By Laura J. Maechtlen, Annette Tyman, and Craig B. Simonsen

More from the OFCCP on gender identity.  This week, the Office of Federal Contract Compliance Programs (OFCCP) issued Directive 2014-02 (August 19, 2014) to clarify that discrimination on the basis of sex covers discrimination on the basis of gender identity and transgender status.

The Directive, entitled “Gender Identity and Sex Discrimination” comes on the heels of President Obama’s signing of Executive Order 13672, which amended Executive Order 11246, to include sexual orientation and gender identity among race, color, religion, sex and national origin to the list of protected categories requiring non-discrimination and affirmative action.  However, unlike Executive Order 13672, the Directive does not create new stand-alone protections for gender identity and sexual orientation.  Instead, it clarifies that the OFCCP “continues to accept and investigate individual and systemic complaints alleging sex discrimination against transgender employees.”

Notably, the OFCCP’s Directive follows the EEOC’s administrative agency decision in Macy v. Holder and—based on the EEOC decision—purports to follow existing Title VII case law rather than an Executive Order.  In Macy, the EEOC took a clear step toward clarifying Title VII in recognizing a transgender worker’s right to assert a claim for sex discrimination under Title VII, not only based on a “sex stereotyping” theory, but also as a traditional claim of discrimination based on “sex.”  For more information about the Macy decision, see our earlier client alert available here.

So why was Directive 2014-02 needed, if Executive Order 11246 has already been amended to include transgender workers?  There are likely two reasons.  First, Directive 13672 will not go into effect until the final implementing regulations are issued.  The proposed regulations are not expected until mid-October, and then there will be a notice and comment period.  As a result, the regulations will likely not be finalized until 2015, and any delay in the effective date of the Executive Order could create confusion regarding protection for workers based on gender identity and expression.  An additional reason is that the obligations set forth in Executive Order 13672 will not be effective immediately and will only apply to contracts entered into on or after the effective date described in the regulations.  For more information about Executive Order 13672, see our earlier blog post available here.

The regulations implementing Executive Order 13672 will be telling, however, it is important for contractors to be aware that the OFCCP’s newly stated position is that both gender identity discrimination and transgender discrimination are already prohibited by existing protections afforded under Executive Order 11246.  The EEOC also clearly recognizes that Title VII protects workers based on transgender status.  Thus, employers doing business with the government will need to take a fresh look at their non-discrimination policies, practices, and management training with these principles in mind.

For more information on this topic, please contact the blog authors or your Seyfarth attorney.