In ‘landmark’ ruling, appeals court says sexual orientation discrimination is illegal

April 06, 2017 - by: Kate McGovern Tornone 0 COMMENTS

Federal 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.

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

The decision applies only in Illinois, Indiana, and Wisconsin, but Brent E. Siler, an attorney at Butler Snow in Memphis and a contributor to Tennessee Employment Law Letter, said its effect reaches far beyond those three states. The ruling, combined with the federal government’s position on the issue, means employers must ensure they do not discriminate based on sexual orientation, Siler added.

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 did not extend to sexual orientation.

At the time, the three-judge panel hearing Hively v. Ivy Tech Community College of Indiana said it was bound by the court’s precedent. To rule otherwise, it would need (1) new legislation; (2) Supreme Court intervention; or (3) a finding 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 regarding the third factor. It’s 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 separated the two issues. “This court must continue to extricate the gender nonconformity claims from the sexual orientation claims,” the panel concluded.

The panel acknowledged that the court’s precedent created an “uncomfortable result”: The more visibly and stereotypically gay or lesbian an employee behaves and looks, the more likely a court will 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 the result an “odd state of affairs.”

The employee asked the full court to rehear the case, and it agreed to do so.

En banc ruling

After rehearing the case en banc, the full court reversed the panel’s ruling.

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

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

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

“The time has come to overrule our previous cases,” the majority continued. In a 1998 decision, the Supreme Court concluded that the fact that Congress may not have anticipated a particular application of a 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.

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,” the dissenting judges said. “But we’re not authorized to amend Title VII by interpretation.” Hively v. Ivy Tech Community College of Indiana, No. 15-1720 (7th Cir., April 4, 2017).

Employer take-home points

Although the 7th Circuit’s opinion applies in only three states, it affects employers nationwide, according to Siler.

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

Also, because the 7th Circuit’s decision puts it at odds with other federal appeals courts, the Supreme Court may soon weigh in on the issue, both Brenneman and Siler said. Every other federal appellate court that has considered the issue (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 it could soon rehear that case. Lambda Legal, which represents the plaintiffs in both Evans and Hively, has already requested an en banc rehearing 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 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,” Siler said.

Rozlyn Fulgoni-Britton, an associate at Faegre Baker Daniels in Indianapolis, offered similar advice. In an article 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 should consider adding sexual orientation harassment to their training materials, she said, adding that “an ounce of prevention now could help employers avoid being in the news as one of the first sexual orientation discrimination cases litigated under the 7th Circuit’s new Title VII interpretation.”

How should HR respond to the 7th Circuit’s ruling? Join Steven L. Brenneman and Kelly Smith-Haley, editors of Illinois Employment Law Letter and attorneys with Fox, Swibel, Levin & Carroll, LLP, as they present “New LGBT/Sexual Orientation Protections under Title VII: HR’s Roadmap for Ensuring Compliant Policies and Practices” on May 3, 2017. Brenneman and Smith-Haley will explain the practical impact the expanded scope of Title VII could have on your compliance obligations. Click here to register!

About Kate McGovern Tornone:
Kate Tornone is an editor at BLR. She has almost 10 years’ experience covering a variety of employment law topics. Before coming to BLR, she served as editor of Thompson Information Services’ ADA and FLSA publications, coauthored 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 bachelor of arts in media studies. Kate can be reached at ktornone@blr.com.
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