Last week, the White House announced that President Obama plans to sign an executive order barring federal contractors and subcontractors from discriminating on the basis of sexual orientation or gender identity.  The order is expected to be finalized in the coming weeks.

According to the Center for American Progress, federal contractors legally bound to comply with the executive order employ approximately 22% of all U.S. civilian workers. That means that nearly a quarter of the American workforce will be entitled to LGBT workplace protections, once President Obama signs the order.  There continue to be 29 states that offer no employment protections on the basis of sexual orientation and 32 with no protections based on gender identity.  Many LGBT workers in those states will now have workplace protections for the first time ever. 

The president’s executive order would stipulate that contracts with the federal government worth more than a certain amount – $10,000 is the general threshold – require the cosigner to have a policy against LGBT discrimination.  In other words, if a company wants to do business with the federal government, the executive order will require that company to have internal policies and rules prohibiting LGBT discrimination.

Last year, the Senate passed a version of the Employment Non-Discrimination Act (ENDA) – which would ban all employers from firing, refusing to hire, or otherwise discriminating against any employee on the basis of sexual orientation or gender identity – but its chances of passing the Republican-controlled House remain slight.  The latest version of the ENDA includes a religious freedom exemption for employers; meaning that an employer will be exempt from the ENDA if the ban on sexual orientation discrimination violates the religious beliefs of the employer.  It will be interesting to see if the executive order includes any similar type of religious freedom exemption.   

It will also be interesting to see if the Supreme Court’s decision in Sebelius v. Hobby Lobby affects the executive order.  Later this week or early next week the Supreme Court is expected to announce its decision in the Sebelius v. Hobby Lobby case. That decision will determine whether for-profit, private corporations have religious freedom rights.  If the Court rules in favor of Hobby Lobby and finds that corporations do have religious freedom rights, then private employers will have standing to sue the federal government for requiring them to engage in practices that violate the religious beliefs of their owners – whether that’s providing contraception or ruling out potential employees, or discriminating against current ones, based on their sexual orientation or gender identity.  If the Supreme Court does rule in favor of Hobby Lobby, it is likely that some company (ies) will challenge the executive order on the basis of religious freedom and discrimination.  The challenging company (ies) will argue that the religious beliefs of their owner(s) would be violated by a policy that prohibits sexual orientation discrimination, and therefore the executive order has a religious based disparate impact on them by making them ineligible for federal contracts.