By Scott Rabe and Sam Schwartz-Fenwick

Seyfarth Synopsis: In landmark decision, the Second Circuit joins the Seventh Circuit in holding that Title VII prohibits discrimination on the basis of sexual orientation as a subset of sex discrimination.

In a landmark decision today in Zarda v. Altitude Express, Inc., No. 15-3775, the Second Circuit ruled en banc that Title VII prohibits discrimination on the basis of sexual orientation as a subset of discrimination on the basis of sex. The Second Circuit now joins the Seventh Circuit, the EEOC, and a number of district and administrative courts across the country that have interpreted Title VII to extend its prohibition of sex discrimination to sexual orientation.  Chief Judge Katzmann authored the decision for the plurality, in which four judges joined in full, five judges joined in part, and to which three judges dissented.  In total, eight of the thirteen judges issued an opinion.

The Appellant in Zarda, a former skydiving instructor, sued his employer, alleging that he was terminated from his job after he revealed to a customer that he was gay.  Specifically, he alleged sex discrimination under Title VII asserting that his employment was terminated because he failed to conform to male sex stereotypes because he was gay.  The district court dismissed Zarda’s Title VII claim at summary judgment, holding that, although there was sufficient evidence to permit his claim for sexual orientation discrimination to proceed under New York law, which explicitly prohibits discrimination on the basis of sexual orientation, plaintiff had failed to establish a prima facie case of gender stereotyping under Title VII based on his sexual orientation.  The district court explained that in reaching this decision it was constrained by Second Circuit precedent in Simonton v. Runyon and Dawson v. Bumble & Bumble, which held that Title VII did not prohibit discrimination on the basis of sexual orientation. Today the Second Circuit reversed, and in doing so, explicitly stated that it was overturning its prior opinions in Simonton and Dawson.

In the plurality opinion, Judge Katzmann explained that sexual orientation discrimination should be treated as a subset of sex discrimination for several reasons.  He observed that “sexual orientation is defined by one’s sex in relation to the sex of those to whom one is attracted,” that “sexual orientation discrimination is . . . based on assumptions or stereotypes about how members of a particular gender should be, including to whom they should be attracted,” and that “sexual orientation discrimination is associational discrimination because an adverse employment action that is motivated by the employer’s opposition to association between members of particular sexes discriminates against an employee on the basis of sex.”   The plurality also found compelling that, while the consensus among Circuits and the EEOC in 2000 at the time of Simonton was that Title VII did not protect against discrimination on the basis of sexual orientation, the EEOC and the Seventh Circuit both changed their stance on this issue and courts across the country continue to explore this issue.

The main dissent, written by Judge Lynch and joined in part by two justices, argued primarily that under a strict textual interpretation of Title VII, the statute did not protect against discrimination on the basis of sexual orientation, as it is clear Congress could have but did not include sexual orientation as a protected class.  This is the same rationale employed in 2017 by the Eleventh Circuit in Evans v. Georgia Regional Hospital, which recently held in a divided opinion that Title VII’s prohibition on sex discrimination does not encompass discrimination on the basis of sexual orientation.

Today’s decision widens the Circuit split on this issue.  Further, the diverse array of opinions among the judges on the Second Circuit mirrors the nationwide divergence in views regarding the protections that Title VII affords employees based on their sexual orientation.  While the EEOC has now taken the clear position that discrimination against workers because they are lesbian, gay or bisexual is sex discrimination under Title VII, the Department of Justice has issued guidance and sought to enforce an interpretation of Title VII that discrimination on the basis of sexual orientation is not prohibited under Title VII as sex discrimination.  Circuit, district, and administrative courts are also split.  With the Circuit divide, complicated by vastly divergent interpretations of Title VII by the very agencies entrusted to enforce Title VII, the issue is poised for a Supreme Court ruling.

In light of the current uncertainty regarding the ultimate interpretation of Title VII as it applies to sexual orientation, as well as gender identity, see our prior post, and because numerous state and local laws already explicitly prohibit discrimination on the basis of sexual orientation, employers should regularly review their policies to ensure that adequate protections are provided to employees on the basis of their sexual orientation or gender identity.

For more information on this topic, please contact the authors, your Seyfarth Attorney, or any member of Seyfarth Shaw’s Workplace Policies and Handbooks Team or the Labor & Employment Team.

By Scott Rabe, Sam Schwartz-Fenwick, and Marlin Duro

Seyfarth Synopsis: In the first case following the Department of Justice’s pronouncement that Title VII does not prohibit discrimination against transgender persons on the basis of gender identity, a court in the Western District of Oklahoma held that Title VII protects transgender individuals from discrimination. Tudor v. Se. Okla. State Univ., No. civ-15-324-C. (W.D. Okla. Oct. 26, 2017).

With the recent October 5, 2017 memorandum from the Department of Justice stating that Title VII does not prohibit discrimination against transgender persons, the legal landscape regarding Title VII’s protection of transgender individuals is very much in flux. The DOJ’s interpretation is a reversal of the DOJ’s interpretation under the Obama administration and also conflicts with the current interpretation of the EEOC, both of which interpret Title VII to prohibit discrimination on the basis of gender identity. U.S. Circuit courts are also split on the issue, meaning this issue is likely primed for resolution by the Supreme Court in the not too distant future.

The latest decision addressing this issue comes from Tudor v. Southeastern Oklahoma State University, a case from the Western District of Oklahoma in which Tudor, a transgender former professor at Southeastern Oklahoma State University, alleged among other things that she was harassed and discriminated against on the basis of her gender identity after she was denied tenure following her transition from male to female. The court in Tudor denied the university’s motion for summary judgment, finding that there were triable issues of fact with respect to each of Tudor’s claims. This decision is important because it shows that, despite the DOJ’s memorandum, courts are still willing to extend Title VII protections to transgender persons. It also provides helpful guidance to employers as they ponder how their own internal policies and procedures affect transgender employees.

Importantly, the court in Tudor rejected the University’s argument that Tudor was not entitled to protection under Title VII because “transgender” is not a protected class. The court, relying on its prior ruling on the issue, reiterated that Title VII’s prohibition of gender discrimination extended to transgender individuals to the extent they were discriminated against based on “gender non-conformity.” Specifically, Tudor had alleged that Defendant’s actions towards her occurred because she was female, yet Defendants regarded her as male.

The Court also denied the University’s motion for summary judgment on Tudor’s hostile work environment claim, finding that there was a triable issue of fact. In particular, the court highlighted Tudor’s evidence that for four years the University placed restrictions on what restroom she could use, how she could dress, what makeup she could wear, and that it used the wrong pronouns when referencing her. The Court found that these facts, if true, could be sufficient to establish a hostile work environment claim.

The Court also rejected the University’s Faragher/Ellerth defense, which can provide a complete defense to an employer that has non-discrimination and non-harassment policies in place but where an employee fails to take advantage of those procedures. Here, the court explained that the defense would not apply because the University’s sexual harassment and sex discrimination policies did not contain specific language regarding protections for transgender employees.

Even though the law in this area remains uncertain, there is much for employers to glean from the Tudor case. First, it is clear that the DOJ’s recent memorandum has not resolved the question of whether Title VII protects transgender employers on the basis of gender identity. Therefore, employers should be vigilant in establishing and maintaining non-discrimination and anti-harassment policies that extend protections to individuals on the basis of gender identity. This will help ensure that employers stay compliant with federal (and applicable state and local) laws, and it also preserves a potential Faragher/Ellerth defense to a hostile work environment claim. Employers should also be mindful of the unique conduct that may be considered harassing in nature to transgender employees. For example, Tudor demonstrates that denying employees access to their bathroom of choice, enacting strict gender normative dress codes, and refusing to use preferred pronouns may all contribute to a hostile work environment. Thus, employers should update their anti-harassment policies and trainings to include examples that address some of the unique scenarios affecting transgender employees.

As always, we invite employers to reach out to their Seyfarth contact for solutions and recommendations regarding anti-harassment and EEO policies and addressing compliance with LGBT issues in the law.

By Sam Schwartz-FenwickMichael W. Stevens, and Kylie Byron

Seyfarth Synopsis: The Department of Justice has reversed the previous Administration’s position on employment protections for transgender individuals, and issued a memorandum that will likely be relied on by private employers seeking to use their religious faith to engage in otherwise prohibited discriminatory conduct.

In a bombshell week, with significant implications for employers, the Department of Justice issued two memos setting forth its views on transgender discrimination claims and an employer’s ability to make decisions based on its religious beliefs.

On October 5th, 2017, the Department of Justice released a memorandum stating that the new position of the DOJ would be that Title VII does not protect transgender persons from discrimination in the workplace. However, somewhat confusingly, the memo specified that transgender people were still protected under Title VII’s existing formulation. This presumably means that a transgender person may sue under Title VII if their employer discriminates against them on the basis of their race or country of origin, but not on the basis of sex or gender identity. The DOJ had previously argued in Court that Title VII does not extend to claims of sexual orientation discrimination.

On October 6th, 2017, the Department issued new guidance providing that “[e]xcept in the narrowest of circumstances, no one should be forced to choose between living out his or her faith and complying with the law.” The directive explicitly states that private companies must be given the same leeway regarding religious beliefs that churches receive. This guidance may impact hiring, and could possibly give any private organization the ability to hire, fire, and discipline employees based upon the faith of the owner or supervisor. It may also lead to changes in benefit plans that expressly exclude on religious grounds transgender coverage and/or same-sex spousal benefit.

These directives were not unexpected. Nonetheless, they mark a sharp reversal of DOJ policy. Under the Obama Administration, the DOJ had held the position that transgender employees were protected from discrimination under Title VII, congruent with the EEOC’s position. Specifically, the Department’s position was that gender identity discrimination was a form of sex stereotyping and thus covered by under Title VII. The DOJ intervened in litigation throughout the country advocating this view of the statute. Likewise, the prior administration argued in Hobby Lobby v Burwell, that private companies cannot claim exemption on religious grounds from generally applicable statutes.

In addition, the DOJ’s new course puts it at odds with the EEOC. The EEOC continues to advocate for a broad interpretation of Title VII that extends to claims of sexual orientation and gender identity discrimination.   Further it remains the EEOC’s position that a business cannot defend otherwise discriminatory conduct by arguing such conduct was consistent with its religious beliefs.

The memos underscore that this is an area of law filled with uncertainty. The law on the scope of Title VII’s coverage, and the ability of religion to act as an affirmative defense to otherwise discriminatory conduct, remain unsettled. The memos do not resolve the issue. The Department of Justice has stated its viewpoint and direction, but these directives do not supersede state or federal law already in place. Further, these memos do not control the position of the EEOC.

It is anticipated that these memos will lead to an increase in targeted employment lawsuits from impact groups. How such cases will turn out is unknown.

What is known is that these issues will remain in flux until either the Supreme Court hears the issue or Congress passes clarifying legislation. This term, the Supreme Court in Masterpiece Cakeshop will be given the opportunity to provide some insight into how it views the tension between religious rights and principles of non-discrimination. The case involves whether or not a business (here a bakery) is permitted to refuse service to same-sex couples on the basis of the business-owner’s faith. The baker asserts a First Amendment rights to religious liberty and freedom of speech. A ruling in favor of the baker would be consistent with the DOJ’s October 6 memo, and could dramatically change the employment law landscape. As with the DOJ memo, such a ruling could be relied on by employers and plan sponsors to justify otherwise discriminatory actions in hiring, promotion, firing and plan design.

As the policy change by the DOJ is not binding, it is not advisable to shift employment policies based upon the Attorney General’s statements. Treating transgender employees with equality in the workplace is a best practice standard that increases employee safety and productivity and helps with recruitment, retention and morale. Further, inclusive policies mitigate against the risk of potential litigation. In addition, several states and cities have protective statutes that prohibit discrimination against transgender people in employment, and federal courts in multiple jurisdictions have found transgender claims covered by Title VII.

For more information on this topic, or for advice or assistance in helping your workplace comply with best practices for transgender employees, please contact the authors, your Seyfarth Attorney, or any member of Seyfarth Shaw’s Workplace Policies and Handbooks Team.

By Sam Schwartz-Fenwick, Michael W. Stevens, and Kylie Byron

Seyfarth Synopsis: The first eight months of the new administration signals a retrenchment on the executive branch’s view of legal protections due LGBT individuals, including in employment.

Recently, in a dramatic shift, the Department of Justice broke ranks with the Equal Employment Opportunity Commission, and filed an amicus brief in the Second Circuit in Zarda v. Altitude Express, Inc., No 15-3775, Dkt. #417 (S.D.N.Y. July 26, 2017).  In that brief, the Department argued that, contrary to its prior position (and that of the E.E.O.C.), discrimination on the basis of sexual orientation was not prohibited under Title VII as harassment on the basis of gender. The E.E.O.C.’s longstanding position is that such discrimination is prohibited, a position that recently found support in the Seventh Circuit in Hively v. Ivy Tech, No. 15-720 (7th Cir. Apr. 4, 2017) (en banc).

There is currently a circuit split on this issue, with the Seventh Circuit finding that sexual orientation discrimination is prohibited by Title VII, and the Eleventh Circuit finding that it is not. The sudden reversal of the Department of Justice, injects further uncertainty in the already unsettled landscape of LGBT protections under Title VII.  Employers can expect this uncertainty to continue until the issue is addressed by either Congress or by the Supreme Court. Employers seeking to navigate this in flux legal landscape should work closely with counsel.

In another shift on LGBT issues, in March 2017, the Administration revoked Executive Order 13673, or the “Fair Pay and Safe Workplaces Order.”  Order 13673 required federal government contractors and prospective contractors to show compliance with Order 13672, an order that barred federal contractors from discriminating in employment on the bases of sexual orientation or gender identity. By revoking Order 13673, the  Administration has limited the impact of Order 13672.  While the nondiscrimination Order remains in place, the Order that would hold contractors accountable has been revoked.  Revocation of Order 13673 has created uncertainty among federal contractors as to their responsibilities, and as to appropriate best practices. To remain compliant with Order 13672, employers should work closely with counsel.

In addition, the Administration has revoked the Department of Education issued guidance regarding transgender students. The DOE under the Obama administration stated that transgender students were protected under Title IX on the basis of gender identity.  Thus, schools that did not permit transgender students to use the necessary hygienic facilities (such as bathrooms) appropriate to their gender were in violation of Title IX’s nondiscrimination provisions and risked losing federal funds.

In February 2017, the Trump Administration rescinded that guidance finding it did not “contain extensive legal analysis or explain how the position is consistent with the express language of Title IX.” Absent legal mandates to the contrary, schools can continue to offer protections to their transgender students consistent with their beliefs as to what is in the best interest of students.  Schools that seek to limit bathroom access to the sex-at-birth assigned to their students will need to grapple with how they can enact and implement such a rule while still complying with the present DOE guidance which provides that LGBT students must be assured that they “are able to learn and thrive in a safe environment” and cannot be subjected to discrimination.

The Administration’s view that Title IX does not protect transgender individuals has also led it to consider making changes to Section 1557 of the Affordable Care Act, Section, the regulations containing anti-discrimination protections in the provision of healthcare. Section 1557 bars covered entities from discriminating, including barring coverage based on a transgender exclusion in a plan. Last year, a court in the Northern District of Texas placed a nationwide preliminary injunction on enforcement of the transgender related Section 1557 regulations in a suit against HHS. The current administration chose not to appeal the decision. The Department of Justice further asked the court for a remand to HSS, so that HHS could determine whether or not the regulations comported with Title IX. The court granted this remand, and HHS is currently reportedly planning a new proposed rule for that purpose.

On August 4, 2017, the Justice Department announced that it was reviewing a draft proposed rule already prepared by HHS. It is likely that the proposed rule will unwind the transgender protections of Section 1557, in whole or provide exemptions to the regulations. Healthcare providers, employers, human resources departments and benefits administrators should work closely with counsel on this rapidly changing area of the law.

In further recent action, on July 26, 2017 President Trump tweeted that he would bar transgender persons from service in the military, and thus discharge all transgender service members. While a tweet does not appear to create legal policy, the tweet, and subsequent tweets on the subject, sent strong signals regarding his intention. On August 9, 2017, two lawsuits were filed alleging that although the ban has not yet been enacted, the policy announcement itself caused harm to service members. While this policy change does not directly impact private employers it underscores the need to keep abreast of change in the law that relate to gender-identity based protections, and to consult with counsel to evaluate internal policies, practices, and procedures with an eye toward gender identity claims.

Finally, in understanding the impact of the new administration on LGBT issues, it is instructive to examine the President’s judicial appointments, especially his appointment of Neil Gorsuch to the Supreme Court. While numerous publications, including ours, have been written on Justice Gorsuch’s outlook towards LGBT individuals, his dissent in Pavan v. Smith is instructive as to his leaning in future LGBT-related cases. In Pavan, the Court held that the same-sex parents of children in the state of Arkansas may not be prohibited from being listed as legal parents on their child’s birth certificate.  The Court held, per curiam, that because Arkansas already listed non-biological parents on birth certificates for non-same-sex couples, the state could not deny the same treatment to same-sex couples.

Justice Gorsuch, along with Justices Alito and Thomas, dissented in part arguing that “essentialist” biological or anatomical rationales should be the primary determining factor of parenthood, rather than adoption and other legal same-sex parenting methods. He further called into question the reach of Obergefell v. Hodges.  Judge Gorsuch’s views on LGBT issues will receive attention next year when the Court addresses whether a business can refuse to provide service to a gay couple.  This decision has wide ranging implications for employers and plan administrators, as it is expected to touch on the extent to which religious liberty can trump discrimination claims.

As the current administration continues to unwind regulations and legal arguments put forth by the Obama Administration, the legal landscape regarding LGBT employment issues will continue to remain in flux. Stay tuned to this blog for further analysis of subsequent developments.

For more information on this topic, please contact the authors, your Seyfarth Attorney, or any member of Seyfarth Shaw’s Workplace Policies and Handbooks Team.

By Sam Schwartz-Fenwick and Lucas Deloach

Seyfarth Synopsis: Increasingly, courts have held that discrimination on the basis of sexual orientation and gender identity violates Title VII. Federal district courts in Nevada and Pennsylvania have recently joined their ranks.  Nonetheless, the issue remains unsettled.

In the previous two months, federal courts in Nevada and Pennsylvania held that Title VII’s prohibition on sex discrimination includes discrimination based on gender identity and sexual orientation, respectively. These rulings accompany the Seventh Circuit’s recent decision to vacate its panel ruling that Title VII did not extend to claims of sexual orientation discrimination and to re-hear the case en banc.

In Roberts v. Clark County School District, a transgender police officer brought suit in the District of Nevada after the Clark County School District prohibited him from using either the men’s or women’s restrooms.  The school district argued in its motion for partial summary judgment that Title VII only prohibits discrimination based on “biological sex.”  In an October 4, 2016 ruling, the court disagreed and “join[ed] the weight of the authority” concluding that discrimination based upon an individual’s transgender status violated Title VII.  It further concluded that the plaintiff was entitled to summary judgment on his discrimination claim, as he was “clearly treated differently than persons of both his biological sex and the gender he identifies as ­­- in sum, because of his transgender status.”

In EEOC v. Scott Medical Health Center, P.C., the Equal Employment Opportunity Commission (EEOC) sued a pain management and weight loss clinic and alleged that a gay male employee was constructively discharged after a manager created a sexually hostile work environment.  The complaint recited a number of the manager’s alleged homophobic slurs and statements. The defendant moved to dismiss the complaint on the grounds that Title VII does not protect discrimination on the basis of sexual orientation.  The court denied the defendant’s motion exactly one month after the Roberts decision.  The court remarked that “the singular question” is “whether, but for [the employee’s] sex, would he have been subjected to this discrimination or harassment.”  The court thought not and held that Title VII’s “because of sex” provision prohibits discrimination on the basis of sexual orientation.

Of course, these decisions are not the final word. As President-elect Trump assembles his administration, it is not yet clear whether the executive branch and its agencies will depart from the position that the protections of Title VII extend to LGBT statuses.  Additionally, the U.S. Supreme Court has agreed to hear an appeal which asks the Court to weigh in on the issue of restroom access for transgender students.  While the appeal directly implicates Title IX, the ruling could also impact courts’ interpretations of prohibitions on sex discrimination under Title VII.

Given this uncertainty and the patchwork of court decisions across the country, employers should consult with counsel to review their policies, practices, and procedures as they relate to sexual orientation and gender identity claims.

For more information on this or any related topic please contact the authors, your Seyfarth attorney, or any member of the Labor & Employment or Workplace Policies and Handbooks Team.

 

 

 

By Sam Schwartz-Fenwick and Kylie Byron

Seyfarth Synopsis: In State of Texas v. United States, a District Court issued a nationwide injunction to enjoin the Department of Education and Department of Justice from enforcing their guidelines on accommodations for transgender students.  The injunction does not prevent states from permitting accommodations.

In a setback for the Obama Administration, and supporters of transgender inclusion, a U.S. District Court for the Northern District of Texas issued a preliminary injunction as to enforcement of the federal government’s Title IX guidance on transgender bathroom policies in schools. Under the departmental guidance, schools to comply with Title IX’s prohibition on sex-discrimination were required to permit transgender students to use bathrooms consistent with their gender identity, regardless of their sex assigned at birth.

The Court found the departments prematurely issued the guidance, as before issuance they did not comply with the notice and comment period required by the APA for “final agency action.” The Court found these steps necessary as it determined the guidance necessitates added regulatory compliance such as reconstruction of existing restrooms. The Court further disagreed with the administration’s position that “sex” in Title IX extends to gender identity, finding that “sex” under Title IX is not “fungible” and does not encompass the claims of transgender persons.  The Court declined to follow the Fourth Circuit’s affirmation of the departmental guidance in G.G. v. Gloucester County School Board, holding the Fourth Circuit wrongly found the definition of “sex” capable of encompassing transgender claims, and further noting the Supreme Court indicated its intent to overturn G.G. by issuing a stay.

The Court rejected the notion that non-inclusive bathroom policies gravely endanger transgender students. It instead found that in light of the Supreme Court stay in G.G., no irreparable harm would arise to students if federal guidance were enjoined.

The injunction is nationwide in scope, though it does not apply to states or cities that have already passed laws that require transgender-inclusive restrooms outside of the context of Title IX. In addition, no portion of the injunction holds that transgender-inclusive restrooms violate Title IX or are themselves illegal. In short, even if the district court decision is upheld, a school may still lawfully choose to implement an inclusive restroom policy; however, the federal government may not require a school to do so.

That said there is an active question as to whether the district court’s ruling will apply in the Fourth Circuit, given that the Court of Appeals ruled in in G.G. that Auer deference, and federal guidance on transgender inclusion, are appropriate.  It is also of course uncertain whether the injunction itself will be upheld on appeal.  If the Fifth Circuit affirms the injunction, there will be a circuit split with the Fourth Circuit thus making review by Supreme Court likely.  The Supreme Court has not yet decided whether it will review the Fourth Circuit’s injunction in G.G., and if the Supreme Court does not do so, or does not overturn G.G, the Fourth Circuit will be required to follow federal guidance on Title IX.

The injunction in State of Texas predicts a period of significant uncertainty in the law regarding gender identity protection under Titles VII and IX , beginning with contradictory rulings in various district courts, potential circuit splits, and culminating with the need for legislative or Supreme Court action.  Schools and employers should consult with counsel to evaluate their internal policies, practices and procedures with an eye towards potential discrimination claims.

If you have questions regarding this topic, please contact the authors or your Seyfarth attorney.

 

By Sam Schwartz-Fenwick and Kylie Byron

Seyfarth Synopsis: The Seventh Circuit has ruled that Title VII does not provide protection from discrimination on the basis of sexual orientation. However, the reasoning behind the Court’s ruling seems calculated to bring the question before the Seventh Circuit on en banc review or before the Supreme Court itself.

In a defeat for proponents of an expansive interpretation of Title VII, the Seventh Circuit in Kimberly Hively v. Ivy Tech Community College, affirmed the district court’s ruling that Title VII does not provide protection from discrimination on the basis of sexual orientation. However, language in the opinion suggests that the staying power of this ruling might be short-lived.

While noting Circuit precedent such as Hamner v. St. Vincent Hosp. & Health Care Ctr., Inc., 224 F.3d 701, (7th Cir. 2000) finding that Title VII does not extend to claims of sexual orientation discrimination, the Court focused the bulk of its 42 page decision on whether this precedent can stand now that the EEOC has taken the position that sexual orientation discrimination is per se sex discrimination under Title VII.

The Court appeared friendly to the reasoning of the EEOC. It noted that the line between sexual orientation discrimination and impermissible gender stereotyping is difficult to define, when it exists, and that separating sexual orientation claims from sex and gender stereotyping claims has the “illogical” result of protecting heterosexual individuals who make gender stereotyping claims but not gay, bisexual or lesbian individuals who make the same claims.  The court also noted that there is “no rational reason” for protecting LGB employees from gender stereotyping claims only if that employee acts “stereotypically gay” enough that their behavior can be seen as flagrantly defiant of gender norms.

The Court then noted that, despite the difficulty in separating sex stereotyping claims from sexual orientation claims, some discrimination claims are themselves discrimination on the basis of sexual orientation rather than on the basis of sex discrimination, such as stereotypes about lifestyle. As such, the Court stated that not all sexual orientation claims are sex stereotyping claims, and thus despite the “unsatisfactory” results and disagreements in district courts, Title VII could not be extended to cover sexual orientation absent further clarification from the Supreme Court.

The Circuit’s ruling in Hively is yet another indicator – as noted by the Court of Appeals itself, and by our previous blogs – that a unified prohibition on sexual orientation discrimination will almost certainly have to come from the Supreme Court or through legislative action such as the Equality Act.  With the Court’s order of a stay of the Title IX case G.G. v. Gloucester Cty. Sch. Bd. (a case involving the scope of the definition of “sex” under Title IX), the Court may be indicating that it considers the matter ripe for adjudication

The Seventh Circuit’s ruling in Hively predicts a period of significant uncertainty in the law regarding sexual orientation protections in employment, beginning with contradictory rulings in various district courts, potential circuit splits, and culminating with the need for legislative or Supreme Court action.  Employers should consult with counsel to evaluate their internal policies, practices and procedures with an eye towards sexual orientation claims.

If you have questions regarding this topic, please contact the authors or your Seyfarth attorney.

By Kylie Byron, Abigail Cahak, Mary Kay Klimesh, and Sam Schwartz-Fenwick

Seyfarth Synopsis: The Fourth Circuit in a case of first impression held that Title IX entitles transgender students to use the bathroom that matches their gender identity. Though that ruling only discusses Title IX, the Court’s language and reasoning may have implications for Title VII jurisprudence.

The Fourth Circuit has become the first Federal Circuit to weigh in on bathroom access for transgender students. In G.G. v. Gloucester County School Board, Case No. 15-2056 the court deferred to the U.S. Department of Education’s guidance that Title IX, which permits segregation of toilet, locker room, and shower facilities on the basis of “sex,” prohibits restriction of restrooms on the basis of “gender identity” as well as assigned sex. This ruling not only places the Circuit at odds with state “bathroom bills”, but also has potential implications for the Circuit’s interpretation of Title VII.

In G.G., plaintiff, a transgender boy, was prevented from using the men’s restroom at his high school due to a policy enacted by the school board specifically in response to his gender transition. G.G. sued for gender discrimination under Title IX and the Equal Protection Clause and requested a preliminary injunction allowing him to use the bathroom aligning with his gender identity.  The District Court for the Eastern District of Virginia dismissed G.G.’s Title IX claim holding that Title IX prohibits discrimination on the basis of sex and not on the basis of other concepts such as gender, gender identity, or sexual orientation.

The Fourth Circuit reversed the District Court’s dismissal of G.G.’s Title IX claim. The Court held that Auer deference required the Court to defer to the Department of Education’s interpretation of Title IX regulations, which indicated that transgender students could use hygienic facilities (such as restrooms) consistent with their gender identity regardless of the sex assigned at birth. The Court further found the Department of Education’s position regarding access to restrooms for transgender individuals consistent with the position of other federal agencies, including the Equal Employment Opportunity Commission.

G.G. is an important decision for employers. While the lawsuit arose under Title IX not Title VII, the reasoning of the Court readily applies to Title VII given the similar verbiage of the statutes and the regular practice of courts to look to case law under both statutes.  It is expected that Title VII litigants going forward will increasingly cite G.G, to bolster their argument that courts should defer to the EEOC’s position that Title VII’s prohibition on sex-discrimination encompasses gender identity. Indeed, as we have blogged previously, a case, ACLU v. McCrory, has already been filed challenging North Carolina’s “bathroom bill”, alleging harm under Titles IX and VII and under the Equal Protection Clause of the Constitution.

While the reasoning of G.G. is unlikely to be universally adopted by courts analyzing gender identity claims under Title VII or Title IX, the decision adds voice to the growing chorus of support for the argument that claims of gender identity discrimination are actionable under current Federal law. Employers should consult with counsel to evaluate their internal policies, practices and procedures with an eye toward gender identity claims.

By Sam Schwartz-Fenwick and Kylie Byron

Seyfarth Synopsis: The passage of “Bathroom” or “Religious Freedom” bills raises issues for employers operating in impacted states. Employers in these states may wish to consider taking proactive and affirmative steps in the wake of these laws.

The belief of many pundits that the issue of LGBT rights was settled following the Supreme Court’s June, 2015 same-sex marriage ruling, has proved false. Indeed, in the nine months since the Supreme Court’s ruling nearly 200 bills have been introduced in state legislatures that limit LGBT rights.  Recently, two of these bills have been signed into law, one in North Carolina and one in Mississippi.  These bills have far reaching implications for employers, both in these states and nationwide, as more states look to enact copycat bills.

In a special one-day session on March 23, 2016, the North Carolina legislature proposed, drafted, passed, and enacted the Public Facilities Privacy and Security Act. The Act directly restricts restroom and locker room usage in public facilities to individuals based on the sex listed on that individual’s birth certificate.  In addition, the Act provides that no city or municipality in North Carolina may enact any ordinance or regulation that would prohibit discrimination in employment or public accommodation on the basis of sexual orientation or gender identity.  The Act further expressly repeals all local anti-discrimination ordinances that extended protection on the basis of gender identity or sexual orientation.  The Act thus invalidated Charlotte’s discrimination ordinance, an ordinance which previously covered places of public accommodation rather than employment generally.  The ACLU has already filed a suit challenging North Carolina’s statute, including a Title IX employment claim against the University of North Carolina.  The Attorney General of North Carolina has stated he will not defend the Act as he considers it unconstitutional.

On April 4, 2016, the state of Mississippi enacted an even more restrictive law, titled the “Protecting Freedom of Conscience from Government Discrimination Act.”  The Mississippi Act states that it seeks to protect the “religious beliefs” that same-sex marriage is impermissible and that gender is immutable and determined at birth.  To effectuate this goal, the Mississippi Act protects employment decisions whose effect is to discriminate against LGBT individuals.  In addition, the Act provides a cause of action to any person against any “third party” that attempts to enforce a rule of the state, or any division thereof, that would grant protection on the basis of sexual orientation or gender identity.

Importantly, prior to these bills being passed, neither Mississippi nor North Carolina extended anti-discrimination protections to LGBT individuals. Indeed, it remains the case that state anti-discrimination laws cover LGBT individuals in only 20 states and the District of Columbia. Nevertheless, the decision to expressly exclude LGBT individuals from the law is sure to encourage and even incentivize discrimination against members of the LGBT community.

In addition, the express state attempts to limit the protections of the LGBT community, are in sharp contrast to the efforts by the federal government to interpret existing anti-discrimination laws as extending protections on the basis of gender identity and sexual orientation. Indeed, in previous blogs we have detailed the positions of the EEOC and the Department of Education that respectively Titles VII and IX, prohibit discrimination on the basis of both gender identity and sexual orientation.  In addition, OSHA has issued employer guidelines providing that employers are to provide restroom accommodations based upon gender identity.  Similarly, the Department of Health and Human Services is drafting forthcoming regulations under the Affordable Care Act barring transgender discrimination in healthcare plans by entities that receive federal funds.

Stay tuned to this blog, as we will be actively monitoring further developments in this evolving legal field. In the meantime, given the growing divide between federal and state interpretations of law, employers may specifically wish to consider revising internal equal employment, non-discrimination and anti-harassment policies to include sexual orientation as protected categories, incorporating the topic of sexual orientation into EEO and harassment training programs.  For help evaluating your benefit policies and practices, please reach out to one of the authors of this post, or another Seyfarth attorney.

 

 

 

By Sam Schwartz Fenwick

In the months since the EEOC’s landmark ruling in Baldwin v Foxx (which we blogged about here), the looming question has been: Would federal courts adopt the Commission’s position that claims of sexual orientation discrimination were cognizable under Title VII? While there is not yet a definitive answer to that question, a recent decision from the Central District of California addressing sexual orientation under Title IX suggests that there is at least a modicum of judicial support for the reasoning of Baldwin.

In Videckis v Pepperdine University, Case No. 15-00298 (C.D. Cal. Dec. 14, 2015), the Court rejected a motion to dismiss brought by the University. The University argued Plaintiffs (two lesbian students) could not bring a cognizable claim of discrimination and retaliation under Title IX. The University reasoned Title IX’s prohibition of sex discrimination did not extend to claims of sexual orientation discrimination. The Court rejected this argument, relying heavily on the reasoning of Baldwin. The Court found discrimination based on sexual orientation was sex discrimination and thus covered under Title IX.  The Court’s inquiry focused on decisions previously issued under both Title VII and Title IX. The Court acknowledged that many other courts have held that sexual orientation is not covered under federal law, but the Court squarely rejected these holdings. It found any attempt to distinguish claims of sex from those of sexual orientation is “illusory and artificial” given that both types of claims rest on impermissible gender stereotypes (i.e. failure to conform with societal expectations of what it means to be a man or a woman). The Court explained “to allege discrimination on the basis of sexuality is to state a Title IX claim on the basis of sex or gender.” The Court further noted in dicta that claims of sexual orientation were covered under Title VII.

Videckis is an important decision for employers. While the lawsuit arose under Title IX not Title VII, the reasoning of the Court readily applies to Title VII given the similar verbiage of the statues and the regular practice of courts to look to case law under both statutes.  By giving credence to the expansive reasoning of the EEOC in Baldwin, Videckis adds voice to the growing chorus of support for the argument that claims of sexual orientation discrimination are actionable under current Federal law. That being said whether other courts will follow the lead of Videckis and/or extend its holding to claims under Title VII, is far from certain. Indeed, it is likely that courts will continue to reach divergent conclusions on whether the term “sex” appropriately covers claims of sexual orientation. Nevertheless, that at least some courts are beginning to consider these claim to be viable underscores the need for employers to prepare for a change in the legal landscape on this issue.

Along those lines, employers should increase their awareness of and sensitivity to issues related to sexual orientation in the workplace. Employers must be aware that  individuals may be protected under federal law in addition to relevant state or local laws, and that any allegations concerning sexual orientation discrimination require the same analysis, investigation and response as a traditional sex discrimination complaint. Finally, employers must evaluate their internal policies, practices and procedures with an eye toward sexual orientation issues to avoid potential complaints and liability.