As we alerted you to earlier today, OFCCP has issued its final rule implementing Executive Order 13672, providing non-discrimination protection for individuals on the basis of sexual orientation and gender identity.

There was early speculation that this rule might involve soliciting of LGBT status from applicants or employees as well as a requirement for some type of data analyses.  That is not the case.  The rule instead take a more “minimalist approach” in implementing the President’s Executive Order, requiring that contractors include gender identity and sexual orientation as prohibited bases of discrimination through inclusion in the Equal Opportunity Clause.

Rule Finalized Without Notice and Comment

OFCCP addresses its decision to implement the rule without public comment in a FAQ.  On this point the Agency says:

 “President Obama’s Executive Order 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 rule 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.”

The fact that there are no recordkeeping or solicitation obligations may provide the Agency with a stronger footing to rebut potential challenges to its decision to finalize these rule without putting them out for notice and comment.

Religious Exemption

As publicized when it was first executed, Executive Order 13672 does not contain a religious exemption.  Consistent with this, OFCCP’s final rule implementing the order does not provide for an exemption from adherence with the Final Rule on religious grounds.  The Agency explains in an FAQ that the new Executive Order (and implementing rule) do not change the existing religious exemption to Executive Order 11246.  This exemption was added to Executive Order 11246 by President Bush in 2002 and allows religiously affiliated contractors to favor individuals of a particular religion when making certain employment decisions.

Despite this existing exemption, and in light of the fact the it does not address the exemption of religious organizations based on the beliefs of the organization, the Agency could see legal challenges involving implementation and compliance with this rule.

The final rule is expected to be published in the Federal Register on December 5, 2014.  The rule will become effective on April 4, 2015, 120 days from publication.

Now that the final rule has been released, contractors should take the time before they become effective to ensure their policies, contract language and other materials are up-to-date as well as take the time to train and educate managers and hiring personnel on the implications of these new protections.