On July 21, 2014, President Obama signed Executive Order 11478 prohibiting federal contractors and subcontractors and construction employers working on federally assisted construction projects from discriminating in employment on the basis of sexual orientation and gender identity. This marks the first federal law expressly prohibiting sexual orientation and gender identity discrimination by private-sector employers.
Executive Order 11478 amends Executive Order 11246 to add sexual orientation and gender identity to the list of protected factors on which covered entities may not base employment decisions. Thus, the new Executive Order applies to the same contracts that are covered by Executive Order 11246: contracts with federal agencies exceeding $10,000, federally assisted construction contracts exceeding $10,000, and subcontracts exceeding $10,000 under such contracts. For coverage, either the contract itself must be (or, if open-ended, must be expected to be) in an amount in excess of $10,000 in a twelve-month period or the contractor must have multiple contracts or subcontracts that, in the aggregate, exceed $10,000 over a twelve-month period. Contracts with depositories of federal funds or with financial institutions that are issuing and paying agents for U.S. savings bonds and savings notes are covered without regard to the amount of the contract.
Covered contractors and subcontractors will be required to add sexual orientation and gender identity to their nondiscrimination policies, to include nondiscrimination clauses covering sexual orientation and gender identity in subcontracts with their vendors and suppliers of goods and/or services necessary to carry out their covered contracts, and to take affirmative action to ensure that individuals are employed and treated without regard to sexual orientation and gender identity. The new Executive Order contains no exemption for religious organizations, but an existing provision of Executive Order 11246 allows religious organizations to favor individuals of a particular religion.
In addition to prohibiting discrimination by federal contractors, Executive Order 11478 prohibits federal agencies from discriminating on the basis of gender identity. Federal agencies are already prohibited from discriminating on the basis of sexual orientation.
Executive Order 11478 directs the Secretary of Labor to issue regulations implementing the new requirements within the next ninety days. The new requirements for federal contractors and subcontractors will apply to contracts entered into on or after the effective date of the implementing regulations issued by the Secretary of Labor.