On June 14, 2016, the United States Department of Labor (DOL) Office of Federal Contract Compliance Programs (OFCCP) issued a Final Rule to revise its sex discrimination policies, updating its guidelines to provide additional guidance on what constitutes discrimination based on sex. The updated guidelines define “sex” to include gender identity, transgender status, pregnancy, and sex stereotyping.  OFCCP also clarified some aspects of the old rule, including which parts contractors are subject to, whether a contractor’s good-faith efforts to expand employment opportunities for women could result in a violation of the Rule, and whether contractors may seek exemptions under the Religious Freedom Restoration Act (RFRA).

The guidelines implementing Executive Order 11246 date back to the 1960s, but have remained largely unchanged since 1970. The Final Rule brings OFCCP’s regulations into alignment with Title VII as interpreted by courts and the EEOC.  Since most federal contractors covered by the Final Rule are already subject to Title VII or similar state laws, many are likely already required to be in compliance with many of the provisions of the Final Rule.

The largest change in the new Rule is the expansion of the definition of sex discrimination to include discrimination based on gender identity, transgender status, pregnancy, or sex stereotyping. The Rule offers protections to transgender workers by requiring that contractors allow workers to use bathrooms, changing rooms, showers, etc. consistent with the gender with which they identify.  The Rule further protects transgender workers by prohibiting employers from categorically excluding coverage for health care services related to gender dysphoria or gender transition.  Employers should be sure that their health plans do not contain any of these categorical exclusions, which are facially discriminatory under the new Rule.

Since the definition of “sex” has been expanded to cover sex stereotypes as well, the updated guidelines now prevent contractors from making employment decisions on the basis of stereotypes. Employers should also be careful not to treat employees differently due to stereotypical expectations related to an employee’s gender—for example, a contractor may not deny an opportunity to mothers that is available to fathers based on an assumption that a mother’s childcare responsibilities will conflict with her job performance while a father’s will not.

The new guidelines also contain a section on discrimination on the basis of pregnancy, which was only briefly addressed in the old rule. It incorporates the language of Title VII as amended by the Pregnancy Discrimination Act and requires that contractors provide workplace accommodations—such as light duty assignments or extra bathroom breaks—to any employee who needs them due to pregnancy, childbirth, or related medical conditions in circumstances in which the contractor provides comparable accommodations to other workers (such as those with disabilities or workplace injuries).

The new Rule adds in a section that sets forth obligations to contractors to offer employees protections from harassment and hostile work environments. The courts, EEOC, and the OFCCP had recognized for years that sex-based harassment can be a violation of Title VII and E.O. 11246—the guidelines now expressly state this.

The guidelines also address some concerns that contractors have had about their liability under the updated Rule. The Rule clarifies that contractors are subject to all the relevant parts related to the implementation of E.O.11246 (the 1970 guidelines stated that the interpretations were to be read in connection with part 60-1, which raised the question of whether contractors were subject only to that section).  The new guidelines also assure contractors that a good-faith effort to comply with affirmative action requirements of the rule—which obligate employers to expand employment opportunities for women—will not be considered a violation.  Furthermore, the updated Rule points out that employers may invoke RFRA as a basis for an exemption from E.O. 11246  and that such exemption requests will be considered on the facts of the individual case.  It clarifies that any application of the Rule that would violate RFRA is not required.  The Rule also makes it clear that religiously-affiliated contractors are permitted, when making employment decisions, to favor individuals of a particular religion.

The Rule also contains an appendix of suggested best practices for contractors. While contractors are not required to comply with this section, the DOL recommends that they consider implementing such practices. The appendix includes, among other things, avoiding the use of gender-specific job titles (such as “foreman”), designating single user restrooms, changing rooms, etc. as sex-neutral, providing appropriate time off and flexible workplace policies for men and women, and fostering an environment in which all employees feel that they are safe, welcome, and treated fairly.


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