LANDMARK RULING—U.S. HOLDSBARS WORKPLACE DISCRMINATION BASED ON SEXUAL ORIENTATION OR GENDER IDENTITY

Posted: June 30, 2020 | News

In a landmark 6-3 ruling, the U.S. Supreme court held that Title VII of the 1964 Civil Rights Act, protects LGBTQ employees from workplace discrimination based on sexual orientation or gender identity. The majority held this type of discrimination falls under Title VII’s prohibition on discrimination based on “sex.”  The opinion was authored by Trump appointee Neil Gorsuch, with fellow conservative Chief Justice John Roberts joining the majority. 

This has been the law in California for a considerable time, so California employers will have no immediate policy changes to implement, yet California employers likely will experience the broader implications of the decision. The holding will immediately affect 26 other states that until now had no such law. Multi-state employers may need to revise their policies to implement prohibitions on discrimination and harassment on the basis of sexual orientation and gender identity.

The Court's clear holding that the language "because of sex" bars discrimination based on gender identity or sexual orientation, has broad implications that extend beyond employment law to numerous laws and regulations that use the same or similar language. Further, because of prior Title VII rulings concerning various matters such as defining and barring a “hostile workplace,” employers throughout the nation, including California, need to consider how these rules may apply to workplace speech concerning sexual orientation and gender identity.

Facts of the Cases

The Court's opinion in Bostock v. Clayton County considered appeals in three separate cases from different federal circuit courts that were consolidated for review.

• 1. Gerald Bostock worked for Clayton County, Ga., as a child welfare advocate. He was terminated when his employer learned he participated outside work in a gay softball league; he was fired for conduct ‘unbecoming” of a County employee after he joined a recreational gay softball league, after which certain influential members of the community criticized him.[1] 
• 2. Donald Zarda worked as a skydiving instructor at Altitude Express in Long Island, N.Y.. He was terminated days after mentioning he was gay; [2]and
• 3. Aimee Stephens worked at R. G. & G. R. Harris Funeral Homes in Garden City, MI. She presented as a male when she was hired, but was terminated six years later shortly after telling her employer she was going to "live and work full-time as a woman."[3]

All three sued under Title VII, which makes it unlawful to discriminate against an individual "because of such individual's . . . sex." 42 U.S.C. §2000e–2(a)(1) (emphasis added). In the Bostock case, the 11th Circuit held that Title VII does not prohibit employers from firing employees because of their sexual orientation, reasoning that “sex” does not mean “sexual orientation” or “gender identify.” By contrast, in the Zarda and Stephens cases, the 2nd and 6th Circuits held that Title VII does prohibit employers from firing employees because of their sexual orientation and transgender status. The Supreme Court considered all three appeals together to resolve the split among the circuit courts.

 The Court's Analysis

The majority opinion began by analyzing the key language in Title VII. While the parties disputed what definition to apply to the term "sex," the Court adopted the employers' narrower definition as "referring only to biological distinctions between male and female." From that premise, the Court considered Title VII's "because of" standard, concluding that it would violate Title VII if an employee's sex was even one of several "but-for causes" for an employer's decision.

From there, the Court concluded "An employer who fires an individual for being homosexual or transgender fires that person for traits or actions it would not have questioned in members of a different sex. Sex plays a necessary and undisguisable role in the decision, exactly what Title VII forbids."

To illustrate its reasoning, the Court offered the following example:

Consider, for example, an employer with two employees, both of whom are attracted to men. The two individuals are, to the employer's mind, materially identical in all respects, except that one is a man and the other a woman. If the employer fires the male employee for no reason other than the fact he is attracted to men, the employer discriminates against him for traits or actions, it tolerates in his female colleague. Put differently, the employer intentionally singles out an employee to fire based in part on the employee's sex, and the affected employee's sex is a but-for cause of his discharge.

With respect to transgender individuals, the Court offered the example of two otherwise identical employees who identify as female—one who was identified as a male at birth (and is transgender) and one who was identified as female at birth:

If the employer retains an otherwise identical employee who was identified as female at birth, the employer intentionally penalizes a person identified as male at birth for traits or actions that it tolerates in an employee identified as female at birth. Again, the individual employee's sex plays an unmistakable and impermissible role in the discharge decision.

The Court also cited three prior opinions where it had found Title VII violations when an employer (i) refused to hire women with young children but would hire men with young children;¹ (ii) required women to make larger pension fund contributions than men to account for women's longer average lifespans;² and (iii) a male plaintiff was singled out by his male co-workers for sexual harassment.³ This last case, Oncale, played a large role in the majority's holding, not only because it involved same-sex sexual harassment, but also for its holding that it did not matter "whether men as a group were subject to discrimination or whether something in addition to sex contributed to the discrimination."

From these cases, the majority opinion drew three key principles:

• 1. It is "irrelevant what an employer might call its discriminatory practice, how others might label it, or what else might motivate it."
• 2. A "plaintiff 's sex need not be the sole or primary cause of the employer's adverse action."
• 3. "An employer cannot escape liability by demonstrating that it treats males and females comparably as groups."

Additional Implications and Questions

While the full implications of this groundbreaking decision remain to be seen, a few observations can be made. 

On its face, the decision is about sex discrimination in the workplace. For employers in states that already had protections under state law against discrimination, based on gender identity or sexual orientation (such as California, Washington, Oregon, and New York), the decision may seem insignificant, as noted above. However, the Bostock reasoning will almost certainly lead to the expansion of protections against discrimination based on sexual orientation or gender identity in other forums and contexts, affecting all states and federal law.

For example, the Trump Administration has made clear its intention to exclude gender identity as a protected classification under the law by narrowing the definition of sex to include only biological sex as assigned at birth. Consistent with this intention, on June 12, 2020, the Office for Civil Rights (OCR) of the Department of Health and Human Services (HHS) issued a new final rule that dramatically revised the agency’s prior interpretation of Section 1557 of the Affordable Care Act (ACA), the law’s primary anti-discrimination provision. The final rule rewrites an Obama-era regulation that was issued in 2016 and has been the source of ongoing litigation; the new rule removes protections against discrimination based on sex stereotyping and gender identity afforded by the 2016 rule. The final rule is accompanied by a press release and fact sheet.

Under the final rule, the Affordable Care Act's prohibition against sex discrimination does not apply to individuals who are transgender. This new rule will probably be vulnerable to attack based upon the Bostock ruling. By the same token, likely to fall are regulations or orders limiting protections for transgender employees of federal government contractors. Will courts strike down orders rescinding the Obama-era guidance protecting students' rights to use the bathroom or locker room that corresponds to their gender identity? Will courts strike down orders banning transgender individuals from the military?[4]   The Bostock ruling’s broad language suggests challenges to such rules will be brought and may succeed.

The decision could also impact efforts in other areas where LGBTQ individuals have argued  they face discrimination, such as in education and housing and, for transgender individuals, participation in college sports. As Justice Alito noted by way of warning in his dissent: "Over 100 federal statutes prohibit discrimination because of sex." As the dissent warned, presumably all should be read to encompass sexual orientation and gender identity under Bostock.

Justice Gorsuch also noted three Title VII exceptions that arguably intersect with religious opposition to LGBTQ protections. Among them, the "ministerial exception" and the 1993 Religious Freedom Restoration Act. These exceptions, wrote Gorsuch, will "merit careful consideration" in later cases.

Another area where Bostock could have widespread implications is in the area of acceptable workplace speech. Title VII itself contains no mention of “hostile work environments” or “harassment.”  It merely prohibits discrimination “against any individual with respect to his compensation, terms, conditions or privileges of employment, because of such individual’s race, color, religion, sex, or national origin.”  But in 1986, the Supreme Court, in Meritor Savings Bank v. Vinson, unanimously affirmed the Fifth Circuit’s expansive concept of workplace protections that it had established in Rogers v. EEOC in 1972. In its Vinson decision, the Court held that a female plaintiff could establish a Title VII violation “by proving that discrimination based on sex has created a hostile or abusive work environment” so long as the harassment was, per Rogers and previous lower-court decisions, “sufficiently severe or pervasive to ‘alter the conditions of [the victim’s] employment and create an abusive working environment.’”

In the wake of Vinson, employers were liable for insensitive, offense, or hostile statements made by their employees. While the Court’s “sufficiently severe or pervasive” standard appeared to raise a  high bar to establishing liability for speech in the workplace, employers were incentivized to adopt zero-tolerance policies to protect themselves from liability. Commentators argued that zero-tolerance speech policies were the most effective way for employers to protect themselves from Title VII suits, particularly after the Civil Rights Act of 1991 expanded potential liability of employers.

In the wake of Bostock, with the inclusion of sexual orientation and gender identity among Title VII’s protected classes, it seems likely that courts will apply the “hostile work environment” standards of the Title VII case law to comments in the workplace that are hostile to sexual orientation and gender identity issues. How these rules will intersect religious speech is another question, which will await another case, as the majority noted.  Coworkers or even customers who, for example, defend their traditional views of sex and gender or offer personal religious beliefs regarding same-sex marriage or gender reassignment, could lead to such employer liability for creating a hostile work environment. Thus employers could become incentivized to proscribe all such discussions in the workplace.

Before Bostock, employees could be fired based on their sexual orientation or gender identity in 26 states. Now such firings are illegal under Title VII throughout the nation. How this landmark case will be applied beyond employment discrimination remains to be seen. The case is a reminder that the Supreme Court can still effect significant changes in society.

The attorneys at North & Nash, A Professional Law Corporation are available to assist employers in understanding their legal rights and duties in an ever-changing legal landscape. Contact us if we can be of service.

Author: Partners at North & Nash, A Professional Law Corporation