As promised last month, on Monday, President Obama issued a new Executive Order prohibiting federal contractors with ten or more employees from discriminating in employment against lesbian, gay, bisexual or transgendered applicants or employees. The Order adds these classifications to other protected categories already applicable to contractors. The Order does not include a broad exemption for religious-based employers. Instead, it maintains the current “ministerial exception” applicable only to employees who carry out the organization’s religious mission.
 
The Order will become effective after issuance of implementing regulations by the Department of Labor, probably sometime in early 2015. These rules will be closely followed by employers, under the assumption that they could eventually form the basis for similar regulations issued in the event that these protections are expanded to private employers in general. Among other issues, DOL will need to determine who is protected under the Order, and how employers must accommodate transgendered employees.
 
The immediate impact of this Order may be limited. A large number of states have adopted laws making such discrimination by any employers illegal. In addition, most large federal contractors already voluntarily prohibit discrimination against LGBT persons under their EEO policies. Therefore, the Order will likely have the largest effect on smaller contractors in states without such protections already in place.