June 15, 2020Client Alert

Supreme Court Rules Title VII Extends to Sexual Orientation and Gender Identity

Today, the U.S. Supreme Court ruled by a 6-3 vote that Title VII of the Civil Rights Act of 1964 prohibits discrimination in the workplace because of an individual’s sexual orientation and gender identity. This long-awaited decision resolves a split among the federal courts of appeals, provides additional guidance for employers across the country, and harmonizes federal law with many state anti-discrimination statutes.

A.    Background History

Passed by Congress in 1964, Title VII prohibits discrimination in the workplace against individuals “because of . . . sex.” Since its enactment over half a century ago, the legal (and social) landscape has shifted significantly with respect to employment discrimination.

Today’s decision is another refinement of Title VII’s protections. In the seminal 1989 case Price Waterhouse v. Hopkins, the Supreme Court held discrimination on the basis of an employee’s failure to act in accordance with gender-based expectations violates Title VII. There, Ann Hopkins, a senior manager in a global professional accounting firm, sued her employer when her candidacy for partner was deferred and partners declined to re-submit her name for partnership, many of whom described her as “macho”; “overcompensated for being a woman”; and needing to “walk more femininely, talk more femininely, dress more femininely, wear make-up, have her hair styled, and wear jewelry” in order to increase her chances at partnership. The Supreme Court in Price Waterhouse held, “Congress intended to strike at the entire spectrum of disparate treatment of men and women resulting from sex stereotypes.” In a later case, the Supreme Court made it clear that “male on male harassment” was also discrimination “because of sex.” Oncale v. Sundowner Offshore Services, Inc., 523 U.S. 75 (1998).

Prior to today’s decision, federal courts of appeals had ruled inconsistently on the issue of sexual orientation as a form of “sex” discrimination. The Second and Seventh Circuits held Title VII prohibits sexual orientation discrimination as a form of “sex” discrimination, relying explicitly on Price Waterhouse and the Supreme Court’s 1998 decision in Oncale. Every other Circuit (except for the Federal Circuit) came to the opposite conclusion, finding Title VII did not prohibit sexual orientation discrimination.

If this were not enough, the executive branch of the federal government created more confusion for employers. On one hand, the Equal Employment Opportunity Commission (EEOC) (the agency responsible for enforcing Title VII) took the position that sexual orientation and gender identity discrimination is a form of sex-based discrimination because it necessarily entails treating an employee less favorably because of the employee’s sex. Meanwhile, the Department of Justice (DOJ) argued Title VII does not extend to sexual orientation discrimination claims.

This conflicting precedent set up the perfect storm for the Supreme Court to address this significant legal issue. The Court’s landmark decision was actually born out of three separate cases that had worked their way through the judiciary over the last several years, and which are examined below.

The first case was Bostock v. Clayton County, Georgia. Gerald Bostock was employed by the Clayton County Juvenile Court System. Bostock received favorable performance evaluations throughout his employment with the County and under his leadership, the County won national awards. He also happened to be gay and was involved with a gay recreational softball league. Bostock actively promoted the County’s guardian ad litem program within the league as a source of volunteer opportunities for league members.

Shortly after learning of Bostock’s participation in the league, and receiving “complaints” about his participation from members of the community, the County advised Bostock that it was conducting an internal audit on potential misuse of program funds, even though Bostock had never engaged in any misconduct with respect to program funds during his more than decade-long employment with the County. The County then terminated Bostock for conduct “unbecoming” of a County employee.

The second case was Altitude Express, Inc. v. Zarda. Donald Zarda worked as a skydiving instructor for Altitude Express. Zarda served as the instructor for a couple who had purchased tandem skydiving tickets. Zarda informed the woman that he was gay and “ha[d] an ex-husband to prove it.” Within days, Altitude Express terminated Zarda’s employment.

On the same day it heard oral arguments in Bostock and Altitude Express, the Court also heard oral argument on a related legal question: does Title VII protect transgender people against discrimination in employment?  The case was R.G. & G.R. Harris Funeral Homes, Inc. v. Equal Employment Opportunity Commission, et al. There, Aimee Stephens, a funeral director for family-owned Harris Homes, sued her employer after being terminated when she asked to present as a woman at work. Up until that time, Stephens had always presented as a male at work and used her then-legal name, “William.” Harris Homes, however, maintained a sex-based dress code for employees, which required male employees to wear suits and ties, and female employees to wear dresses or skirts. Shortly after learning of Stephens’ plans, Harris Homes fired Stephens, telling her “this is not going to work out.”

Each of the three employees sued their employers under Title VII, alleging discrimination on the basis of sex. In Bostock’s case, the Eleventh Circuit held Title VII does not encompass sexual orientation and, therefore, affirmed the dismissal of his lawsuit. In Zarda’s case, the Second Circuit reached the opposite result and concluded sexual orientation discrimination is motivated, at least in part, by sex and is thus a subset of sex discrimination for purposes of Title VII. Similarly, the Sixth Circuit ruled that transgender discrimination does violate Title VII. With this patchwork of cases before them, the stage was set for the Supreme Court to resolve these conflicting lower court determinations.

B.    The Supreme Court’s Decisions

Justice Gorsuch wrote for the majority of the Court. In holding Title VII’s prohibition against “sex” discrimination applies to characteristics like sexual orientation and gender identity, the Court reasoned it is impossible to discriminate against a person for being gay or transgender without discriminating against that individual based on sex. The Court noted, for instance, an employer with two employees of the same sex who are both attracted to men. The two employees are materially identical in every respect, except one is male and one is female. If the employer fires the male employee for no reason other than the fact he is attracted to men, the employer discriminates against him for traits it tolerates in his female coworker. The employer thus necessarily and intentionally singles out the employee to fire based in part on the employee’s sex. And, according to the Court, that is all that Title VII has ever required to establish liability.

The Court’s decision does not change the legal standard for otherwise proving a violation of Title VII. An employee must still establish the employer intentionally discriminated against the employee because of the employee’s sexual orientation or gender identity; although, these traits need not be the sole or primary cause of any adverse employment action. Nor does today’s decision eliminate Title VII’s statutory exception for religious organizations or other established legal doctrines protecting religious liberty interests. In fact, the Court specifically remarked these questions were not before it.

C.    Implications for Employers

Today’s decision, by all accounts, is a landmark federal civil rights decision that coincides with national Pride month across the country. Chief Justice Roberts joined the majority opinion, providing a decisive 6-3 decision that bested traditional conservative and liberal voting lines. Yet, the Court’s decision is hardly surprising given the immense progress at the state and local level to codify protections for LGBTQ employees and the Court’s 2015 decision legalizing same-sex marriage. Today’s decision also largely reflects the existing business realities and practices for most employers who have adopted “sex neutral” or inclusive hiring and employment practices independent of judicial or legislative pronouncements. For employers then, the practical impact will vary based on state(s) in which employers operate. The Court’s decision will likely have nominal impact in those states where discrimination based on sexual orientation and gender identity have already been outlawed. Employers in such states already should have antidiscrimination policies covering sexual orientation and gender identity.

The impact on employers operating in states where there are no state- or local-level protections for LGBTQ employees will be much greater. Currently 22 states (plus the District of Columbia) have state laws that expressly prohibit discrimination in the workplace on the basis of sexual orientation and gender identity, making today’s decision even more impactful for employers who operate in one or more of the 28 states without similar protections. Employers who operate in such states, and who do not already have policies covering sexual orientation and gender identity discrimination, should review their handbooks and other policies to ensure they are compliant with the Court’s decision. In those states, it is now unlawful to discriminate against individuals on the basis of their sexual orientation or gender identity. In addition, although not explicitly addressed by the Court’s decision today, all employers should review their dress code and other workplace policies to ensure those policies do not inadvertently discriminate against gay or transgender employees.

In short, the Court’s 6-3 ruling marks a major victory in the fight for civil rights for the LGBTQ community, and as the Court’s last line of its opinion commands: “An employer who fires an individual merely for being gay or transgender defies the law.”

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