In previous legal updates, our team analyzed the recent executive order entitled Ending Illegal Discrimination and Restoring Merit-Based Opportunity, which encourages, but does not mandate, that private employers end certain Diversity, Equity, and Inclusion (DEI) practices that the order considers “illegal.” Despite the executive branch’s shift in its approach to DEI, the underlying legal framework for private employers has not changed. The same is true for the recent executive order on gender identity entitled “Defending Women from Gender Ideology Extremism and Restoring Biological Truth to the Federal Government.” While this order introduces significant changes for federal agencies and federal contractors, private employers remain largely unaffected at this time.
The Gender Identity Executive Order’s Direct Impact on Federal Employees
The executive order on gender identity establishes a federal policy defining sex as an immutable biological characteristic, effectively eliminating the recognition of gender identity within the federal government. The order directs all federal agencies and employees to enforce laws and policies based on the order’s definition of sex. It mandates that federal agencies revise documents, policies, and practices to align with the definitions of sex, male, and female outlined in the order, while removing references to gender and gender identity. For example, agency forms that previously allowed individuals to list their gender identity must now only reflect one’s biological sex as defined in the executive order. Simply put, the federal government will only recognize an individual’s gender as that assigned at birth, prohibiting affirming gender designations including non-binary or similar designations.
The Executive Order’s Application to Federal Contractors
Additionally, the order prohibits federal funding for programs or policies that “promote gender ideology.” The order specifically states:
The order also gives each federal agency head until May 20, 2025, to submit an update on the implementation of the order including “agency-imposed requirements on federally funded entities, including contractors, to achieve the policy of [the] order.”
While the order leaves enforcement requirements up to agency heads and does not mention the False Claims Act, the recent executive order regarding DEI programs requires federal contractors to certify they do not operate any programs promoting DEI that would violate any applicable federal anti-discrimination laws. It is possible that the federal agencies tasked with implementing the executive orders also may seek to enforce the gender identity order in a similar way. For now, the absence of explicit enforcement mechanisms leaves some uncertainty, but given the potential False Claims Act implications, consultation with legal counsel about the impact of the gender identity executive order is encouraged prior to signing any new federal contracts.
What This Means for Private Employers
Unlike the executive order targeting DEI practices, the executive order on gender identity does not reference private employers and likely is limited to federal employers, federal contractors, and recipients of federal funds. As such, private employers are under no obligation to endorse or adhere to the definitions of sex, gender, gender ideology, or gender identity found in the executive order.
Instead, private employers should remain mindful of their existing legal obligations that remain unchanged by the gender identity executive order. At least 25 states, and dozens of local jurisdictions, have enacted laws prohibiting discrimination in the workplace based on an individual’s gender identity or gender expression. Furthermore, Supreme Court precedent, which the executive branch cannot unilaterally reverse, has determined that discrimination based on sexual orientation or transgender status (or gender identity) violates Title VII of the Civil Rights Act of 1964. See Bostock v. Clayton County, 590 U.S. 644 (2020); see also Maner v. Dignity Health, 9 F.4th 1114 (2021) (explaining that the Court in Bostock concluded that discrimination based on sexual orientation and gender identity is sex discrimination under Title VII, even though the Court in Bostock used the term “transgender status” instead of “gender identity”). In a 1989 decision, the Supreme Court ruled that sex stereotyping can constitute illegal sex discrimination under Title VII if an employer discriminates against an individual for not conforming to societal norms regarding how people of a particular gender should look or behave. See Price Waterhouse v. Hopkins, 490 U.S. 228 (1989), superseded on other grounds by Comcast Corp. v. Nat’l Ass’n of Afr. Am.-Owned Media,589 U.S. 327 (2020).
With this background in mind, private employers should focus on maintaining compliance with existing legal frameworks while fostering an inclusive workplace environment, including supporting their employees who may have identities different than those outlined in the executive order.
Evolving Legal Landscape
This is a quickly evolving area of the law. While the executive order on gender identity signals a shift in the federal government’s policies, it has not altered the broader legal framework for private employers. Husch Blackwell will continue monitoring related legal developments including the effect of further executive orders and provide updates as information is available.
