Department of Labor Expands Protected Classes for Federal Contractors

On December 9, 2014, the Office of Federal Contract Compliance Programs (“OFCCP”) under the U.S. Department of Labor published a Final Rule that prohibits federal contractors and subcontractors from discriminating in employment on the grounds of sexual orientation and gender identity.[1] The Final Rule implements Executive Order 13672 which adds sexual orientation and gender identity to the prohibited bases of discrimination in Executive Order 11246.[2] Executive Order 11246 previously only prohibited discrimination on the grounds of race, color, religion, sex, and national origin and required federal contractors and subcontractors to take affirmative measures to prevent discrimination from occurring.

The Final Rule revises existing regulations in 41 C.F.R. Part 60. Though the regulations do not define “sexual orientation” or “gender identity”, the OFCCP relies upon the definitions used by the EEOC and case law developed under Title VII. The revised regulations will be effective April 8, 2015, and will apply to all federal contractors who hold contracts entered into or modified on or after April 8, 2015.

Among the changes enacted by the Final Rule, all covered contracts and subcontracts must amend the Equal Opportunity Clause to include sexual orientation and gender identity as bases upon which federal contractors are prohibited from discriminating against job applicants and employees. Further, any solicitations or advertisements for employment must state that the contractor considers all applicants for employment without regard to the protected classes, including sexual orientation and gender identity.

Contractors must also take affirmative action to ensure that applicants are employed and employees are treated without regard to their sexual orientation or gender identity.  Unlike the data collection and employment goals for women and minorities required by Executive Order 11246, the only affirmative action requirements are that federal contractors (1) update Equal Opportunity Clauses, (2) update equal opportunity language in job solicitations and notices, and (3) ensure that applicants and employees are treated without regard to their sexual orientation or gender identity. The Final Rule does not change the affirmative action program requirements for women or minorities. Contractors are not required to set placement goals on the bases of sexual orientation or gender identity nor are they required to collect and analyze data on these bases. However, contractors may not discriminate on the basis of any protected class, including sexual orientation or gender identity, to meet existing affirmative action plan goals for women or minorities.

The Final Rule also notes that nothing in the rule diminishes the pre-existing coverage of discrimination on the basis of gender identity or discrimination on the basis of transgender status as a form of sex discrimination according to Price Waterhouse v. Hopkins, 490 U.S. 228 (1989) and Macy v. Holder, EEOC Appeal No. 0120120821 (April 20, 2012). Further, Executive Order 13672 makes no changes to the existing religious exemption for religiously affiliated contractors to favor individuals of a particular religion when making employment decisions.

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