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Seventh Circuit Breaks New Ground, Holding that Sexual Orientation is a Protected Characteristic Under Title VII of The Civil Rights Act

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By: Nathan Lennon

May 10, 2017

As practically every American is aware, the last two decades have experienced a revolution regarding the legal treatment of sexual orientation, ultimately culminating in the United States Supreme Court’s 2015 decision in Obergefell v. Hodges, 135 S. Ct. 2584 (2015), which held for the first time that same-sex couples have a fundamental right to marry.  After Obergefell, it appears that the next horizon in this quickly developing area of the law will be in the employment law context.  Most recently, the United States Court of Appeals for the Seventh Circuit issued a surprising and already controversial en banc decision in Hively v. Ivy Tech Community College of Indiana, 2017 U.S. App. LEXIS 5839 (7th Cir. Ind. Apr. 4, 2017), holding that Title VII of the Civil Rights Act of 1964 prohibits sexual orientation discrimination as an alternative form of “sex” discrimination. Not only is Hively notable as an en banc reversal of previous Seventh Circuit authority on this issue, but it has also created both a circuit split with the nine other circuit courts to have reviewed this issue, and the potential for significantly expanding litigation in the area of employment discrimination.

The Plaintiff, Kimberly Hively, is an openly lesbian college professor who claimed that her former employer, Ivy Tech Community College, discriminated against her on the basis of her sexual orientation through non-promotion. Hively alleged that after working for nine years as a part-time adjunct professor at Ivy Tech, she sought a promotion to a full time professorship through applying for six different full-time positions from 2009-2014.   Not only did Hively fail to receive the promotion that she was seeking, Ivy Tech allegedly cancelled Hively’s part-time teaching contract in 2014.  As a result of the failure to renew her contract and failure to promote her, Hively sued Ivy Tech under Title VII, which prohibits workplace discrimination “because of sex.”   After Ivy Tech filed a motion to dismiss, claiming that sexual orientation discrimination does not state a claim under Title VII’s sex discrimination provision, the Northern District of Indiana ruled against Hively in 2015, concluding that Title VII does not bar sexual orientation discrimination. See Hively v. Ivy Tech Cmty. College, 2015 U.S. Dist. LEXIS 25813 (N.D. Ind., Mar. 3, 2015).  A three judge panel of the 7th Circuit affirmed that decision in 2016—but noted that it was only doing so because it was bound by two 7th Circuit precedents from 2000, which had held that sexual orientation is not a protected class under Title VII.  Hively v. Ivy Tech Cmty. Coll., 830 F.3d 698 (7th Cir., 2016).

After the original Seventh Circuit panel urged the full court to reconsider the case en banc, the full court agreed, hearing arguments in November, 2016. The en banc court’s decision embraced three related reasons why Title VII’s ban on “sex” discrimination must also prohibit discrimination on the basis of sexual orientation. First, relying on precedents suggesting that failure to conform to a gender-based stereotype could be a form of sex discrimination, the majority reasoned that “Hively represents the ultimate case of failure to conform to the female stereotype,” because she broke the most basic female gender stereotype – seeking out romantic relationships with someone of the opposite sex. Second, the majority engaged in a “comparative” or “but-for” analysis of Hively’s claim, considering whether the outcome of Hively’s employment would have been different had the one critical variable – her sex – been different.  Finally, the majority also concluded that Hively’s cause of action arose from an “associational theory” of sex discrimination.  In so finding, the court reasoned that where employees are allegedly subject to discrimination based on the sex of their spouses or romantic partners, employers have engaged in “sex” based discrimination.  For all these reasons, the court concluded that Title VII must also prohibit “sex” discrimination in employment related to sexual orientation.

Initial reports after the Seventh Circuit’s decision in Hively indicate that the decision will not be appealed to the United States Supreme Court.  Nevertheless, now that a circuit split exists on this issue, the prospect of an appeal in a later case to the Supreme Court seems significantly increased, perhaps leading to the next showdown in this area of the law.  Indeed, it has been posited that the unstated purpose of the decision in Hively may well have been to create a circuit split on this issue.  As the majority in Hively observed, this issue had been settled law in both the Seventh Circuit and every other circuit to consider the issue. The only intervening change in the law with respect to sexual orientation has essentially been the Supreme Court’s decision in Obergefell, which of course did not involve interpretation of Title VII, but instead the requirements of the Due Process Clause of the 14th Amendment. 

In the meantime, Hively is also certain to result in additional potential exposure for employers due to increased employment litigation, as many commentators have suggested that this decision in effect extends Title VII’s prohibition to an entirely new protected class based on sexual orientation.  For employers in the Seventh Circuit (which includes Illinois, Wisconsin, and Indiana), Hively is a reminder that careful navigation of the now different legal standard is required, and employers are well advised to ensure that employees’ sexual orientation plays no role in employment decisions.  Indeed, Hively also suggests that employers outside the Seventh Circuit may also wish to review their employment policies and procedures, as Hively is almost certain to encourage plaintiffs in other appellate districts to seek similar en banc review elsewhere.

If you have any questions with respect to this decision, or the issue of sex discrimination, or any other employment practices liability question, please contact one of our Employment Practices Liability Practice Group attorneys.

This has been prepared for informational purposes only. It does not contain legal advice or legal opinion and should not be relied upon for individual situations. Nothing herein creates an attorney-client relationship between the Reader and Reminger. The information in this document is subject to change and the Reader should not rely on the statements in this document without first consulting legal counsel.

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