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Murkiness Abounds Regarding the Extent of Title VII’s Application to Sexual Orientation Discrimination in the Workplace

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By Holly Marie Wilson

Employment Liability Newsletter
August 2018

EEOC, District Courts and Circuit Courts vary in interpretation; will the United States Supreme Court be able to put this issue to rest?

Whether individuals should be afforded legal protection based upon their sexual orientation is a topic of much debate around the country. Groups both for and against such recognition dominate the news cycle – especially during election years. The manner in which the law treats such individuals is evolving on a daily basis, on local, state and federal levels. One such area of change concerns the courts’ interpretation of Title VII and whether it should be extended to encompass sexual orientation-related claims. Historically, federal courts of appeals have not interpreted Title VII, which prohibits workplace discrimination and harassment on the basis of race, color, national origin, religion, and sex, to extend to sexual orientation-discrimination claims. More importantly, the United States Supreme Court has remained silent on this issue, leaving the interpretation of Title VII to circuit courts, which, to date, are split on the issue.

Beginning in July 2015, the Equal Opportunity Employment Commission (“EEOC”) took the position in Baldwin v. Foxx, EEOC Appeal No. 0120133080, 2015 EE0PUB LEXIS 1905, at *31 (July 15, 2015), that Title VII’s prohibition against sex discrimination encompassed sexual orientation discrimination. In June 2016, the EEOC began interpreting and enforcing Title VII’s prohibition of sex discrimination to forbid any employment discrimination based upon gender identity or sexual orientation.

Significantly, the Seventh Circuit became the first circuit court of the U.S. Court of Appeals to hold that discrimination on the basis of sexual orientation is a form of sex discrimination encompassed by Title VII. Hively v. Ivy Tech Cmty. Coll. Of Ind., 853 F.3d 339, 351-52 (7th Cir. 2017). In Hively, an openly lesbian adjunct professor at a community college brought a Title VII claim against the college for sexual orientation discrimination. Id. at 341. Hively’s discrimination claim arose after her employer denied her application for a full-time position six separate times between 2009 and 2014. Id. Finally, in July of 2014, the college failed to renew her part-time contract. Id. The professor sued, alleging that the treatment she received was based upon her sexual orientation.

The panel in Hively addressed two approaches to determining whether Title VII prohibits sexual orientation discrimination: the comparative method and the associational theory. Id. at 345. Under the comparative method, the fundamental question turns upon whether the complaining party’s protected characteristic played a role in the adverse employment decision. Id. More specifically, the en banc Hively Court determined that “any discomfort, disapproval, or job decision based on the fact that the complainant—woman or man—dresses differently, speaks differently, or dates or marries a same-sex partner, is a reaction purely and simply based on sex.” Id. at 347. Indeed, the Seventh Circuit panel held that there was no difference between Hively’s claim and a claim brought by an individual alleging discrimination for failing to conform to sex stereotypes, because if Hively were a man attracted to woman, her employer would have renewed her contract. Id. Under this theory, the question turned upon the plaintiff’s own protected characteristic. Id.

Next, under the associational theory, a prohibition on discrimination applies to a plaintiff who is “discriminated against because of the protected characteristic of one with whom she associates.” Id. at 347. Notably, the Supreme Court adopted this approach in Loving v. Virginia, 388 U.S. 1, 87 S. Ct. 1817, 18 L.Ed. 2d 1010 (1967). In Loving, the Court found that if the race of the parties were changed, this would change the outcome of the decision. The question then becomes whether the alleged discrimination hinges upon the distinction of sex. Id. at 349.

Ultimately, based upon either theory, sexual orientation discrimination “does not exist without taking the victim’s biological sex (either as observed at birth or as modified, in the case of transsexuals) into account.” Id. at 347. This means that, to its core, sexual orientation discrimination is discrimination based upon sex, warranting its protection under Title VII.

Similar to the Seventh Circuit’s reasoning, the Second Circuit likewise held that discriminating against a homosexual employee constitutes unlawful sex discrimination in violation of Title VII. Zarda v. Altitude Express, No. 15-3775, 2018 U.S. App. LEXIS 4608 (2d Cir. Feb. 26, 2018) (en banc). Zarda involved a plaintiff-skydiving instructor who was terminated after he informed a female customer that he was gay to relieve any awkwardness that he believed may accompany a tandem skydiving lesson. Id. at **11-12. The Second Circuit held that in order to prevail under Title VII, Zarda needed to demonstrate that his physical sex, not his sexual orientation, was a substantial or motivating factor contributing to his employer’s decision to terminate his employment. Id. at **18-19. After a three-judge panel of the Second Circuit initially held that he could not meet this burden, the entire circuit, sitting en banc, revisited the issue and determined the following:

To determine whether a trait operates as a proxy for sex, we ask whether the employee would have been treated differently “but for” his or her sex. In the context of sexual orientation, a woman who is subject to an adverse employment action because she is attracted to women would have been treated differently if she had been a man who was attracted to women. We can therefore conclude that sexual orientation is a function of sex and, by extension, sexual orientation discrimination is a subset of sex discrimination.

Id. at *35.

Pertinently, the United States Department of Justice (“DOJ”) filed an amicus brief in Zarda, fully asserting the position that Title VII of the Civil Rights Act of 1964 does not cover employment discrimination based upon sexual orientation. Specifically, the DOJ stated that it must be left to Congress to amend the language of Title VII to include sexual orientation as a prohibited means of employment discrimination. This position directly conflicts with the position taken by the EEOC, supra, which remarkably filed a separate amicus brief in the Zarda case disagreeing with the DOJ’s position.

The Zarda en banc decision could have been forecast by a decision from the Southern District Court of New York, in which the district court found that a claim for employment discrimination based on sexual orientation was properly brought under Title VII. Philpott v. New York, 252 F. Supp. 3d 313, 316-17 (S.D.N.Y. 2017). Philpott was a former Vice President of Student Affairs at SUNY’s College of Optometry. Id. at 315. He claimed to be discriminated against and harassed because of his sexual orientation. Id. Specifically, Philpott alleged that over the course of several years, SUNY’s optometry president continuously made discriminatory and derogatory comments to Philpott, as well as excluded him from meetings and important projects because of his sexual orientation. Id. at 317.

The Southern District of New York based its reasoning upon the Second Circuit’s concurrence in Christiansen v. Omnicom Group, Inc., 852 F.3d 195 (2d Cir. 2017) and the Seventh Circuit’s en banc holding in Hively. In his Christiansen concurrence, Chief Judge Katzmann disagreed with the majority’s holding that plaintiff’s claim amounted to a gender stereotyping claim cognizable under Title VII, but plaintiff’s claim was not cognizable if the claim merely alleged sexual orientation discrimination. Christiansen, 852 F.2d at 202. Specifically, he opined that “sexual orientation discrimination is sex discrimination for the simple reason that such discrimination treats otherwise similarly-situated people differently solely because of their sex.” Id.

More recently, the Sixth Circuit Court of Appeals, joining the Seventh and Second Circuits, agreed that discrimination based on an individual’s transgender status is to be considered discrimination under Title VII. The EEOC v. R.G. & G.R. Harris Funeral Homes, Inc., 884 F.3d 560 (6th Cir. 2017), decision centers on Aimee Stephens, a transgender woman who presented as a male when hired by the defendant-funeral home. The funeral home had a dress code that required men to wear suits and women to wear skirts. In 2013, Stephens told her employer that she planned to transition from male to female and would dress as a woman while at work. Soon after this announcement, Stephens was fired because she “was no longer going to represent [herself] as a man” and the “public would [not] be accepting of [her] transition.”

In finding the employer’s conduct violated Title VII, the Court first noted that discrimination on the basis of transgender/transitioning status is inherently sex discrimination. The funeral home owner admitted that Stephens was terminated for expressing an intent to dress like a female. The Court reasoned that discrimination based on failure to conform to stereotypical gender norms is analogous to discrimination based on gender and biology – conduct prohibited by Title VII.

Second, the Sixth Circuit found that the funeral home was not protected by a religious exemption. The Religious Freedom Restoration Act (“RFRA”) prohibits the government from substantially burdening an individual’s exercise of religion unless the burden (1) is in furtherance of a compelling governmental interest; and (2) is the least restrictive means of furthering that interest. 42 U.S.C. § 2000bb-1. The funeral home argued that continuing to employ Stephens during her transition would distract grieving families and inhibit the funeral home’s ability to carry out the religious exercise of serving its customers. The Court disagreed, noting that the funeral home’s belief that customers would be distracted by Stephens was premised on presumed biases. A religious employer, however, cannot discriminate or establish a substantial burden under RFRA based on presumed bias.

Third, the Court found that even if Title VII created a “substantial burden” under RFRA, this is still the least restrictive means of furthering the compelling government interest of eliminating workplace discrimination. Adopting a gender-neutral dress code, as suggested by the District Court, was not the least restrictive means because Stephens was terminated when she would no longer present as a man. As such, the funeral home’s reason for termination was not limited to attire, but extended to Stephens’ gender identity and behavior, which are protected under Title VII.

In contrast to the decisions of the Seventh and Second Circuits described above, the Eleventh Circuit took a contrary position and held that Title VII does not prohibit sexual orientation discrimination. Evans v. Georgia Regional Hosp., 850 F.3d 1248 (11th Cir. 2017), cert. denied, 138 S. Ct. 557 (2017). In Evans, a female security guard for an Atlanta-based hospital alleged that she faced continuous harassment and even physical assault because of her sexual orientation. The Eleventh Circuit refused to overturn its own precedent, holding that a sexual orientation discrimination claim is not actionable under Title VII. Id. at 1257. Instead, the Court held that it is up to the Supreme Court to overturn the circuit’s precedent. Id.

On April 11, 2017, following the Eleventh Circuit’s refusal of Ms. Evans’ claim and in light of Hively’s holding, four members of Congress asked permission to file an amicus brief in support of Ms. Evans’ petition for an en banc review of the Eleventh Circuit’s decision. Senators Jeffrey A. Merkley (D-Ore.), Tammy Baldwin (D-Wis.), and Cory A. Booker (D-N.J.), and Rep. David N. Cicilline (D-R.I.), had previously co-sponsored the Equality Act of 2015, which was an unsuccessful bipartisan effort to add “sexual orientation” and “gender identity” to Title VII.

The prominent members of Congress criticized the panel’s reliance on the Fifth Circuit’s decision in Blum v. Gulf Oil Corp., 597 F.2d 936 (5th Cir. 1979), arguing that the Supreme Court’s holding in Price Waterhouse explicitly overruled Blum’s holding that discrimination on the basis of gender non-conformity is not sex discrimination. See Price Waterhouse v Hopkins, 490 U.S. 228 (1989) (reasoning that the burden is on an employer to demonstrate by clear and convincing evidence that the termination of employment still would have occurred regardless of the plaintiff’s gender). The American Civil Liberties Union (“ACLU”) also requested permission to file an amicus brief supporting Evans along with several women’s groups, including the National Center for Lesbian Rights and the GLBTQ Legal Advocates & Defenders (“GLAD”).

Despite the strong backing, the Eleventh Circuit denied the petition for a rehearing en banc on July 6, 2017. Following this denial, Ms. Evans filed a petition for certiorari with Supreme Court on September 7, 2017, giving the highest court of jurisdiction the opportunity to put to rest confusion among courts in deciding whether Title VII protection extends to individuals discriminated against solely because of their sexual orientation. However, on December 11, 2017, the U.S. Supreme Court denied Evans’ petition, leading many to ponder whether such a denial represents the Court’s thinly veiled repudiation of the logic relied upon by the Second Circuit in Zarda and the Seventh Circuit in Hively.

In a holding similar to Evans, the U.S. District Court for the Eastern District of Pennsylvania recently deferred to Third Circuit Court of Appeals’ precedent that found sexual discrimination claims are not covered under Title VII. Coleman v. Amerihealth Caritas, No. 16-3652, 2017 U.S. Dist. LEXIS 85319, at *13 (E.D. Pa. June 2, 2017). However, the Eastern District acknowledged that, although it was bound by this precedent to dismiss plaintiff’s Title VII claim, “it does so with the recognition that ‘the nature of injustice is that we may not always see it in our times.’” Id. (citing Obergefell v. Hodges, 135 S.Ct. 2584, 2598, 192 L.Ed.2d 609 (2015)).

Until such time as this significant split of the federal circuit courts of appeals is resolved, careful attention must be paid to all controlling state and local law, as well as local ordinances, to determine the possible ramifications of taking a position on this issue. Employers should proactively review their policies and procedures regarding discrimination or harassment based on an employee’s sexual orientation.