Friday, July 25, 2014

Will Obama's Executive Order Protecting LGBT Workers Be the Next Hobby Lobby?

Continuing to make good on the promise to govern using his “pen and cell phone,” President Obama this week signed an executive order -- modifying two executive orders previously signed in the 1960s -- that gives new workplace protections to lesbian, gay, bisexual and transgendered (LGBT) employees of the federal government, as well as of contractors and subcontractors.  Federal government employees are already protected against discrimination on the basis of sexual orientation, and the order supplements that by adding gender identity to the list of traits or characteristics that cannot be considered in employment decisions.  (“Gender identity” refers to a person’s perception of what their own gender is.  While most people think of there being only two genders, male and female, medical and mental health literature recognizes that there are literally dozens of identity variations across a broad spectrum of possible perceptions.)

Additional regulations must be drafted before the new rules relating to federal contractors and subcontractors go into effect.  All federal contractors who do at least $10,000 in business annually with the federal government will be forbidden from discriminating against an employee or applicant on the basis of sexual orientation or gender identity.  The Office of Federal Contract Compliance Programs expects to issue permanent regulations to enforce the executive order by early 2015.  In the meantime, the rules relating to employment by the federal government are effective immediately.

President Obama specifically refused to create exemptions in the executive order for religiously-affiliated contractors.  Under an exemption put in place years ago by George W. Bush, religiously-affiliated contractors are allowed to give preference to individuals of a particular religion when making an employment decision.  In light of the U. S. Supreme Court’s recent Hobby Lobby decision, closely held businesses that are covered by the new executive order and whose owners have strong religious objections to LGBT prinicples or beliefs may challenge the order on grounds similar to those on which the Affordable Care Act was successfully challenged in Hobby Lobby.  Or Congress could elect to defund the implementation of the new executive order, which would effectively nullify it.  Time will tell.

For now, employers who are federal contractors or subcontractors should use the time to review their policies and OFCCP compliance practices.  The new executive order signed by President Obama can be found here, and the previous orders that it modifies and to which it refers are here and here.

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