More than two years after expressly declining to do so, this past Monday, President Obama signed an Executive Order prohibiting federal contractors from discriminating against individuals on the basis of sexual orientation or gender identity. The Executive Order is short on substance and long on unanswered questions. Some of the questions that are not addressed in the Executive Order will probably be answered in proposed regulations, which the Department of Labor must publish in 90 days.

What the EO Says

The new Executive Order amends Executive Order 11246 (first issued by President Johnson in 1965) by adding the following bold language to the existing provisions in all government contracts:

  • The contractor will not discriminate against any employee or applicant for employment because of race, color, religion, sex, sexual orientation, gender identity, or national origin.
  • The contractor will take affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to their race, color, religion, sex, sexual orientation, gender identity, or national origin.
  • The contractor will, in all solicitations or advertisements for employees placed by or on behalf of the contractor, state that all qualified applicants will receive consideration for employment without regard to race, color, religion, sex, sexual orientation, gender identity, or national origin.

These new provisions will apply to federal contracts and subcontracts entered into on or after the effective date of the regulations to be issued by the DOL.

The EO also prohibits the federal government from discriminating against applicants and employees on the basis of gender identity; sexual orientation was already a protected characteristic for federal public sector employees.

What the EO Doesn't Say

President Obama has left much to the DOL to implement in its regulations. Here are just some of the basic questions that the regulations will need to address:

  • What is the definition of "sexual orientation" and "gender identity"? We all know generally what these terms mean, but we will need a technical, legal definition. Presumably, the definition of "gender identity" will go beyond the sexual-stereotyping theory that the Equal Employment Opportunity Commission and some courts have used to find that such discrimination is already prohibited by Title VII.
  • What is the "affirmative action" that contractors will be required to take with respect to LGBT applicants?
  • Will the DOL interpret this "affirmative action" obligation to require outreach toward the LGBT community? What about tracking the LGBT demographics of applicants and employees? Will contractors be required to analyze selection decisions to ensure there is no adverse impact against LGBT individuals?
  • Will contractors have to develop written affirmative action plans or set goals for LGBT representation in their workforces as required for females, minorities, individuals with a disability, and protected veterans?
  • Will contractors be required to submit a report on LGBT data, similar to the EEO-1 or VETS-100A Reports?
  • How will contractors satisfy the requirement that job advertisements sufficiently notify applicants that they will be considered without regard to their LGBT status? Will the addition of "LGBT" to the current EOE tagline suffice?
  • Will there be any exemption for small contractors, or will the existing thresholds for coverage under EO 11246 apply?
  • How does the current religious exemption in EO 11246 apply to these new obligations? Currently, the non-discrimination and affirmative action provisions do not apply to a contractor that is a "religious corporation, association, educational institution, or society, with respect to the employment of individuals of a particular religion to perform work connected with the carrying on by such [entity] of its activities." However, such religious entities are not excused from complying with the other provisions of the EO. Presumably, because the new EO did not include any special exemption for religious organizations – despite significant pressure on President Obama to do so – the DOL is likely to provide that even religious entities are prohibited from discriminating against LGBT individuals because they are not "individuals of a particular religion."

This is one of a series of executive actions in which the President uses the nation's federal contractors as a vehicle for measures that he cannot get passed through Congress. The additional administrative burden placed on federal contractors of all sizes puts these companies at a competitive disadvantage and is a disincentive to doing business with the federal government.

If past experience holds, contractors can expect the current DOL to issue expansive and burdensome regulations.