06-12-2019
By Jill Rorschach, Esq.
On April 22, the Supreme Court agreed to review three pivotal cases relating to whether LGBT employees are protected under Title VII. The decision to hear these cases comes after months of consideration by the court on whether to take up this hotly debated issue. The question of federal protections for LGBT workers has become increasingly muddled as the Trump administration has worked to reverse previous executive orders and opinions, often in direct contradiction with the positions of its own agencies, including the EEOC. As many employers may be asking themselves what this means, now is a good time to look at the current landscape of legal rights for LGBT employees.
Federal Legislation
LGBT rights advocates have long argued that protections are necessary at the federal level due to the inconsistencies among state and local jurisdictions. While many states and municipalities have passed laws prohibiting discrimination on the basis of sexual orientation and gender identity or expression, according to the Human Rights Campaign, some 30 states still lack comprehensive protections for LGBT employees. Sixty-three percent of LGBT Americans say they have experienced discrimination based on their sexual orientation or gender identity.1 One in four LGBT employees report they have experienced employment discrimination within the last five years.2 As discrimination against LGBT individuals continues to persist, repeated attempts have been made since 1974 to pass federal legislation that would include protections against sexual orientation and gender identity discrimination under federal laws, including Title VII.3
Most recently, bipartisan legislation was again brought forth in the form of the Equality Act, reintroduced on March 13, 2019, as H.R. 5, S. 788, which would provide protections against discrimination in the areas of employment (by amending Title VII) as well as housing, credit, education, public spaces and services, federally funded programs, and jury service. The House passed the bill on May 17, by a vote of 236 to 173, with eight Republicans voting in favor of the legislation. While passage of the Equality Act was announced by House Speaker Nancy Pelosi as a major priority for the incoming Congress earlier this year, given the party polarization and the Republican majority in the upper chamber, it is not expected to pass the Senate. Despite having previously expressed support for protections against sexual orientation discrimination on the campaign trail, a Trump administration official has stated the bill goes too far and the president will oppose it.4
The Courts
In the absence of a congressional mandate, the courts have been left to apply their own interpretation of Title VII protections, specifically, to the meaning of discrimination “because of sex” since the term sex is not defined in the statute. While state and local governments as well as large employers were, in some cases, slower to recognize and include gender identity in their anti-discrimination laws and policies, the courts have historically been more inclined to consider discrimination claims based on gender identity than on sexual orientation. In fact, prior to 2017, all eleven Courts of Appeal who considered the question had concluded that Title VII does not apply to claims based on sexual orientation.5 Courts were split, however, on the question of gender identity, with several of the circuits having recognized Title VII claims based on the precedent in Price Waterhouse v. Hopkins. In Price Waterhouse, a female plaintiff brought a claim against her accounting firm employer for denying her partnership because the manner in which she dressed and behaved was not feminine enough. Finding that Hopkins had presented evidence of sex discrimination under Title VII, the Supreme Court held that, “in the… context of sex stereotyping, an employer who acts on the basis of a belief that a woman cannot be aggressive, or that she must not be, has acted on the basis of gender.”6 This holding provided the legal basis for the argument that sex stereotyping is a form of sex discrimination and is prohibited by Title VII, paving the way for successful expansion of the theory into gender identity and expression cases, and even in some cases to support a claim based on sexual orientation discrimination.7 Notably, the sex-stereotyping argument has also been asserted successfully in cases brought under Title IX of the Education Amendments of 1972, which prohibits discrimination by educational institutions that receive federal funding.8
In 2017, the seventh circuit became the first to reverse itself in Hively v. Ivy Tech Community College, recognizing a claim of sexual orientation discrimination under Title VII. In Hively, the plaintiff, a lesbian part-time professor, brought a claim against her employer after several unsuccessful applications for a full-time role, ultimately ending in the termination of her contract. Among other arguments, Hively held that same-sex orientation “represents the ultimate failure to conform” to gender stereotypes.9 Hively was followed shortly by two other pivotal cases involving claims based on sexual orientation. In Zarda v. Altitude Express, the second circuit recognized the claim of a gay skydiving instructor who alleged he was terminated because of his sexual orientation. The plaintiff died in a base jump accident four years after filing suit, but his sister continued to take his case forward on appeal after losing at the trial court. Ultimately, the district court agreed with the plaintiff’s argument, holding that sexual orientation is a “function of sex” and is therefore protected under Title VII.10 The employer appealed to the Supreme Court and Zarda is one of the three cases the Court has agreed to hear in its next term. The second of these cases is Bostock v. Clayton County in which the plaintiff, a gay welfare services coordinator who had been with the county for ten years, alleged he was terminated after he openly joined a gay softball league. Contrary to the holdings in Hively and Zarda, the eleventh circuit refused to recognize his sexual orientation discrimination claim under Title VII, bluntly denying his petition for a review by the full panel of the district court despite a scathing dissent by Judge Robin Rosenbaum.11
The third case the Supreme Court agreed to hear is R.G. and G.R. Harris Funeral Homes v. EEOC in which the sixth circuit followed its prior precedent in Smith v. City of Salem, recognizing a sex stereotyping claim as a permitted sex discrimination claim under Title VII. In Harris Funeral Homes, the plaintiff, a transgender woman who had worked as a funeral director for several years before transitioning, filed a charge with the EEOC when she was fired after notifying her employer of her intent to transition from male to female. The EEOC brought a lawsuit against the funeral home in 2014. While the district court recognized the sex stereotyping argument as valid under Title VII, it ultimately dismissed the plaintiff’s claim on the grounds that the funeral home was exempt from the requirements of Title VII as it applied to the plaintiff, under the Religious Freedom Restoration Act of 1993 (RFRA). Specifically, the funeral home argued that it was protected because its objections to the plaintiff changing her gender were based on its sincerely held belief that sex is an immutable God-given gift and should not be changed. In finding on behalf of the plaintiff, the sixth circuit both recognized that Title VII’s prohibition against sex discrimination covers sexual stereotyping, and rejected the argument that the funeral home was exempt under RFRA, stating in part that tolerance of plaintiff’s understanding of her gender was not the same as supporting it.12
As we wait for the Supreme Court to hear these cases, activity continues both in state legislatures and at the lower court levels as activists on both sides of the arguments continue to test the balance between basic anti-discrimination protections for LGBT individuals and asserting religious freedom arguments to defend discriminatory practices.13
Federal Agencies
Federal agencies have also dealt employers a patchwork of direction and conflicting positions over the last few years. As of January 1, 2017, several government agencies had taken strong positions on establishing federal protections for LGBT workers. In 2012, the EEOC ruled in Macy v. Holder that discrimination on the basis of gender identity is discrimination on the basis of sex. In its analysis, the EEOC found that Macy’s gender identity discrimination claim was within the EEOC’s jurisdiction under Title VII and, referencing the “sex stereotyping” theory recognized in Price Waterhouse, noted that “the term ‘gender’ encompasses not only a person's biological sex but also the cultural and social aspects associated with masculinity and femininity.”14 Three years later, the EEOC ruled in favor of recognizing a claim of sexual orientation discrimination as necessarily involving sex discrimination in Baldwin v. Foxx.15 The EEOC went on to issue guidance in 2015 and 2016, clarifying that it interprets and enforces Title VII to say the existing sex discrimination prohibitions include discrimination on the basis of sexual orientation and gender identity, and such prohibitions apply regardless of contrary state or local laws.16
In addition to actions taken by the EEOC and similar rulemaking by the Department of Health and Human Services, Attorney General Eric Holder issued a memorandum on December 15, 2014, stating the position of the Department of Justice (DOJ) that Title VII prohibits employers from taking into account “sex-based considerations, including discrimination based on an employee’s transitioning to, or identifying as, a different sex altogether.”17 While acknowledging the congressional intent at the time of Title VII’s enactment may not have contemplated claims relating to gender identity, Holder cited the Supreme Court’s reasoning in Oncale v. Sundowner Offshore Services, that “statutory prohibitions often go beyond the principal evil to cover reasonably comparable evils…”18 The DOJ and the Department of Education (DOE) went on to issue guidance in 2016 requiring that transgender individuals be treated according to their gender identity even if inconsistent with school records or identification documents.19 The Pentagon announced in July of 2016 that it was lifting the ban on transgender service members actively serving in the military.
With the change in administrations following the 2016 elections, however, many of these positions began to be reversed, starting with the rescission by the DOJ and DOE of its previous guidance on the treatment of transgender individuals in early 2017.20 This action was quickly followed by the reinstatement of the ban on transgender servicemembers in the military, first tweeted in July 2017 and then officially issued in an August memorandum. After facing down legal battles on multiple fronts over the ban, the Department of Defense recently issued a formal policy banning transgender servicemembers unless they “serve in their biological sex” and “do not seek to undergo gender transition.”21 Later in 2017, Attorney General Jeff Sessions issued a memorandum reversing the DOJ’s previous position and stating that discrimination on the basis of gender identity is not discrimination because of sex, per se. The memorandum goes on to argue the ordinary definition of sex should apply in interpreting Title VII’s protections (meaning biologically male or female) and that if Congress had intended to include gender identity, it would have stated that explicitly as it has in other statutes. Finally, Sessions acknowledged the “sex stereotyping” argument, but limited its application to those situations where the stereotyping resulted in disparate treatment between the sexes.22
Despite these reversals, the EEOC has not yet withdrawn or changed its previous guidance interpreting the protections against sex discrimination in Title VII to include sexual orientation and gender identity. The EEOC had announced protections for LGBT employees as a strategic priority under two-term Commissioner Chai Feldblum, the first openly lesbian commissioner at the EEOC.23 President Trump nominated her for a third term, however, her nomination was blocked by the Senate confirmation committee chair. Most recently, the Senate confirmed Janet Dhillon as the new chair of the EEOC, after a lengthy confirmation period during which the EEOC did not have a quorum. With the confirmation of Ms. Dhillon, the EEOC can now resume issuing guidance to employers, making decisions regarding significant litigation and exercising its rulemaking authority. Ms. Dhillon, who formerly served as general counsel for Burlington Stores, JC Penny, and US Airways, was asked during the confirmation hearing about her view of workplace protections for LGBT employees and responded that she could not fully support the EEOC’s current position, promising to review it further.24 If it is any indication of her thinking on the topic, Ms. Dhillon posted a message on the EEOC website in recognition of Pride Month, noting the agency’s “role in defending everyone’s right to be treated fairly at work, no matter who they are….”25
What Does This Mean for Organizations and Employers?
With the legislature, the courts and many federal agencies in conflict on the topic of federal protections for LGBT individuals, employers, schools and other organizations may be contemplating changes in their policies or practices. Given the Supreme Court’s long-awaited decision to grant review of the three ground-breaking cases discussed above in the fall term, it will likely be sometime in the first half of 2020 before a decision is rendered. It remains to be seen whether the new EEOC chair will move to act before that on the issue, especially given some of its other priorities such as the new EEO-1 requirements. In sharp contrast to the confusion and conflict among these institutions and agencies, statistics indicate a majority of Americans support protections for LGBT individuals. Non-partisan polling indicates that 69% of Americans favor laws that would protect LGBT individuals from discrimination in employment, housing and public accommodations.26 According to the Human Rights Campaign, more than 200 of the nation’s leading companies, employing more than 11 million U.S. employees, have joined its Business Coalition for the Equality Act.27 Given those continuing trends in public opinion and the pending review by the Supreme Court, employers would be wise to stay the course in accordance with the current EEOC guidance, developing and maintaining policies designed to cultivate a diverse and inclusive culture and to attract, engage and retain the best talent.