OFCCP Announces Final Rule Protecting LGBT Federal Contractor Workers From Bias

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By Jay-Anne Casuga

Dec. 3 — The Labor Department's Office of Federal Contract Compliance Programs Dec. 3 announced the release of a final rule barring federal contractors from discriminating against lesbian, gay, bisexual and transgender employees.

The rule implements Executive Order 13,672, which President Barack Obama signed in July.That order amended EO 11,246, which is enforced by the OFCCP, to include sexual orientation and gender identity among the classes protected from employment discrimination.

“This rule will extend protections to millions of workers who are employed by or seek jobs with federal contractors and subcontractors, ensuring that sexual orientation and gender identity are never used as justification for workplace discrimination by those that profit from taxpayer dollars,” said OFCCP head Patricia A. Shiu.

According to the DOL, the final rule will become effective 120 days after its scheduled publication in the Dec. 8 Federal Register. The rule will apply to employers that enter into or modify federal contracts on or after that date.

No Data Collection, Analysis Required

The OFCCP stated in the final rule that contractors will be required to update the equal opportunity clause included in new or modified subcontracts and purchase orders, to ensure that applicants and employees “are treated without regard to their sexual orientation and gender identity,” and to update the “equal opportunity language used in job solicitations” and workplace notices.

David B. Cohen, a Washington consultant for federal contractors, told Bloomberg BNA Dec. 3 that the final rule was what employers expected, that is, a nondiscrimination regulation that added protected classes to EO 11,246.

Cohen, who serves as president of DCI Consulting Group and senior vice president of the Council for Corporate Equality, said the final rule could have included applicant and employee self-identification requirements or quantitative hiring goal provisions like the OFCCP's final rules under Section 503 of the Rehabilitation Act and the Vietnam Era Veterans' Readjustment Assistance Act, which went into effect in March.

“That is not the direction the administration went,” Cohen said.

In the final rule, the OFCCP said that “[n]o changes are being made to the written affirmative action program requirements” under EO 11,246.

This means that it won't require contractors to collect data and set placement goals based on the sexual orientation or gender identity of applicants or employees, or to ask such individuals to voluntarily self-identify their LGBT status.

“At the same time, the final rule does not prohibit contractors from asking applicants and employees to voluntarily provide this information, although doing so may be prohibited by state or local law,” the agency said.

It added that contractors also won't be required to conduct data analysis regarding compensation, hiring, or other employment practices based on sexual orientation or gender identity.

Certain contractors currently must conduct data collection, analysis and goal setting based on race, sex, veteran status and disability status under rules implementing other EO 11,246 provisions, as well as Section 503 and VEVRAA.

No Change to Current Religious Exemption

In 2002, President Bush signed EO 13,279, which added a religious exemption to EO 11,246 that allows federal contractors that are religious corporations, associations, educational institutions or societies to favor employees and applicants of a particular religion in employment decisions.

In frequently-asked-questions guidance posted to its website, the OFCCP said the new rule makes no changes to that exemption or the judicially created “ministerial exception,” which “prohibits the Government from interfering with the ability of a religious organization to make employment decisions about its ‘ministers,' a category that includes, but is not limited to, clergy.”

Many Contractors Provide LGBT Protection

Cohen said he commends President Obama and the OFCCP for the final rule, but also observed that many of his clients already have incorporated sexual orientation and gender identity nondiscrimination protections into their company policies.

Before the president's July 2014 executive order, 21 states and the District of Columbia enacted laws barring sexual orientation bias. Seventeen states plus the District also have made gender identity discrimination unlawful.

According to a statement from the University of California School of Law's Williams Institute in Los Angeles, 86 percent of the top 50 federal contractors, based on dollar amounts awarded, had policies prohibiting sexual orientation bias as of May 2014. Sixty-one percent also have policies barring gender identity discrimination, the institute said.

The institute conducts independent research on sexual orientation and gender identity law and public policy.

Pelosi Calls on Congress to Pass ENDA

House Minority Leader Nancy Pelosi (D-Calif.) in a Dec. 3 statement praised the OFCCP's final rule and called on lawmakers to pass the Employment Non-Discrimination Act, which would amend Title VII of the 1964 Civil Rights Act to include express protections for LGBT employees and applicants.

An ENDA bill has been introduced in every Congress since 1994. But it hasn't been enacted, and observers have posited that its political prospects in the upcoming Republican-controlled Congress appear dim.

The OFCCP has historically followed Title VII principles when enforcing EO 11,246. However, Title VII, which applies to more employers than the executive order, doesn't explicitly prohibit sexual orientation or gender identity bias. Some LGBT workers have had success, however, in bringing Title VII bias claims under a sex-stereotyping theory.

The Equal Employment Opportunity Commission, which enforces Title VII, has recognized that sex discrimination includes bias based on transgender status.

To contact the reporter on this story: Jay-Anne B. Casuga in Washington at jcasuga@bna.com

To contact the editor responsible for this story: Susan J. McGolrick at smcgolrick@bna.com

Text of the pre-publication final rule is available at http://op.bna.com/dlrcases.nsf/r?Open=jaca-9rftbr.