Expanding on her previous post on the subject, on May 1, 2019, Law360 published the following expert analysis authored by Squire Patton Boggs labor and employment attorney Melissa Legault.
After 11 private conferences during which the U.S. Supreme Court justices debated whether to hear the cases, the Supreme Court granted certiorari in three cases involving the extent of protection — if any — provided by Title VII of the Civil Rights Act of 1964 against employment-based discrimination on the basis of sexual orientation and gender identity. The court consolidated the two sexual orientation cases, Altitude Express v. Zarda and Bostock v. Clayton County, Georgia, and allocated a total of one hour for oral argument for both cases.
In the gender identity case, R.G. & G.R. Harris Funeral Homes Inc. v. U.S. Equal Employment Opportunity Commission et al., the court limited its consideration to the question of whether Title VII prohibits discrimination against transgender people based on (1) their status as transgender or (2) pursuant to the theory of sex stereotyping announced in Price Waterhouse v. Hopkins.
The current federal stance on Title VII and LGBT discrimination is conflicting, to say the least. The court’s rulings in these cases will provide employers with some much-needed clarity regarding whether federal law requires that their discrimination policies protect gay and transgender individuals.
Under Title VII, it is illegal for an employer to discriminate against an employee “because of … sex.” The statute does not on its face prohibit sexual orientation or gender identity discrimination, and circuit courts are split as to whether Title VII’s protection against sex-based discrimination also prohibits sexual orientation discrimination, with the Second and Seventh Circuits of the view that Title VII prohibits sexual orientation-based discrimination and the Eleventh and Fifth Circuits reaching the opposite conclusion.
In Zarda, a male skydiving instructor whose employment was allegedly terminated because of his sexual orientation filed a Title VII claim against his employer. The U.S. Court of Appeals for the Second Circuit held that the plaintiff was wrongfully terminated from his job, stating that, “because sexual orientation is a function of sex and sex is a protected characteristic under Title VII, it follows that sexual orientation is also protected.”
The Second Circuit’s decision was in line with the U.S. Court of Appeals for the Seventh Circuit’s 2007 holding in Hively v. Ivy Tech Community College where that court held that discrimination on the basis of sexual orientation violates Title VII. A few months after Zarda was decided, the U.S. Court of Appeals for the Eleventh Circuit reached a contrary conclusion in Bostock, relying on previous circuit precedent.
The last of the trio, Harris Funeral Homes, contemplates whether Title VII implicitly prohibits gender identity discrimination. In that case, the U.S. Court of Appeals for the Sixth Circuit became the first federal circuit court of appeals to recognize transgender discrimination as a form of prohibited sex-based discrimination under Title VII, relying heavily on the reasoning in Zarda.
In addition to the trio of cases currently before the court, other circuit courts have recently grappled with the issue of whether Title VII protects against LGBT discrimination. For instance, the issue of sexual orientation discrimination is currently before the U.S. Court of Appeals for the Eighth Circuit. The court heard oral argument on April 17, 2019, in Horton v. Midwest Geriatric Management LLC, a case brought by a man who was offered a job as vice president of sales and marketing, only to have the offer rescinded after the company discovered that he is gay.
Further, on April 19, 2019, the U.S. Court of Appeals for the Fifth Circuit deepened the circuit split in Bonnie O’Daniel v. Industrial Services Solutions et al. and held that Title VII does not prohibit employers from terminating the employment of straight workers because of their sexuality, reaffirming the circuit’s long-standing position that Title VII does not protect against sexual orientation discrimination. In that case, the plaintiff claimed that her employer terminated her employment because of her sexual orientation (heterosexual) after she made a transphobic comment on Facebook.
The Fifth Circuit rejected the plaintiff’s Title VII retaliation claim, holding that, based on the circuit’s “unbroken and unequivocal precedents, it is not ‘reasonable’ in the Fifth Circuit to infer that Title VII embraces an entirely new category of persons protected for their sexual orientation.” The court also dismissed the plaintiff’s claim that her former employer violated state law by suppressing her free expression on grounds that the law does not cover private employers.
This decision comes shortly after the same circuit’s decision in Wittmer v. Phillips 66 Company. In that discrimination case involving a transgender plaintiff, the Fifth Circuit ruled in favor of the employer without addressing the question of whether Title VII protects against LGBT discrimination; however, U.S. Circuit Judge James Ho, who was nominated by President Donald Trump, wrote a lengthy and detailed concurrence analyzing the issue and concluded that Title VII does not provide such protections.
In his concurrence, Judge Ho opined that “[o]nly the Supreme Court can resolve this circuit split.” With its decision to grant certiorari in this trio of cases, the Supreme Court has chosen to do just that. The court will hear arguments in these cases next term, meaning employers can expect to see a decision by June 2020. Until then, this issue will continue to be closely watched by the nation, with government agencies, Congress and employers weighing in on the debate.
Federal Agencies Muddied the Waters
The fall of 2018 brought a wave of federal agency activity regarding LGBT discrimination protection. For example, in October 2018, a U.S. Department of Health and Human Services memo garnered national attention for defining “sex” to exclude transgenderism.
The memo defines “sex” as “a person’s status as male or female based on immutable biological traits identifiable by or before birth.” In other words, HHS wants to rely on birth certificates as the main identifier of an individual’s sex, a policy that would essentially abolish federal recognition and protection of transgender individuals. The memo requests that other federal agencies — including the U.S. Department of Justice, U.S. Department of Education and U.S. Department of Labor — alter their own understanding of the word “sex” to match HHS’ proposed definition.
Shortly after the HHS memo became public, the DOJ, appearing before the Supreme Court on behalf of the federal government, urged the court in a brief to postpone consideration of Harris Funeral Homes until it decides whether to review Zarda and Bostock because the Sixth Circuit relied heavily on Zarda in concluding that Title VII prohibits transgender discrimination.
Further, the DOJ contended, consistent with the HHS memo, that Title VII does not prohibit employers from discriminating against employees based on gender identity. Not all agencies agree with HHS’ and the DOJ’s interpretation of Title VII. Specifically, in response to the other agencies’ proclamations on the topic, the acting chair of the EEOC, Victoria Lipnic (who was appointed by Trump in 2017), announced that the EEOC plans to continue prosecuting transgender discrimination claims in accordance with the agency’s stated policies.
The Legislative Branch Weighs In
On March 13, 2019, the House Democrats, spearheaded by Rep. David Cicilline, an openly gay congressman from Rhode Island, reintroduced a bill to expand LBGT discrimination protections. The Equality Act, first introduced in 2015, would change existing civil rights legislation to ban discrimination against LGBT individuals in employment, housing and public accommodations, among other areas.
Further, the proposed bill would bar reliance on the Religious Freedom Restoration Act as justification of sexual orientation and transgender discrimination. The act is currently being considered in various committee hearings and a floor vote is expected in the House by early summer 2019. Although the bill has a chance to pass in the House, which has a Democratic majority, it is unlikely that it would pass in the Republican-controlled Senate.
The American Public Shows Increasing Support of LGBT Rights
A recent poll from the Public Religion Research Institute, or PRRI, indicates that a majority of Americans in every religion, party and U.S. state supports policies that protect against gender identity and sexual orientation discrimination.
Further, nearly 200 companies — including Amazon, Apple, PepsiCo, Twitter and Uber — have decided to take the issue into their own hands and signed the Business Statement for Transgender Equality opposing “any administrative and legislative efforts to erase transgender protections through reinterpretation of existing laws and regulations.” Even without federal protections in place, corporate America has chosen to instill its own protections for employees, with over 80% of Fortune 500 companies prohibiting LGBT discrimination in their employment policies. Moreover, many of these companies have publicly supported the proposed Equality Act now before Congress.
On March 27, 2019, some of America’s most influential companies weighed in on this issue at the state level. In a letter, companies like Amazon, Google and IBM warned Texas legislators against a pair of bills that the companies deem discriminatory, explaining that they would “continue to oppose any unnecessary, discriminatory, and divisive measures that would damage Texas’ reputation” including “policies that explicitly or implicitly allow for the exclusion of LGBTQ people, or anyone else.”
Considering the court’s current makeup and recent decisions in other employment cases, it is uncertain how the nine justices will ultimately rule on whether Title VII prohibits sexual orientation and gender identity discrimination, but pundits largely believe that the conservative majority will take a narrow view in interpreting the extent of Title VII’s sex-based discrimination prohibitions. Until the court provides clarity on these questions, it is important for employers to remember that, although there are currently no express federal protections against sexual orientation or transgender discrimination, many state and local governments prohibit such discrimination.
In fact, over 20 states and Washington, D.C., have explicit laws prohibiting LGBT-related discrimination. Employers are encouraged to consult with counsel to ensure compliance with state and local laws regarding transgender and sexual orientation discrimination in the workplace. In addition, employers should continue to use best practices whenever making adverse hiring and employment decisions and should adequately document performance deficiencies or other legitimate concerns regarding applicants and employees, so they are able to establish an independent, nondiscriminatory reason for their employment decisions.
 Price Waterhouse v. Hopkins , 490 U.S. 228 (1989).