Executive Order 13672 went into effect on July 21, 2014 and amended Executive Order 11246 by adding sexual orientation and gender identity to the list of protected classes.  Executive Order 13672, however, applies only to contracts entered on or after July 21, 2014.  The Office of Federal Contract Compliance Programs (OFCCP) has now issued Directive 2014-02, which interprets the prohibition against sex discrimination in Executive Order 11246 to include discrimination on the basis of gender identity and transgender status.  This means that contractors and subcontractors with contracts that predate July 21 can still be held liable for discrimination on the basis of gender identity and transgender status.

OFCCP says the new directive is consistent with the 2012 EEOC decision Macy v. Holder. In that case, the EEOC concluded that employer discrimination on the basis of an employee’s transgender status constitutes sex discrimination in violation of Title VII of the Civil Rights Act of 1964.  Noting that it enforces the nondiscrimination provision of Executive Order 11246 based on Title VII and its judicial and administrative interpretations, including interpretations by the EEOC, the OFCCP stated it will “continue[] to fully investigate and seek to remedy instances of sex discrimination that occur because of an employee’s gender identity or transgender status.”   

Therefore, federal contractors who enter into a contract on or after July 21 have an express obligation to ensure they do not discriminate on the basis of sexual orientation or gender identity.  And under Directive 2014-02 contractors with contracts that predate July 21 can also be held liable for discrimination on the basis of gender identity and transgender status as a form of sex discrimination, which has been a protected class since the original implementation of Executive Order 11246 in 1965.