New LGBT Executive Order Includes Affirmative Action Requirement

Employment Law, Inclusion and Diversity

This week, President Obama signed Executive Order 13672, prohibiting federal contractors from discriminating against any employee or job applicant on the basis of sexual orientation or gender identity and requiring contractors to take affirmative action to ensure job applicants are employed without regard to such factors.  The President signed the executive order because of the failure of Congress to enact the Employment Non-Discrimination Act (ENDA).  However, ENDA contains no affirmative action requirement and specifically precludes the establishment of quotas or collection of data, raising questions as to what the executive order's requirements will include.  That will be determined through Office of Federal Contract Compliance Programs (OFCCP) regulations, which could include some form of data collection from employees and job applicants, outreach, and training.  The inclusion of an affirmative action requirement raises a number of critical questions for employers:

• How will contractors determine the availability of the new protected class?
• Will contractors be required to inquire of employees and applicants as to their sexual orientation or gender identity?
• If the requirement includes hiring goals, will contractors determine those for themselves, or will OFCCP set a hiring goal like the agency did for its recently updated disability rule?
• Will a contractor have to perform in-depth analyses of its total employment process to determine whether and where impediments to equal employment opportunity exist?
• Will contractors have to evaluate their compensation systems to determine if there are sexual orientation or gender identity-based disparities?

The difficulties raised by these issues could likely be avoided if contractors simply had to demonstrate they have made good faith efforts to expand employment opportunities.  According to the EO, OFCCP has 90 days to "prepare" implementing regulations, and it is unclear as to whether this would include final regulations within that deadline or just proposed rules.