At least two other measures already prevent the federal government from firing people for being transgender, so Obama's announcement is largely symbolic. Still, advocates hailed the move as a powerful act of recognition for transgender Americans by the first American president to even utter the word "transgender" in a speech.
"The majority of Fortune 500 companies already have nondiscrimination policies to protect their employees because it's the right thing to do and because many say it helps to retain and attract the best talent. And I agree. So if Congress won't act, I will," Obama told a supportive crowd in the East Room of the White House during a reception marking Lesbian, Gay, Bisexual and Transgender Pride Month.
The Human Rights Campaign, the nation's largest LGBT rights group, praised Obama's announcement as a "crucial and historic measure."
"Each and every American worker should be judged based on the work they do, and never because of a fundamental aspect of who they are — like their gender identity," said HRC President Chad Griffin.
Obama in 2009 signed a presidential memorandum saying the federal government shouldn't discriminate against workers for reasons unrelated to their job performance. While it didn't refer to transgender people specifically, the memo was perceived as offering blanket protection to workers whose gender identity doesn't correspond with their gender at birth.
And in a major ruling last year, the Equal Employment Opportunity Commission, a federal law enforcement agency, said that the section of the Civil Rights Act of 1964 that bars discrimination based on gender also applies to gender identity.
The White House declined to provide any details about the executive order that Obama has directed his staff to prepare for his signature. But LGBT rights groups said the order will likely mirror one that President Bill Clinton signed in 1998 that barred the federal government from firing workers for being gay and lesbian. Activists said they expected Obama's executive order would include language specifically referring to gender identity, enshrining those protections in a more formal manner.
The move comes just weeks after Obama announced plans to sign an executive order banning federal contractors from discriminating against millions of employees on the basis of their sexual orientation or gender identity. Obama had resisted signing that order in hopes Congress would pass a broader non-discrimination measure that would apply to nearly all employers, but changed course amid signs that lawmakers will not take it up in an election year.
In the White House reception, Obama thanked activists for supporting and guiding his administration on same-sex issues and equality policies. He cited influential figures in his own life, including an old college professor, who he said helped shape how he thinks about many of these issues. He also repeated his call for Congress to act to ban discrimination for all workers based on gender identity and sexual orientation.
"We've got a lot to be proud of, but obviously we can't grow complacent," Obama said. "We've got to defend the progress that we've made."