Saying that discrimination has "no place in America's armed forces," Defense Secretary Ash Carter on Tuesday added sexual orientation to the list of nondiscrimination protections under the military's equal opportunity program.
The update adds the preference to the list of protective classes that includes race, creed, color, national origin and gender that cannot be considered in military recruitment, hiring, firing and promotions.
It gives troops the same protections against discrimination as civilian equal employment opportunity programs, providing a pathway for service members to file discrimination complaints based on sexual orientation through the military equal opportunity system.
"The department's experience during the years since [the 'don't ask, don't tell policy] was repealed indicates that the MEO program gives complainants greater access to a broader range of resolution options, and gives commanders access to trained equal opportunity advisers during the complaints process," Pentagon spokesman Navy Lt. Cmdr. Nathan Christensen explained.
The announcement was met with loud applause at the event where Carter was speaking, a Lesbian, Gay, Bisexual and Transgender Pride Month celebration at the Pentagon.
Carter said the military must be a "meritocracy" and should have a "lasting commitment to living the values we defend."
"We must start from a position of inclusivity, not exclusivity," he said.
While the change does not specifically address discrimination against transgender individuals, the move signals another step in the department's effort to remove barriers for all troops to serve.
The repeal of "don't ask, don't tell" in 2011 allowed gays and lesbians to serve openly in the military but did not cover bans on transgender personnel because gender dysphoria — the term for those who believe they are one gender but born into the body of the opposite gender — was characterized in Defense Department policies as a mental health disorder incompatible with military service.
But the Defense Department has quietly been shifting from that position.
The Army and Air Force in the past few months have implemented policies that require senior officials to decide whether transgender troops can be involuntarily separated.
The changes are widely seen as an effort to ensure that policies banning only those whose condition interferes with duty or prevents satisfactory performance are followed.
Carter said adding sexual orientation to the anti-discrimination policy will help ensure that the military population reflects the national character and contribute to a stronger force that appeals to the next generation of recruits.
"Young Americans are more diverse, more open and tolerant than past generations. ... It's the only way to compete in the 21st century," Carter said.
Underscoring the department's commitment to diversity, a panel at the LGBT event included Amanda Simpson, a transgender woman who serves as executive director of the Army Office of Energy Initiatives.
Simpson is a former test pilot who transitioned while working in the late 2000s for Raytheon and is thought to be the first transgender political appointee, having been named by President Obama as senior technical adviser to the Commerce Department in 2010.
"I don't have this position because I'm transgender. I'm serving because I happen to be the best person for the job," Simpson said.
Shortly after the announcement, Human Rights Campaign Government Affairs Director David Stacy applauded Carter's leadership but said regulations must be updated to ensure all troops can serve openly.
"Secretary Carter should implement these vital changes and also extend these same nondiscrimination protections to the estimated 15,500 transgender troops currently serving in the military," Stacy said.
The American Military Partners Association also praised the announcement, calling it "long overdue" for gay and lesbian service members who, along with their spouses, have endured discrimination.
"But it's incredibly important to note that we absolutely cannot leave our transgender service members behind," AMPA President Ashley Broadway-Mack said.