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Michigan Governor Furthers LGBT Protections in State Contracts and Bans State Agencies From Asking For Salary History

Hitting the ground running, Michigan’s new governor, Gretchen Whitmer, has imposed new requirements in the employment arena—but only for executive branch state employees and some contractors and grant and loan recipients. This could be a sign of things to come for employers everywhere in Michigan or at least a sign of building momentum within the state government.

In her first 10 days in office, Governor Whitmer signed 10 executive directives. Executive directives are limited in their power and apply only to the executive branch of the state government, meaning the governor’s directives only control internal policy of executive branch departments; they do not apply directly to private businesses.

As a follow up to former governor Rick Snyder’s Executive Directive 2018-07, which requires certain state contracts, grants, and loans to prohibit sexual orientation and gender identity discrimination as a term of the agreement, Governor Whitmer increased protections for lesbian, gay, bisexual, and transgender (LGBT) individuals. She has also issued an executive directive instituting a state government “don’t ask” policy with respect to applicants’ compensation histories, in order to reduce pay inequality.

Executive Directive 2019-09

With Executive Directive 2019-09, Governor Whitmer has extended the protections of Executive Directive 2018-07 by eliminating the exception that existed for 501(c)(3) religious organizations. Similar to the prior directive, effective immediately, all contracts, grants, and loans administered by a board, department, agency, or commission within the executive branch must include a requirement that the person or entity, any subcontractor under the contract, or sub-recipient under the grant or loan “not discriminate against an employee or an applicant for employment in hiring, any terms and conditions of employment, or matters related to employment because of religion, race, color, national origin, age, sex, height, weight, marital status, partisan considerations, or a disability or genetic information that is unrelated to the person’s ability to perform the duties of a particular job or position.” Within the definition of “sex,” the terms “gender identity or expression” and “sexual orientation” are included. By eliminating the nonprofit religious organization exception, this new executive directive expands the coverage of the prior, displaced directive.

As with the prior directive, the real effect of this directive will be seen in the contractual language that is included in the various agreements it covers. Only private employers party to, or subcontracting pursuant to, these contracts will be affected. However, the directive offers a glimpse at the governor’s views on—and perhaps even builds momentum toward—including gender identity and sexual orientation as protected characteristics in anti-discrimination laws as these laws continue to develop across the country.

Executive Directive 2019-10

With Executive Directive 2019-10, another employment-related executive directive, Governor Whitmer has prohibited executive branch officials from inquiring into an applicant’s compensation history until the department or agency makes a conditional offer of employment, complete with an explanation of proposed compensation. It is the governor’s view that “[a]sking job applicants about their salary histories can inappropriately perpetuate the gender wage gap by enabling prospective employers to offer lower salaries to women than they otherwise would.” The directive also prevents the hiring agency from gathering an applicant’s salary history information elsewhere, but it does not prevent an applicant from voluntarily disclosing that information.

This directive is consistent with a nationwide trend. Various state and local governments have already passed laws prohibiting prospective employers from asking about applicants’ salary histories. Due to potential differences between state and local laws, this has resulted in a patchwork of laws that employers must navigate.

To avoid such a patchwork of laws in Michigan, the Michigan Legislature passed Michigan Compiled Laws Section 123.1384, effective June 24, 2018, which prohibits a local government from adopting an ordinance regulating information requested “on an application for employment or during the interview process.” As it stands, there is no state law prohibiting all employers from inquiring as to an applicant’s compensation history. This latest directive, with its limited application to certain state agencies, is the only official action toward prohibiting such an inquiry in any respect.

It remains to be seen whether the underlying protections provided by these directives will ever make it outside of the executive branch of the state government. We will continue to monitor developments in this area, as they could lead to laws that would govern all employers in the state.

© 2019, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.

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About this Author

Josh Lushnat, Employment Litigation, Ogletree Deakins, Attorney, Detroit, Michigan
Associate

Josh is an associate in Ogletree Deakins’ Detroit Metro office. He represents employers in a variety of complex litigation matters in both state and federal courts. Mr. Lushnat also represents employers in various administrative proceedings and is involved in advising and counseling employers to reduce their potential exposure to litigation.

Prior to joining Ogletree Deakins, Josh practiced with a general practice business litigation firm handling a variety of matters, including employment litigation, commercial litigation, and class actions. He...

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