On July 21, 2014, President Barack Obama signed Executive Order 13672 adding sexual orientation and gender identity to the list of protected traits and prohibiting discrimination based on the same. Pursuant to the Order, on December 3, 2014, the Department of Labor announced the final rule that prohibits federal contracts from discriminating on the basis of sexual orientation or gender identity.

Interestingly, the final rule was issued without a proposed rule and comment period. In a press release dated December 3, 2014, Patricia A. Shiu, Director of the OFCCP, stated “[t]his 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 justifications for workplace discrimination by those that profit from taxpayer dollars.”

To Whom Does Executive Order 13672 Apply?

Importantly, the new rule only applies to federal (sub)contracts that were entered into or modified on or after the effective date, and the requirements themselves will not be added to existing contracts and be considered a modification. The effective date of the final rule was April 8, 2015.

What Does Executive Order 13672 Require?

Pursuant to the final rule, federal (sub)contractors cannot discriminate against an individual on the basis of their sexual orientation or gender identity. Federal contractors must also revise their equal opportunity clause to include sexual orientation and gender identity.

Presently, there are no requirements to gather data or conduct any analyses or adverse impact relating to employment practices and an individual’s sexual orientation or gender identity. Federal contractors do not have any obligations relating to voluntary self-identification.

Further, there has not been a change in any affirmative action program requirements and no required placement goals based on gender identity or sexual orientation.

Do Executive Order 13672’s Non-Discrimination Requirements Only Apply to Federal Contractors?

While the Executive Order only applies to federal contractors, the Equal Employment Opportunity Commission (“EEOC”) is actively advocating against discrimination based on sexual orientation and gender identity for all employers subject to Title VII of the Civil Rights Act of 1964.

Specifically, the EEOC has made clear that it interprets and enforces Title VII’s prohibition of sex discrimination as forbidding any employment discrimination based on gender identity or sexual orientation. The EEOC has initiated suits against employers as well as filed amicus briefs in support of the proposition that Title VII prohibits discrimination based on sexual orientation and gender identity.

Specifically, the EEOC has already filed a case this year forwarding its position that Title VII includes the prohibition of discrimination based on sexual orientation. The EEOC has framed the allegations as discrimination based on the individual’s sexual orientation “and/or” discrimination based on gender-based expectations, preferences, or stereotypes. In EEOC v. Scott Medical Health Center, P.C., W.D. Pa. No. 2:16-cv-00225-CB, the EEOC seeks injunctive relief as well as back pay, compensatory damages, and punitive damages for an employee based on alleged harassment due to sexual orientation by making highly-offensive anti-gay epithets and other vulgar epithets based on sex stereotypes.

The EEOC has also been active in filing amicus briefs in this area. In Evans v. Georgia Regional Hospital, 11th Cir. No. 15-15234, the EEOC filed an amicus brief arguing that Title VII’s prohibition on sex discrimination encompasses discrimination because of sexual orientation. In Muhammad v. Caterpillar Inc., 7th Cir. No. 12.173, the EEOC filed an amicus brief supporting plaintiff’s petition for rehearing arguing that the Circuit should have recognized that Title VII’s prohibition on sex discrimination also prohibits discrimination based on sexual orientation. In Dawson v. H & H Electric, Inc., E.D. Ark. No. 4:14-cv-00583 SWW, the EEOC filed an amicus brief in response to Defendant’s motion for summary judgment. The EEOC argued the Supreme Court’s decision in Price Waterhouse makes clear that transgender discrimination is actionable under Title VII because it is discrimination based on sex.

What Should Organizations Do to Prepare?

Federal contractors should have a non-discrimination policy that is updated to include gender identity and sexual orientation. Federal contractors should have mandatory training on the policy that includes respectful treatment and non-discrimination based on gender identity and sexual orientation. Hiring officers and managers should receive additional training in the appropriate areas to ensure compliance.

bq lquo…federal contractors need to be conscious of the names and pronouns they use for individuals. Organizations should always request and follow the employee’s preference.bq rquo

The OFCCP has specifically focused on transgender employees in the workplace. To stay in front of this developing area, federal contractors should start recognizing and identifying common workplace issues related to gender identity and gender transition that arise and how to address these issues to ensure compliance. First, federal contractors need to be conscious of the names and pronouns they use for individuals. Organizations should always request and follow the employee’s preference. Second, according to Office of Personnel Management guidance, federal contractors should allow individuals to use facilities consistent with the individual’s gender identity.

Information relating to an individual’s sexual orientation or gender identification is confidential and should be treated with the same protections as other confidential information. Generally, organizations should not inquire about an individual’s medical treatment and/or sexuality. Additionally, federal contractors should permit individuals to dress in accordance with their gender identity. Federal contractors should establish a policy similar to zero tolerance policy for any harassment related to an individual’s sexual orientation or gender identity.

Federal contractors should also consider creating a policy to address common issues that arise in the workplace during a gender transition. Taking these steps will help federal contractors avoid coming into an enforcement agency’s crosshairs on this new hot-button issue.