As the White House announced last month, President Obama signed yesterday an Executive Order that bans workplace discrimination against lesbian, gay, bisexual, and transgender (“LGBT”) workers of federal contractors.  Executive Order 11246, issued by President Lyndon B. Johnson, prohibits federal contractors from discriminating “against any employee or applicant for employment because of race, color, religion, sex, or national origin.” President Obama’s Executive Order adds sexual orientation and gender identity to the list of protected categories.  According to White House staff, the amendment is effective immediately.

The executive order directs the Department of Labor to issue proposed regulations implementing the order within 90 days.  The Office of Federal Contract Compliance Programs (“OFCCP”) will likely be charged with enforcing these new compliance obligations.  Although the contours of OFCCP’s enforcement plans are unclear, they could potentially include affirmative action obligations much like the well-established requirements for women and minorities.  Contractors will be closely watching for clues about how the government will implement the order.

The decision not to include an exemption for religious organizations has stimulated substantial controversy.  The White House and religious groups and their advocates had been in intense negotiations regarding a religious exemption during the past few months.  However, the administration elected not to exempt those employers.  Pushback is expected from religious groups newly emboldened by the Supreme Court’s recent decision in Hobby Lobby, which created a religious exemption from the Affordable Care Act.

The Order is unlikely to impact substantially the policies of larger government contractors.  The top 50 federal contractors, which receive nearly half of all federal contracting dollars, prohibit the forms of discrimination banned by the order.  Of these contractors, 86 percent prohibit sexual orientation discrimination and 61 percent prohibit discrimination based on gender identity.  The top five federal contractors ban both forms of discrimination, according to a White House fact sheet.