Federal Acquisition Regulation (FAR) Implementing Executive Order 13672 Prohibiting Discrimination Based on Sexual Orientation and Gender Identity

Though multiple legislative efforts have failed in amending Title VII to include sexual orientation and gender-identity to the list of protected classes which cannot be discriminated against, President Obama’s Executive Order (EO) 13672, signed on July 21, 2014, and the subsequent guidance issued by various government agencies leaves government contractors with changes to make in this arena.  Like EO 11246, Equal Employment Opportunity, issued in 1965, it impacts virtually all government contracts with a very low threshold of $10,000 or more in federal contracts or subcontracts.  Exclusions are few and unaltered as currently stated in the regulations, 41 CFR 60-1.5.

EO 13672 amends EO 11246 to include sexual orientation and gender identity to the list of protected classes of individuals which cannot be discriminated against in employment of covered federal contractors. 

EO 13672 was announced by the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP), posted in the Federal Register on December 9, 2014 to be effective on April 8, 2015, 120 days after its publication in the Federal Register.  The actual Federal Register (FAR) posting was April 10, 2015; hence, Government contractors who are affected by this EO will be contractually responsible for compliance as contracts and subcontracts are entered into or modified on or after the effective date of the FAR revisions (April 10, 2015). 

It is important to make note that although the effective date of EO 13672 appears to be April 8, 2015 OFCCP posting) or April 10, 2015 (FAR posting), this does not change or negate the August 19, 2014 directive “Gender Identity and Sex Discrimination”, Directive 2014-02, which clarifies that sex discrimination includes discrimination on the bases of gender identity and transgender status.  This directive is consistent with the EEOC’s decision in Macy v. Holder.  Consequently, discrimination based upon gender identity is or was effectively prohibited for all contractors and subcontractors currently covered by EO 11246.  In colloquial terms, the regulations and their applicability dates appear to be the “tail wagging the dog” given the EEOC’s decision in Macy v. Holder.

DoD, GSA and NASA rely on OFCCP’s definitions of gender identity and sexual orientation. Following is an excerpt from OFCCP’s “Frequent Asked Questions:  LGBT” which can be found at http://www.dol.gov/ofccp/LGBT/LGBT_FAQs.html. 

With the various government agencies being involved, it is important to review the various guidelines set forth by each agency.  Though not an exhaustive list, consider the following: 

1. Revise your Equal Employment Opportunity (EEO) Clause.

Contractors must amend their EEO clause to include sexual orientation and gender identity to be included in covered contracts and subcontracts.  .  Prime contractors subject to the revised EEO Clause shall include it in all nonexempt subcontracts and purchase orders by including the full clause or integrating it by reference.

2. Consider and Possibly Revise your Equal Employment Opportunity (EEO) “Tagline”.

The “tagline”, which is required of covered contractors, indicates that a contractor is an equal opportunity employer in all job postings and advertisements, whether published or broadcast.  Per OFCCP, an employer may list all protected bases which it does not discriminate on or simply use the phrase “Equal Opportunity Employer”.  If the contractor chooses to list all protected bases, they must ensure that sexual orientation and gender identity are included.

3. Update your EEO is the Law Poster.

The requirement to conspicuously display this poster is certainly nothing new.  The poster will be updated to include EO 13672 and the recent VEVRAA regulations.  Until the new posters are released, contractors may continue to use the poster which was most recently updated in November 2009.

4. Inform OFCCP and the State Department.

Less commonly known, perhaps, is the requirement of contractors to notify the OFCCP and the State Department if an employee or potential employee is denied a visa to enter a foreign country if the contractor believes that the denial is based on the individual’s race, color, religion, national origin or sex.  EO 13672 requires the same if denial is believed to be based on the individual’s sexual orientation or gender identity.

5. Be Prepared for an Audit by OFCCP.

As contractors are selected for audit by the Federal Contractor Scheduling System, they should be aware of all laws that OFCCP enforces.  Naomi Levin, OFCCP’s Chief of the Branch of Regulatory Legislative and Policy Development, warned “When conducting compliance evaluations of contractors covered by the new final rule OFCCP will be checking the equal opportunity clause in contracts, job advertisement tag lines and of course the EEO is the Law poster once the new poster becomes available.  Additionally there may be questions related to whether there have been any visa notices to OFCCP or the State Department.”  If, during the process of an audit by OFCCP, it is believed that discrimination on the bases of sexual orientation or gender identity has occurred, an investigation would follow.  Individuals who are employed by or who have applied for employment with a covered federal contractor may file a complaint of discrimination based on sexual orientation and gender identity with OFCCP.  These complaints will be investigated by OFCCP.

6. Consider Updating Policies & Procedures and/or Training.

As a covered contractor, you should consider and update current policies and procedures, ensuring that nondiscrimination of sexual orientation and gender identity are adequately covered, to include same sex marriages and the impact on benefit administration.  In addition, some employers may find it useful to incorporate this new rule, and the practical implementation of, into training topics which involves discrimination, harassment and sensitivity.

There are no changes to the Affirmative Action Program requirements at this time.  You are not required to invite voluntary self-identification, or collect and analyze data related to sexual orientation or gender identity.  Nor does the final rule require other affirmative action activities currently required as part of their affirmative action efforts on behalf of women, minorities, veterans and disabled.  However, make note that if you choose to collect data relevant to sexual orientation and/or gender identity, OFCCP may request to review it.

President Obama stated that 2014 would be a year of action and believes EO 13672 is “part of this commitment to expanding opportunity for hardworking Americans”.  Interestingly, it is not only American LGBT workers which the U.S. Department of Labor wishes to assist; it was released on January 15, 2015, that the US DOL’s Bureau of International Affairs announced the award of $1.3M “to help the Mexican government implement the 2012 labor law reforms on discrimination, focusing on sexual orientation- and gender-based discrimination…”.  The momentum seems to be continuing in 2015 and additional requirements for government contractors as well as similar changes for other employers won’t be a surprise.