Title VII Prohibits Discrimination Based on Sexual Orientation, Says Seventh Circuit

Discrimination on the basis of one’s sexual orientation is a form of unlawful sex discrimination under Title VII, according to an April 4, 2017 ruling by the Seventh Circuit Court of Appeals (which covers Indiana, Illinois and Wisconsin employers) (Kimberly Hively v. Ivy Tech Community College, Case No. 15-1720). A three-judge Seventh Circuit panel ruled in July 2016 that it was bound by precedent holding that Title VII does not cover sexual orientation discrimination. The full 11-judge panel of the Seventh Circuit reconsidered that decision, and the majority reached the opposite conclusion based on “a fresh look at [its] position in light of developments at the Supreme Court extending over two decades.”

The Seventh Circuit reasoned that the line between unlawful gender stereotyping and a sexual orientation claim “does not exist at all.” The Court concluded that when a plaintiff “alleges that if she had been a man married to a woman . . . and everything else had stayed the same” that her employer would not have acted against her, then this is “the ultimate case of failure to conform to the female stereotype” and is unlawful sex discrimination.

The dissenting judges criticized the decision as a “statutory amendment courtesy of unelected judges.” Even before this decision was issued, commentators speculated that the case would be appealed to the U.S. Supreme Court to resolve a split in the law between various jurisdictions. As recently as March 2017, for example, an Eleventh Circuit panel ruled that Title VII did not include sexual orientation claims, but a Second Circuit panel concluded that an openly gay male plaintiff’s claim of unlawful gender stereotyping under Title VII survived a motion to dismiss.

As a practical matter, the Seventh Circuit decided only that plaintiffs can bring claims of sexual orientation under Title VII as a subset of sex discrimination. The case has been remanded back to the district court to proceed through litigation, and the defendant will have the opportunity to defend its actions on the merits to show that it did not discriminate against the plaintiff.

Further, as noted in the majority opinion, since 2015, the EEOC has already taken the position that “Title VII’s prohibition against sex discrimination encompasses discrimination on the basis of sexual orientation.” In fact, one of the “Selected Emerging and Developing Issues” listed in the EEOC’s Strategic Enforcement Plan for Fiscal Years 2017-2021 is combating sexual orientation discrimination.

In combination with another of the EEOC’s priorities—preventing systemic harassment—the Seventh Circuit’s decision could motivate the EEOC to narrow in on suspected systemic harassment based on sexual orientation. Although the EEOC’s priorities in a Trump administration could change, the EEOC’s Acting Chair has stated that the current Strategic Enforcement Plan “generally remains a good indicator” of the EEOC’s focus.

Current employment policies prohibiting discrimination based on sex (and other protected characteristics) remain lawful, but in light of the decision and the potential for increased activity from the EEOC, employers may consider whether their policies and practices adequately ward against sexual orientation discrimination as a subset of sex discrimination.