October 25, 2016 at 9:12 am EDT | by Chris Johnson
Obama faces call to act on behalf of LGBT-owned businesses
NGLCC is leading LGBT advocates in calling on President Obama to take action for LGBT-owned businesses. (Washington Blade photo by Michael Key)

NGLCC is leading LGBT advocates in calling on President Obama to take action for LGBT-owned businesses. (Washington Blade photo by Michael Key)

With less than three months remaining before President Obama leaves office, LGBT advocates are calling on him to take action on behalf of LGBT-owned businesses seeking federal contracts before his time is up.

The initiative, led by the National Gay & Lesbian Chamber of Commerce, calls on President Obama to sign a memorandum or executive order to bar discrimination in federal contracting against business owners based on their LGBT status and to set goals affirmatively to include LGBT-owned businesses in federal procurement.

A memo to President Obama from LGBT advocates on the issue obtained by the Washington Bade emphasizes the added protections for LGBT-owned businesses would build on his legacy of advancing LGBT rights under his administration.

“There are an estimated 1.4 million LGBT-owned businesses in the United States – an untapped well of innovation, job creation, and economic growth,” the memo says. “However, no protections exist to prohibit discrimination against these businesses in federal contracting. The history of discrimination against LGBT individuals by the federal government and lack of any protections for LGBT-owned businesses perpetuates a sense among these businesses that the federal government is not open to them, and among major federal contractors that seeking out LGBT-owned suppliers is not necessary.”

The 17 signers of the NGLCC memo includes GLAAD, the Human Rights Campaign, the National Center for Transgender Equality, the National LGBTQ Task Force and PFLAG National.

The proposed action would be similar to the executive order President Obama signed in 2014 against anti-LGBT discrimination. But that directive prohibited discrimination against LGBT workers among contractors doing businesses with the federal government, not discrimination against the contractors themselves at the hand of the federal government.

A White House official was non-committal about taking such action on behalf of LGBT-owned businesses in response to an inquiry from the Blade.

“President Obama remains committed to expanding opportunity for American workers, strengthening American business and advancing equality for the LGBT community,” the official said. “We’ve received the letter and will reply at the appropriate time.”

The request is one of the few remaining from LGBT advocates after nearly eight years of advancements under the Obama administration. Another outstanding ask is a public assertion the ban on gender discrimination under Title VII of the Civil Rights Act of 1964 applies to lesbian, gay and bisexual people similar to the declaration the administration made for transgender people.

With fewer than 100 days left in the administration, Obama has limited time to issue new policies for contracting with the federal government, let alone to enable that action to take effect before he leaves office. The regulations for the 2014 order against anti-LGBT discrimination took nine months for the administration to draft and start enforcing.

Sam McClure, senior vice president of the National Gay & Lesbian Chamber of Commerce, said the memo isn’t a new request and represents an ongoing ask the organization issued at the start of the administration.

“Initially, the White House instructed us to reach out directly to individual agencies to secure commitments to encourage the utilization of certified LGBT business enterprises from secretaries,” McClure added. “We heeded that direction and secured the ever growing list of memorandums of understanding that we have. Since then, we’ve learned that the agencies can only do so much without government-wide direction from the White House. Accordingly, for several months, we’ve been in talks with administration leadership about executive action.”

Indeed, in July a bipartisan group of 44 U.S. House members sent a letter to Obama calling for action on behalf of LGBT-owned federal contractors. Among the signers was Rep. Richard Hanna (R-N.Y.) as well as gay lawmakers Reps. Mark Takano (D-Calif.), Mark Pocan (D-Wis.), Sean Patrick Maloney (D-N.Y.) and David Cicilline (D-R.I.).

As reported by the Washington Post earlier this month, the NGLCC also delivered a separate memo to Obama outlining the importance of federal action, making the case it would be “the next step to cementing this administration’s legacy as the most pro-equality in our nation’s history.”

McClure said taking this administration action would complete “unfinished work of LGBT equality, work on which this Administration has made historic strides.”

“We will continue to work on this issue until the last hours of this administration, just as we would be committed to continuing a conversation with successor administrations,” McClure said.

According to NGLCC, among the federal agencies that have MOUs for LGBT-owned businesses are the departments of commerce, labor, agriculture and transportation.

Jonathan Lovitz, another NGLCC senior vice president, said LGBT non-discrimination for contracts with the Defense Department and Department of Health & Human Services, which currently lack similar MOUs, are “top priorities,” but a government-wide policy is needed.

“What we’re going after here is full federal inclusion, so we’re looking at this much as the same way as marriage equality, being very positive as it was starting to grow and snowball state by state, but it still leaves people in those areas that are not protected feeling left out in the cold,” Lovitz said. “So what we want to make sure is working with the White House to get this to be fully cohesive across the entire spectrum of government contracting.”

Making the request to “affirmatively include LGBT-owned small businesses” in federal contracting, the memo points out the federal government has similar goals for businesses owned by disabled veterans and disadvantaged people, such as those affected by racism, but has nothing for LGBT businesses.

The LGBT movement has previously resisted the idea of making LGBT status a class eligible for affirmative action. In fact, the Employment Non-Discrimination Act was specifically written to prohibit the imposition of affirmative action for employers based on LGBT status. The Equality Act doesn’t mention it.

In contrast, the memo to the White House spells out “intentional inclusion” for LGBT-owned businesses in contracting would encourage fairness in the federal government.

“The intentional inclusion of LGBT-owned businesses in federal contracting will also benefit the federal government and American taxpayers by creating a larger and more visible pool of diverse suppliers who can provide the federal government and its prime contractors with more options to find contractors and subcontractors that provide good value for money,” the memo says.

The institution of “intentional inclusion” for LGBT-owned business may be complicated as a result of the 1995 U.S. Supreme Court decision in Adarand Constructors v. Peña, which determined racial classifications imposed by the federal government must be held to a standard of “strict scrutiny.”

Lovitz said the request “has nothing to do with affirmative action” and is more an effort to ensure inclusion of LGBT-owned businesses in government contracting.

“We’re looking at everything in this sort of post-Adarand world and what we really want to see happen is this full intentional inclusion of our businesses, starting with this non-discrimination order that encourage their participation in the process,” Lovitz said. “This is not about set asides, it’s not about hand-outs. What it is about is free and equal opportunity to compete alongside all other diverse communities.”

States have taken paths along these lines. In 2014, California adopted Assembly Bill 1678, which requires public utilities in California to extend to certified LGBT-owned business enterprises the same provisions currently granted to women-owned, ethnic minority-owned and disabled veteran-owned businesses. In September, Massachusetts Gov. Charlie Baker, a Republican, signed an executive order adding veteran-owned, disability-owned and LGBT-owned businesses to the state’s supplier diversity program.

Asked if the objective is numerical goals for LGBT-owned businesses in federal contracting, Lovitz replied, “Some day down the line, what we would love to see is LGBT included in the goals that currently exist for spending on diverse communities.”

“We need to start with the most fundamental principle,” Lovitz added. “That is, your government has your back and will not allow discrimination against you in federal contracting.”

Jody Huckaby, executive director of PFLAG National, said in a statement his organization as one of the 17 signers of the memo “advocates strongly for this action by the administration” on behalf of LGBT-owned businesses.

“PFLAG’s values are America’s values, and that means an even playing field — and an open and clear invitation — for all business owners to compete for federal contracts and subcontracts, including LGBTQ business owners,” Huckaby said. “Without it, this type of discrimination will continue to negatively affect PFLAG families across the country.”

Chris Johnson is Chief Political & White House Reporter for the Washington Blade. Johnson attends the daily White House press briefings and is a member of the White House Correspondents' Association. Follow Chris

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