Discrimination in Employment Issues for LGBT Individuals

Congress has failed to pass legislation expressly protecting LGBT employees from discrimination, even though polls reflect that American people overwhelmingly support protecting gay and trans people from workplace discrimination. Only 20 states, the District of Columbia, and Puerto Rico, have laws expressly prohibiting discrimination in employment because of sexual orientation and gender identity.

Although Title VII of the Civil Rights Act of 1964 (Title VII) does not expressly ban employment discrimination against LGBT employees or applicants, recent federal court decisions have acknowledged Title VII’s protection of transgender individuals. This year, the Seventh Circuit Court of Appeals became the first federal appellate court to rule that Title VII prohibits discrimination based on sexual orientation. Hively v. Ivy Tech Community College of Indiana, 853 F.3d 339 (7th Cir. 2017). Another first this year was a ruling by a federal judge in the Eastern District of Pennsylvania that transgender individuals diagnosed with gender dysphoria may be covered under the Americans with Disabilities Act (ADA). Blatt v. Cabela’s Retail, Inc., No. 15:14-cv-04822, 2017 WL 2178123 (E.D. Pa. May 18, 2017). These breakthroughs were a long time coming, and LGBT advocates are hopeful that other courts will adopt the reasoning of these decisions favorable to LGBT employees.

Title VII provides, in pertinent part, that “[i]t shall be an unlawful employment practice for an employer . . . to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s . . . sex.” For the past 50-plus years, the Supreme Court has expanded the interpretation of “because of sex.” In Price Waterhouse v. Hopkins, the Court used the terms “sex” and “gender” interchangeably, expressly finding that “[i]n forbidding employers to discriminate against individuals because of their sex, Congress intended to strike at the entire spectrum of disparate treatment of men and women resulting from sex stereotypes.” 490 U.S. 228, 251 (1989). Nine years later, in Oncale v. Sundowner Offshore Servs., the Court ruled that same-sex harassment claims are covered by Title VII. 523 U.S. 75 (1998). In 2004, the Sixth Circuit Court of Appeals was the first federal court to expand the Price Waterhouse sex stereotyping theory to a transgender employee. Smith v. City of Salem, 378 F.3d 566 (6th Cir. 2004). In Smith, the appellate court reversed the dismissal by the trial court, and the case settled four months later.

In 2012, the EEOC issued a landmark ruling in Mia Macy v. Eric Holder, Attorney General, Department of Justice (Bureau of Alcohol, Tobacco, Firearms & Explosives) (Macy), holding for the first time that claims of transgender discrimination are cognizable under Title VII. EEOC Appeal No. 0120120821, 2012 WL 1435995 (Apr. 20, 2012). The EEOC determined that when an employer discriminates against an employee because the person is transgender, the employer has engaged in disparate treatment “related to the sex of the victim.” And, this is true whether or not “an employer discriminates against an employee because the individual has expressed his or her gender in a non-stereotypical fashion, because the employer is uncomfortable with the fact that the person has transitioned or is in the process of transitioning from one gender to another, or because the employer simply does not like the person identifying as a transgender person. In each of these circumstances, the employer is making a gender-based evaluation and violating the Supreme Court’s admonition that ‘an employer may not take gender into account in making an employment decision.” Macy at 7–8.

In 2014, for the first time in its history, the EEOC filed lawsuits challenging discrimination against transgender employees as violating Title VII. Equal Employment Opportunity Commission v. R.G. & G.R Harris Funeral Homes, Inc. is currently pending before the Sixth Circuit. The EEOC is appealing the trial court’s decision that the defendant is entitled to an exemption under the Religious Freedom Restoration Act (RFRA) from Title VII. A consent judgment was entered in the second case, Equal Employment Opportunity Commission v. Lakeland Eye Clinic, about six months after it was filed.

The EEOC and private plaintiffs in transgender discrimination lawsuits are working toward pushing past the sex stereotyping theory to achieve judicial decisions that transgender discrimination is sex discrimination. One recent decision of note is Fabian v. Hospital of Central Connecticut, where the court, in denying the employer’s motion for summary judgment, held that “[e]mployment discrimination on the basis of transgender identity is employment discrimination ‘because of sex’ and constitutes a violation of Title VII of the Civil Rights Act.”

In July 2015, in ruling on a federal sector matter, the EEOC determined for the first time that “sexual orientation is inherently a ‘sex-based consideration,’ and an allegation of discrimination based on sexual orientation is necessarily an allegation of sex discrimination under Title VII.” Subsequently, on March 1, 2016, the EEOC filed its first set of lawsuits challenging sexual orientation discrimination as sex discrimination under Title VII. U.S. Equal Employment Opportunity Commission v. Pallet Companies involved a lesbian woman who was harassed and then terminated in retaliation for objecting to the harassment. A consent decree was entered on June 28, 2016. The other case, U.S. Equal Employment Opportunity Commission v. Scott Medical Health Center, involves a gay man who was harassed at work and who claims that he was constructively discharged. Trial in this matter is scheduled for December 11, 2017.

As noted by the Seventh Circuit in Hively v. Ivy Tech Community College of Indiana, “[f]or many years, the courts of appeals of this country understood [Title VII’s] prohibition against sex discrimination to exclude discrimination on the basis of a person’s sexual orientation. The Supreme Court, however, has never spoken to that question.” 853 F.3d at 340. In Hively, the Seventh Circuit ruled that sexual orientation discrimination is sex discrimination under Title VII. Ivy Tech did not appeal. Two other circuit courts have recently ruled that sexual orientation discrimination claims are not covered by Title VII. The Second Circuit has recently voted in favor of rehearing the appeal in Zarda v. Altitude Express. The Eleventh Circuit has recently denied en banc review in Evans v. Georgia Reg’l Hosp., and it is expected that the employee’s attorneys at Lambda Legal will appeal to the Supreme Court.

To briefly address discrimination in employment benefits, Section 1557 of the Affordable Care Act (ACA) prohibits healthcare providers and health insurance issuers from discriminating on the basis of sexual orientation and gender identity, among other protections. The US Department of Health and Human Services is currently enjoined from enforcing Section 1557’s regulations prohibiting discrimination based on gender identity. Regardless of what happens to the ACA, the EEOC has taken the position that employers who fail to provide healthcare coverage for their transgender employees engage in sex discrimination in violation of Title VII.

Although there have been important victories in the fight for equal employment opportunity for LGBT individuals, there is much more work to be done to continue the momentum in ensuring that all gay, lesbian, bisexual, transgender, and genderqueer people are legally protected from employment discrimination.