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Executive order protects LGBT employees

Regulations for federal contractors due in October

Executive order protects LGBT employees White House photo

Faced with an uncooperative Congress, President Obama has resorted to executive orders to effect change. On July 21, he signed an order prohibiting federal contractors from employment discrimination on the basis of sexual orientation or gender identity.

The US Department of Labor is due to issue regulations fleshing out the Executive Order this month.

Covers banks with 50 or more employees

As long as the Office of Federal Contract Compliance Programs maintains its position that the relationship with FDIC constitutes a “contract of insurance” as intended by Executive Order 11246, banks with 50 or more employees will continue to be counted as federal contractors and will be subject to the new presidential order, as well as affirmative action obligations with regard to women, minorities, veterans, and individuals with disabilities.

A rising tide

The President’s move reflects a broad cultural shift.

While gay marriage has been the focus of public debate—with the overturning of the Defense of Marriage Act (DOMA) and state law changes and challenges—subtler moves have taken place in the workplace. Twenty-one states and the District of Columbia now have laws prohibiting employment discrimination based on sexual orientation, and 18 states and D.C. also prohibit discrimination based on gender identity. 

The Equal Employment Opportunity Commission (EEOC) has taken the position that discrimination based on gender identity is impermissible under Title VII. Several federal and state courts have held that sexual stereotyping is a form of gender discrimination.

Congress tends to lag behind societal trends. But even there the Employment Non-Discrimination Act (ENDA) was passed by the Senate with bi-partisan support last November.

ENDA would have prohibited discrimination on the basis of sexual orientation and gender identity in virtually all US workplaces, rather than the 21% of the workforce covered under the Executive Order as federal contractors. However, there was never a real chance of ENDA passing in the House before the November elections. Hence the President’s order.

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Regardless of Congress’ failure to enact nationwide protections, many companies—large and small—have already amended their equal employment opportunity policies to include sexual orientation and gender identity in the list of protected categories.

Has your bank made the change yet?

If not, now is the time to consider revising your equal employment opportunity policy to reflect the movement towards inclusion.

Transgender employees and applicants

From network sitcoms to the Senate, openly gay individuals have won acceptance that would have been unthinkable 20 years ago.

Banks are generally on the conservative end of the workplace spectrum, but even so it seems unlikely that the prohibition of sexual orientation discrimination will pose a significant problem.

However, many small banks may have never confronted the issues posed by a transgender applicant or employee. Merely amending your EEO policy to include “gender identity” will not be enough. Issues of discrimination and harassment—and liability for the bank—arise from the reactions of managers and co-workers to individuals who do not fit their expectations of “normal.”

Approaches to consider

Here are some best practices to adopt in anticipation of the Executive Order:

Training: Incorporate the topics of gender identity and expression (as well as sexual orientation) into your EEO and harassment training for managers and employees.

Treat transgender employees’ status confidentially: The Family and Medical Leave Act (FMLA), Americans with Disabilities Act (ADA), Health Insurance Portability and Accountability Act (HIPAA), and Genetic Information Nondiscrimination Act (GINA), all protect personal health information and require that employees’ medical information is kept confidential. This applies to transgender employees too.

Personnel records: If an employee tells you about a gender transition, you should recognize the new identity. Change the employee’s name and gender on personnel records, email lists, directories, and business cards. Update photos on identification badges and your website.

Restrooms: Employees should use the facilities that match their gender presentation, regardless of their stage of transition. Ask the transitioning employee when the employee is comfortable switching to the bathroom assigned to the other gender.

Dress code: The bank is entitled to have a dress and grooming code. However, you should avoid gender stereotypes: Don’t make gender-specific lists of clothes that men and women should wear in the workplace. Better to just require all employees to dress professionally.

Keep calm and carry on

The Executive Order on sexual orientation and gender identity is an opportunity for human resource professionals and bank management generally to show leadership in redefining policy and educating the workforce about these issues.

And keep an eye out for those regulations, coming soon.

This blog post was co-authored by Steve Greene, President and co-founder of Employment Law Compliance, Inc.

Marian Exall

Marian Exall ( recently retired after a long career as an employment lawyer and HR professional with more than 25 years' experience advising banks and other employers on compliance issues. She was a principal and co-founder of Employment Law Compliance, Inc. which provides HR compliance solutions to banks. For more information on this or other employment compliance topics, please call Employment Law Compliance at 866-801-6302 or go to

Now retired from blogging as well, Marian also writes fiction. Her latest novel is a mystery called A Slippery Slope. For more information and to order, go to

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