Blog: The California Workplace Advisor

It has been a busy few weeks in the federal courts regarding the development of gay and transgender employment discrimination law. On March 7, 2018, the Sixth Circuit held that Title VII’s prohibitions on sex discrimination include discrimination based upon transgender status, and further dismissed the notion that otherwise illegal discrimination can be summarily exempted from federal law when motivated by an employer’s religious beliefs.  Two weeks prior, on February 26, 2018, the Second Circuit similarly held that Title VII’s prohibitions on sex discrimination extend to sexual orientation.  Following the April 2017 decision of the Seventh Circuit in Hively v. Ivy-Tech Community College of Indiana (which also recognized Title VII’s protections as extending to sexual orientation in a professor’s denial-of-tenure case), we appear to be at a jurisprudential tipping point regarding gay and transgender employment discrimination protections.

Brief Background

Title VII of the Civil Rights Act of 1964 (“Title VII”) bars discrimination based upon “sex”.  There is no express definition in the statute of whether “sex” applies to sexual orientation or transgender status, and likewise there is no United States Supreme Court precedent that speaks to whether Title VII bars employment discrimination based upon these categories.  Since the 1990s, Congress has periodically considered new legislation barring employment discrimination on the basis of sexual orientation (but not transgender status) under the proposed Employment Non-Discrimination Act (“ENDA”), but the bill has never been brought up for a vote.  Under the Obama Administration, the Equal Employment Opportunity Commission (“EEOC”) attempted to fill this void, and continues to prosecute cases under the theory that discrimination on the basis of sexual orientation and transgender status necessarily involves sex discrimination based on non-conformance with gender norms and stereotypes; accordingly, it argues these forms of discrimination are covered under Title VII’s prohibition of discrimination based upon “sex”.

The Sixth Circuit Holds that Title VII’s Protections Extend to Transgender Persons

In EEOC v. R.G. & G.R. Harris Funeral Homes Inc., the Sixth Circuit considered the case of Aimee Stephens, a transgender female who began her employment at a funeral home as a gender-conforming man.  She later informed her employer of her intent to transition to a transgender woman and was fired for that reason.  The EEOC filed suit on her behalf under Title VII.  In its defense, the funeral home made a two-pronged argument: one, being transgender is not protected under Title VII, and two, even if being transgender was a protected status, the 1993 Religious Freedom Restoration Act (“RFRA”) would provide a complete defense because accommodating the transgender employee would create a “substantial burden” for the employer.  The Court noted that to accept the funeral home’s claim of “substantial burden” at face value (as the funeral home said it must) would “substitute religious belief for legal analysis regarding the operation of federal law.”  (This is a critical point because after Hobby Lobby’s success in Burwell v. Hobby Lobby Stores, Inc. in using the RFRA to avoid providing contraceptive care under the Affordable Care Act, it has been widely thought that the RFRA could be used as a sword by employers, i.e., applying a corporation’s religious beliefs to engage in otherwise unlawful conduct, including employment discrimination).  In the same breath, the Court held that the funeral home’s argument that the EEOC needed to engage in an arduous analysis of “compelling need” to enforce Title VII was without merit. Specifically, the Court explained that the federal government has a compelling interest in preventing and remedying unlawful employment discrimination, and that a complex, fact-intensive case-by-case analysis is not necessary to pursue this objective.  Although this may not be the last word on use of the RFRA as a complete defense to otherwise actionable employment discrimination, it seems logical that other Circuit Courts will follow the thoughtful and comprehensive analysis laid out by the Sixth Circuit.

Funeral Homes Is Not an Outlier, But Signals a Clear Trend

The decision in Funeral Homes is not an outlier.  Little more than two weeks ago, in Zarda v. Altitude Express, the Second Circuit reconsidered its own precedent and held that sexual orientation discrimination against a gay skydiving instructor is discrimination based upon “sex” and is covered under Title VII.  And just under a year ago, In Hively v. Ivy Tech Community College of Indiana (where a gay college professor claimed that she had been denied tenure on the basis of her sexual orientation), the Seventh Circuit, sitting en banc, also abandoned prior decisions and became the first federal appellate court to hold that sexual orientation discrimination is prohibited under Title VII.  In reaching its decision, the Seventh Circuit thoroughly analyzed how “sex” discrimination has evolved over the years, including the groundbreaking 1989 Supreme Court decision in Price Waterhouse v. Hopkins (holding that discrimination based upon sexual stereotypes, including manners of dress and speech, is discrimination based upon sex) and in the 1997 Supreme Court decision in Oncale v. Sundowner Offshore Services, Inc. (enunciating the claim of “hostile work environment” which, like sexual orientation discrimination, is not written expressly in Title VII, and also held that sexual harassment under Title VII is not restricted to instances where the alleged harasser is of a different gender than the victim, but extends to instances where the harasser and victim have the same gender).  Of course, the recognition of a trend is not the same as complete unanimity.  In March 2017, the Eleventh Circuit held in Evans v. Georgia Regional Hospital (without engaging in any new analysis) that it was bound by its prior precedent to conclude that sexual orientation is not included in Title VII’s protections.  Further, other Circuits have no precedent on this issue at all; the Ninth Circuit is among these courts, due in part to the fact that several states within the Ninth Circuit, including California, have long expressly barred employment discrimination against gay and transgender persons under state law.

Notably, these changes are occurring despite the efforts of the Trump Administration to change course, such as the internal memorandum that Attorney General Jeff Sessions disseminated in the Department of Justice that sexual orientation and transgender status were not protected under Title VII. This argument seems out of step with the current judicial momentum, and it may be that the path set in motion during the Obama administration will not be halted despite the best efforts of the current administration.

Conclusion

Despite a compelling shift toward recognition that Title VII’s protections extend to gay and transgender persons, there is still a split among those circuits that have weighed in. It seems likely that this fundamental issue of federal civil rights law will be reviewed by the Supreme Court over the next few years, giving even more importance to the composition of the Court under the current President.

—Glen Kraemer
—Monte Grix