New DOL Rules Prevent Discrimination Based on Gender Identity and Transgender Status

The United States DOL has updated its sex discrimination rules for businesses earning more than $10,000 annually through federal contracts.  The new rule will be published on June 15, 2016, and will take effect August 14, 2016.

A link to the final rule can be found here: Final Rule.

The rule is meant to bring the decades’ old Office of Federal Contract Compliance Programs (“OFCCP”) sex discrimination regulations for federal contractors into accord with the current state of law, particularly Executive Order 11246, which:

  • prevents discrimination against employees and applicants based on race, color, religion, sex, sexual orientation, gender identity, or national origin;
  • requires affirmative action to ensure that applicants and employees are treated equally, without regard to race, color, religion, sex, sexual orientation, gender identity, or national origin;
  • requires notices to be posted explaining the new nondiscrimination requirements;
  • requires all job postings to contain the new nondiscrimination requirements;
  • prohibits discrimination against employees and applicants who ask about, discuss, or disclose their compensation or the compensation of another; and
  • requires compliance reports to the Secretary of Labor for contractors who are directed to do so.

While the OFCCP states in the rule that its provisions “articulate well-established case law and/or applicable requirements from other Federal agencies and therefore the requirements for affected entities are largely unchanged by this rule,” there are a handful of significant provisions in the OFCCP’s final rule that are not clearly stated in Executive Order 11246.

For example, the final rule requires contractors to allow transgendered employees “to access sex segregated workplace facilities that are consistent with their gender identity.” This includes access to bathrooms, changing rooms and showers. Notably, the final rule does not prohibit male/female sex segregation for these facilities, as long as transgender employees are permitted to use the facilities consistent with their gender identity. See 41 C.F.R. Part 60-20.2(b)(12) – (14).

Although the rule does not “require construction of gender-neutral bathrooms,” the OFCCP suggests in an appendix of best practices that contractors should “designate single user restrooms, changing rooms, showers, and similar single-user facilities as sex-neutral.” Likewise, the OFCCP suggests, but does not require, that job titles be made gender neutral as a best practice.

The final rule also prohibits “[t]reating employees or applicants adversely because they have received, are receiving, or are planning to receive transition-related medical services designed to facilitate the adoption of a sex or gender other than the individual’s designated sex at birth.” See 41 C.F.R. Part 60-20.2(b)(14). This is implicit in Executive Order 11246, but it bears mentioning that the OFCCP rule explicitly prohibits harassment of those who are “transitioning on the job.”

Several related types of sex-based harassment are specifically identified and prohibited, including:

  • adverse treatment of an employee because of his or her actual or perceived gender identity or transgender status;
  • harassing a man because he is considered effeminate or insufficiently masculine; and
  • otherwise treating an employee or applicant adversely because of their failure to comply with gender norms and expectations for dress, appearance, and/or behavior.

See 41 C.F.R. Part 60-20.7. Notably, if it turns out that an employee is not actually transgendered, this fact would not provide a defense to his allegations of harassment or discrimination because even the perception of transgender status is sufficient to trigger the protection of the rule.

One tricky legal issue may arise because the OFCCP does not clearly define “transgender status” except by reference to an employee or applicant’s subjective experience. In footnote 8 of the prefatory remarks, the OFCCP explains:

[a] transgender individual is an individual whose gender identity is different from the sex assigned to that person at birth. Throughout the final rule, the term ‘transgender status’ does not exclude gender identity, and the term ‘gender identity’ does not exclude transgender status.

This definition is circular, and it does not provide a way to determine an employee’s gender identity other than by asking them. Thus, unlike other actionable forms of discrimination–such as race, age, disability, or gender discrimination–there may be no way to definitely prove or disprove that an individual is transgendered. Lack of clarity could subject the rule to occasional, and unfortunate, abuse by dishonest individuals.

While the focus of the new rule is clearly on transgender status, there are a handful of other requirements that federal contractors should observe. For example, the rule appears to prohibit gender-specific mentorship programs. To this end, the rule bars:

Distinguishing on the basis of sex in apprenticeship or other formal or informal training programs; in other opportunities such as on-the-job training, networking, mentoring, sponsorship, individual development plans, rotational assignments, and succession planning programs; or in performance appraisals that may provide the basis of subsequent opportunities….

See 41 C.F.R. Part 60-20.2(b)(11). This could possibly prevent mentorship groups exclusively for the advancement of women in the workplace, which would be a break from modern norms.

One other requirement is the OFCCP’s ban on discrimination against men who choose to take paternity or other caregiver leave under the Family and Medical Leave Act. Again, the rule is designed to protect employees from the perception (held by some) that a male taking caregiver or paternity leave would fail to comply with traditional gender roles.

If you have questions concerning whether and how the new OFCCP rule applies to your company, please feel free to contact us at (470) 839-9300 or beau@freedhoward.com.

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