U.S. President Barack Obama hopes to protect 14 million LGBT employees from discrimination with an executive order.
Chuck Kennedy -- The White House
By Cameron Chisholm
June 20, 2014

On Monday, the White House announced Barack Obama’s plan to complete his administration’s LGBT trifecta. After openly supporting same-sex marriage and striking down the military’s “don’t ask, don’t tell” policy, the President of the United States also hopes to ban workplace discrimination based on employees’ sexual orientation and gender identity.

Obama first promised to combat this issue during his 2008 campaign. It took six years, but he’s finally making good on his word. ENDA (the Employee Non-Discrimination Act), which would prohibit all employers from discriminating based on sexual orientation and gender identity, was passed by the Senate in November but still awaits a vote in the House of Representatives. As the clock ticks on Obama’s second term, the President has little choice but to take action. Though it doesn’t include all the policies outlined in ENDA, the executive order the president’s team is drafting hopes to protect LGBT employees working for federal contractors.

Roberta Kaplan, the Paul, Weiss partner who was instrumental in striking down the Defense of Marriage Act in 2013, says this isn’t the first time a president used his executive order power to ban discrimination. In 1965, Lyndon B. Johnson signed Executive Order 11246, which ended workplace discrimination by federal contractors based on “race, color, religion, sex or national origin.” “This time, however, the order prohibits discrimination against gay Americans, as opposed to the 1965 order that prohibited discrimination against African-Americans,” says Kaplan. “It is incredibly moving, not to mention historic, that this is being done by the first African-American president.”

In 29 states, it‘s still not explicitly illegal to discriminate against both employees and prospective hires based on sexual orientation—and 32 states allow workplace discrimination based on gender identity, according to the Human Rights Campaign, America’s largest civil rights organization. Employers are thus able to deny LGBT employees raises or promotions. They can even fire workers based on perceived sexual orientation and reject job applicants based on the same criteria.

Obama’s executive order hopes to stop such practices. “Even in these states that don’t have statewide workplace protections, a business’s status as a federal contractor will take precedence, ” clarifies Fred Sainz, a spokesperson for the Human Rights Campaign. According to the Williams Institute at the UCLA School of Law, of the top 50 federal contractors, 86% prohibit sexual orientation-based discrimination, while 61% have banned discriminatory practices based on gender identity. Their research estimates that, along with recent nondiscrimination laws at the state level, the White House ban will prevent employers from discriminating against 14 million LGBT workers.

The Human Rights Campaign specifically cites the Exxon Mobil Corporation (XOM) as a company that will be affected by the executive order. The oil giant wins hundreds of millions in annual federal contracts and its shareholders have voted against non-discrimination policies 17 times. Though it has informal non-discrimination policies in place, Exxon Mobil has no official policy protecting LGBT employees.“Obviously we will comply with the executive order,” a spokesperson said. “We comply with all laws.”

John Browne, the former CEO of BP (BP), recently wrote in Fortune about remaining mum on his sexual orientation as he climbed the corporate ladder. “It is the responsibility of the LGBT minority to overcome their fears. Only they can decide to live a unified private and public life,” he said. “But only straight people can create the environment of acceptance, understanding and inclusion, which makes that decision easier.”

Beth Brooke-Marciniak, Ernst & Young’s global vice chair of public policy, also chimed in on Obama’s executive order. “Today, business is increasingly global and complex and we need all employees to be empowered to perform at their best for individuals and businesses to thrive,” wrote Brooke-Marciniak, who is No. 2 on OUTstanding’s 2014 list of the top 100 LGBT business leaders, in an email to Fortune on Thursday. “Inclusion is not just a matter of fairness—it helps us leverage many different dimensions of diversity to benefit businesses and our broader economies.”

Discrimination is a nuanced issue, tough to completely clobber with one order from above. But banning it is smart business–and Obama’s leadership on this specific issue is certainly a step in the right direction.

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