The U.S. Department of Labor's (DOL) Office of Federal Contract Compliance Programs (OFCCP)—which enforces anti-discrimination and affirmative action laws affecting government contractors and subcontractors—has issued Directive 2014-02 clarifying that discrimination based on gender identity and transgender status constitutes sex discrimination under Executive Order 11246.

The OFCCP enforces Executive Order 11246, which prohibits federal contractors and subcontractors from discriminating on the basis of race, color, religion, sex, or national origin. The OFCCP enforces the nondiscrimination provisions of the Order by following Title VII of the Civil Rights Act of 1964 and the case law interpreting that statute, as well as by deferring to the Equal Employment Opportunity Commission's (EEOC) interpretations of Title VII.

Directive 2014-02 makes clear that the OFCCP will continue to "fully investigate and seek to remedy instances of sex discrimination that occur because of an employee's gender identity or transgender status," and will "accept and investigate individual and systemic complaints alleging sex discrimination against transgender employees."

This OFCCP directive is the latest in a series of recent efforts by the Obama administration to protect lesbian, gay, bisexual, and transgender employees who work for federal contractors from potential discrimination based on their sex, sexual orientation, and gender identity. Most recently, President Obama signed Executive Order 13672, which added sexual orientation and gender identity to the list of protections that apply to federal contractors and added gender identity as a protected category that applies to federal employees, who are already protected from discrimination based on sexual orientation. Our previous alert on this Order is available here.

President Obama directed the DOL to prepare regulations within 90 days of Executive Order 13672 to implement its new protections. OFCCP Directive 2014-02 appears to be an interim step in that process. Proposed regulations covering discrimination based on sexual orientation, gender identity, and transgender status are expected in the next couple of months.