order was forthcoming and — until last month — Carney and his successor, Josh Earnest, repeatedly reiterated earlier statements that the President preferred legislative, rather than executive, action on this front.

However, the White House departed from that stance on June 16, 2014, when it announced via Twitter, and a White House official confirmed to Wolters Kluwer, that the President had directed his staff to prepare for his signature an executive order that prohibits federal contractors from discriminating on the basis of sexual orientation or gender identity. About two weeks later, on June 30, at the White House’s annual LGBT Pride Month reception, President Obama also announced his plans to sign an executive order protecting federal employees from discrimination on the basis of gender identity. The order signed on July 21 makes good on both of those promises.