According to the Department of Labor, 420,000 entities are currently registered as potential federal contractors. While this figure might overestimate the number of groups eligible to work with the Department of Labor, it illustrates how far-reaching the federal-contracting system is. Marketplace recently reported that 4.1 million people work as federal contractors; add in subcontractors, and that number gets far larger.

At least some portion of federal contracts are awarded to religious groups—roughly 2,000 across the federal government each year, according to recent congressional testimony. In its new proposed rule, the Department of Labor claims that some of these groups have been “reluctant to participate as federal contractors” because they’re unsure whether they would be protected from discrimination claims if they hired or fired people on religious grounds.

This rule is intended to clarify that any kind of religious group can make employment decisions according to its tenets, provided it doesn’t violate existing laws that ban discrimination based on religion, sex, national origin, and other qualities. Labor officials went out of their way to make clear that the new rule wouldn’t protect religious groups that discriminate based on race, citing the landmark Supreme Court decision Bob Jones University v. United States, which found that government interests outweigh supposed religious objections to racial integration and more.

Read: Why Trump’s executive order on religious liberty left many conservatives dissatisfied

What’s unclear is whether the new rule includes forms of discrimination that are currently in legal limbo. In 2014, Obama signed an executive order making it illegal for federal contractors to fire or refuse to hire people on the basis of sexual orientation or gender identity. The new proposed rule does not undo that executive order. Conspicuously, it does not address protections for LGBTQ people at all, even though that was a major area of concern for faith leaders back in 2014. Administration officials may be using that ambiguity to their advantage. This fall, the Supreme Court will consider whether the workplace protections provided under Title VII of the Civil Rights Act of 1964 cover discrimination based on gender identity. Until the Court weighs in, and perhaps even after that, the status of LGBTQ rights in federal nondiscrimination laws will remain unclear.

Progressive advocacy groups such as the American Civil Liberties Union are alarmed by the Trump administration’s proposed new rule. “This is taxpayer-funded discrimination in the name of religion,” the ACLU tweeted today. “Period.” Mara Keisling, the executive director of the National Center for Transgender Equality, said in a statement that “religious freedom must be a shield to protect the marginalized, not a sword to attack them.”