About Us  |  About Cheetah®  |  Contact Us

Final OFCCP rule on LGBT Executive Order regulations released

By Cynthia L. Hackerott, J.D.

The OFCCP announced its final rule on regulations to implement an Executive Order (EO) signed this summer by President Obama which bans discrimination against LGBT workers by federal contractors. The final rule revises the OFCCP’s regulations at 41 CFR Parts 60-1, 60-2, 60-4, and 60-50. It does not require contractors to conduct any data analysis with respect to the sexual orientation or gender identity of their applicants or employees and it does not require contractors to collect any information about applicants’ or employees’ sexual orientation or gender identity. However, it does not prohibit contractors from asking applicants and employees to voluntarily provide this information, although doing so may be prohibited by state or local law. In any event, the rule prohibits contractors from using any information gathered to discriminate against an applicant or employee based on sexual orientation or gender identity.

The rule is slated for publication in the Federal Register on December 5, 2014, and is scheduled to take effect 120 days thereafter. It will apply to covered contracts entered into or modified on or after that date.

The final rule and related information, including a FAQ, is available on the OFCCP’s website.

EO amendments. EO 13672 (79 FR 42971), issued on July 21, 2014, 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. Section 3 of EO 13672 specifically requires the Labor 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.

On October 20, 2014, the OFCCP sent to the Office of Budget and Management (OMB) its draft final rule on regulations to implement EO 13672. In its FAQ, the OFCCP explained there was not any notice and comment period prior to issuing the final rule because EO 13672 “was very clear about the steps the Department of Labor was required to take, and left no discretion regarding how to proceed. In such cases, principles of administrative law allow an agency to publish final rules without prior notice and comment when the agency only makes a required change to conform a regulation to the enabling authority, and does not have any discretion in doing so.”

Moreover, the OFCCP notes that this approach is consistent with agency precedent under other administrations, including in earlier changes to these same regulations. For instance, OFCCP proceeded to a final rule without first giving public notice and taking comment when EO 11246 was amended in 2002, when President George W. Bush signed EO 13279 to add a religious exemption to EO 11246.

Religious exemption. EO 13672 does not contain any exemption for religious organizations beyond that previously made by President Bush in December 2012, when he 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 regulation implementing that exemption is located at 41 CFR Part 60-1.5(a)(5). 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 Sec. 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.

Neither EO 13672 nor 41 CFR Part 60-1.5(a)(5) requires contractors to obtain pre-approval from the OFCCP to take advantage of the religious exemption. In the past, though, some contractors have submitted written requests for exemptions to OFCCP’s Division of Program Operations, explaining why they qualify for the exemption. Contractors can also invoke the exemption in connection with an OFCCP compliance evaluation, or when they enter into a covered contract or subcontract. OFCCP carefully considers each of these requests in coordination with the Solicitor of Labor.

In addition, the OFCCP’s FAQ notes that the Supreme Court has recognized that the First Amendment to the Constitution requires a “ministerial exception” from employment discrimination laws, which prohibits the government from interfering with the ability of a religious organization to make employment decisions about its “ministers,” a category that includes, but is not limited to, clergy.

First federal action to address private sector employment. While 18 states, the District of Columbia and many businesses, large and small, already offer workplace protections to lesbian, gay, bisexual and transgender employees, EO 13672 was the first federal action to ensure LGBT workplace equality in the private sector, the OFCCP’s announcement notes.

“We are building on the work of presidents and members of Congress from both parties who have expanded opportunities for America’s workers,” said OFCCP Director Patricia A. Shiu. “This rule will extend protections to millions of workers who are employed by or seek jobs with federal contractors and subcontractors, ensuring that sexual orientation and gender identity are never used as justification for workplace discrimination by those that profit from taxpayer dollars.”

“This isn’t just the right thing to do; it’s the profitable thing to do,” Secretary of Labor Thomas E. Perez wrote in his blog regarding the final rule. “Ensuring fairness is the best way to attract good workers, to increase productivity and to make sure that we never leave talent on the table. America simply cannot afford that. Moreover, none of us can perform our best when we fear for our livelihood and economic security. A workplace culture based on tolerance and acceptance allows us to bring our whole selves to work.”

Compliance assistance. During the period between publication and the effective date, the OFCCP plans to publish compliance assistance materials and host webinars that will describe the amended requirements and conduct workshops and forums to listen to any questions and concerns contractors and other stakeholders may have. The first technical assistance webinars are scheduled for Friday, December 5, and Tuesday, December 9, 2014.