Employment Law

In ‘Landmark’ Ruling, Court Says Sexual Orientation Discrimination is Illegal

Federal nondiscrimination law prohibits employers from discriminating against employees on the basis of their sexual orientation, a federal appeals court ruled for the first time on April 4.Sexual Orientation

The 7th U.S. Circuit Court of Appeals has upended 3 decades of precedent and set the issue up for review by the U.S. Supreme Court with its “landmark ruling,” according to Steven L. Brenneman, a partner at Fox, Swibel, Levin & Carroll, LLP, and an editor of the Illinois Employment Law Letter.

And while the decision applies only in Illinois, Indiana, and Wisconsin, Brent E. Siler, an attorney at Butler Snow said its effect reaches far beyond those three states. The ruling, combined with the federal government’s position on the issue, means that employers must ensure they do not discriminate based on sexual orientation, he told BLR®.

Background

Last summer, the 7th Circuit held—somewhat begrudgingly—that the prohibition on sex discrimination in Title VII of the Civil Rights Act of 1964 does not extend to sexual orientation.

At that time, the three-judge panel hearing Hively v. Ivy Tech Community College of Indiana said it was bound by the court’s own precedent and that to rule otherwise, it would need: (1) new legislation; (2) the Supreme Court’s intervention; or (3) to find that, as the high court stated in a 1992 decision, its previous interpretation “has proved to be intolerable simply in defying practical workability.”

The panel noted that perhaps the issue was nearing a tipping point with respect to the third factor. It is well settled that discrimination based on gender nonconformity qualifies as prohibited sex discrimination, the panel said, and as a practical matter, it is difficult to discuss sexual orientation without looking at gender nonconformity. But controlling precedent separates the two, so “this court must continue to extricate the gender nonconformity claims from the sexual orientation claims,” the panel concluded.

The panel acknowledged that this has created an “uncomfortable result”: The more visibly and stereotypically gay or lesbian a plaintiff behaves and looks, the more likely a court is to recognize a claim of gender nonconformity. “Plaintiffs who do not look, act, or appear to be gender non-conforming but are merely known to be or perceived to be gay or lesbian do not fare as well in the federal courts,” it said, calling this result an “odd state of affairs.”

The plaintiff asked the full court to rehear the case and it agreed.

En Banc Ruling

Rehearing the case en banc, the full court has now reversed the panel’s ruling.

Sexual orientation discrimination is, in fact, sex discrimination, according to the majority. The plaintiff in Hively alleged that she was fired because she is a lesbian. If you imagine her exact same situation but with a male employee, she was clearly subject to sex discrimination, the court said, addressing one of the plaintiff’s arguments.

The plaintiff alleged she was denied full-time employment and promotions because she was seen kissing her girlfriend goodbye in the employer’s parking lot. If the employer had seen a man kissing his girlfriend goodbye, he would not have been subject to the same discrimination, she alleged. Therefore, the discrimination was based solely on her gender, the theory goes.

This is the ultimate case of failure to conform to the female stereotype of heterosexuality, the court explained. A distinction between gender nonconformity and sexual orientation “does not exist at all,” Chief Judge Diana Wood wrote for the eight of the 11 judges. “It would require considerable calisthenics to remove the ‘sex’ from ‘sexual orientation.’”

Therefore, “the time has come to overrule our previous cases,” the majority continued. In a 1998 opinion, the Supreme Court concluded that the fact that Congress may not have anticipated a particular application of the law cannot stand in the way of the provisions of the law that are on the books.

“It is therefore neither here nor there that the Congress that enacted the Civil Rights Act in 1964 and chose to include sex as a prohibited basis for employment discrimination (no matter why it did so) may not have realized or understood the full scope of the words it chose,” Wood wrote (Hively v. Ivy Tech Community College of Indiana, No. 15-1720 (7th Cir. April 4, 2017)).

In a dissent, however, three judges took issue with the majority’s decision. “It’s understandable that the court is impatient to protect lesbians and gay men from workplace discrimination without waiting for Congress to act. Legislative change is arduous and can be slow to come,” they said. “But we’re not authorized to amend Title VII by interpretation.”

Employer Takeaway

While the 7th Circuit’s opinion applies in only three states, it affects employers nationwide, Siler told BLR.

First, the U.S. Equal Employment Opportunity Commission (EEOC), which is tasked with enforcing Title VII nationwide, already takes the position that the law prohibits sexual orientation discrimination and has been pursuing such claims, Siler noted.

And because the 7th Circuit’s decision puts it at odds with other federal courts of appeals, the Supreme Court may soon weigh in on the issue, both Brenneman and Siler said. Every other federal appellate court to have considered the question (nine out of the remaining 12) has held that Title VII doesn’t protect sexual orientation.

The 11th Circuit reaffirmed that stance just weeks ago in Evans v. Ga. Reg’l Hosp., No. 15-15234 (March 10, 2017) but could soon rehear that case; Lambda Legal, which represents the plaintiffs in both Evans and Hively, has already requested a rehearing en banc in Evans. A recent 2nd Circuit ruling on the issue, Christiansen v. Omnicom Group, Inc., No. 16‐748 (March 27, 2017), also could be reviewed en banc, Siler said.

According to various news reports, the employer in Hively has said that it doesn’t plan to ask the Supreme Court to hear the case. But if another one or two more appellate courts widen the split, it almost certainly would have to address the issue, Siler said.

For now, given the EEOC’s position and the circuit court split, employers should proceed with caution. “The current legal landscape is such that it’s already very dangerous to discriminate based on sexual orientation and hopefully most employers are taking steps to avoid that already,” he told BLR.

Rozlyn Fulgoni-Britton, an associate at Faegre Baker Daniels in Indianapolis, offered similar advice. In an article written for Indiana Employment Law Letter, she suggested that employers consider adding “sexual orientation” to their policies as an example of prohibited sex discrimination. Employers also might consider adding sexual orientation harassment to training materials, she said, adding that “[a]n ounce of prevention now could be the difference in an employer avoiding being in the news as one of the first sexual orientation discrimination cases litigated under the 7th Circuit’s new Title VII interpretation.”

Kate TornoneKate McGovern Tornone is an editor at BLR. She has almost 10 years’ experience covering a variety of employment law topics and currently writes for HR Daily Advisor and HR.BLR.com. Before coming to BLR, she served as editor of Thompson Information Services’ ADA and FLSA publications, co-authored the Guide to the ADA Amendments Act, and published several special reports. She graduated from The Catholic University of America in Washington, D.C., with a B.A. in media studies.