EEOC Settles Historic Case Alleging Sexual Orientation Discrimination

Sad woman at the officeDoes discrimination on the basis of sexual identity violate federal laws that prohibit sex discrimination? The Equal Employment Opportunities Commission (EEOC), the agency charged with enforcing Title VII of the Civil Rights Act, believes that it does. The EEOC recently announced its first settlement of a lawsuit alleging sex discrimination on the basis of sexual orientation.

Sexual Orientation Discrimination Laws

Several states have enacted laws that expressly designate sexual orientation as a protected category (like race and gender) that cannot be the basis for adverse employment decisions. Federal law, however, provides no express protection against sexual orientation discrimination.

Title VII of the federal Civil Rights Act prohibits sex discrimination in employment. A number of federal courts have drawn a distinction between sex discrimination and sexual orientation discrimination. Those courts have declined to expand “sex” beyond “gender” to include “sexual identity.” For example, the Court of Appeals for the Seventh Circuit decided that Eastern Airlines did not violate Title VII when it based a decision to fire a pilot on the pilot’s sex change. The court ruled that “sex discrimination” refers to discrimination against males and females, but not to discrimination against transsexuals.

More recently, the Court of Appeals for the Sixth Circuit decided that harassment of an employee based on the perception that the employee is gay does not violate Title VII. That ruling is in tension with an earlier Supreme Court decision that defined sex discrimination as including sexual stereotyping, as well as the Supreme Court’s subsequent ruling that sex discrimination includes sexual harassment even if the harasser and the harassed are of the same sex.

The Sixth Circuit, like some other federal courts, based its conclusion on a strained distinction between discrimination based on “gender non-conformance” (e.g., a male who exhibits stereotypically female characteristics of behavior or appearance) and discrimination based on a perception (unrelated to the employee’s behavior or appearance) that an employee is homosexual. The court decided that discrimination against a “gender non-confirming” employee is illegal because it is rooted in sexual stereotypes, while discrimination based on a perception that is not founded on stereotypes does not violate Title VII. The distinction, which protects gay employees who “look gay” but not those who “look straight,” has been widely criticized as unsound.

Federal courts have often based their limited reading of Title VII on the consistent refusal of Congress to amend the law by adding sexual identity or sexual orientation as a protected category. Courts have reasoned that Congress would not need to amend the law if “sex” included “sexual identity,” and that its express rejection of attempts to amend the law mean that Congress does not want to protect sexual orientation. In other contexts, however, courts have frequently recognized that the failure of Congress to amend a law provides only ambiguous evidence of what Congress intended when it enacted the law.

EEOC’s Position

While federal courts have been slow to interpret sex discrimination as encompassing sexual identity discrimination, the EEOC’s recent actions may force a change in federal law. The EEOC is charged with enforcing Title VII. Defying the federal courts that have refused to regard sexual identity discrimination as sex discrimination, the EEOC announced that it would interpret Title VII's prohibition of sex discrimination as “forbidding any employment discrimination based on gender identity or sexual orientation.”

To advance its position, the EEOC filed sex discrimination lawsuits based on sexual orientation against Scott Medical Health Center and Pallet Companies, dba IFCO Systems. The Scott suit alleged that a gay male employee was subjected to harassment because of his sexual orientation. The suit against IFCO alleged that a company supervisor sexually harassed an employee because she was a lesbian.

Last week, the EEOC settled the case against IFCO. It entered into a consent decree that requires IFCO to pay $182,200 to the harassment victim, to donate $20,000 to the Human Rights Campaign's Workplace Equality Program, to train its managers, supervisors, and employees on LGBT issues, and to refrain from discrimination or retaliation in the future.

What the EEOC’s Position Means for Employers

At some point, an employer is likely to seek a district court ruling challenging the EEOC’s conclusion that sex discrimination includes sexual identity discrimination. The loser in that battle will likely seek an appellate court ruling. If federal appellate courts are divided in the way they resolve those appeals, the Supreme Court could step in to decide the issue.

Federal courts are not required to adopt the EEOC’s position, but they are certainly required to give it careful consideration and appropriate weight. As a practical matter, how much weight it receives will depend upon the court that weighs it, but the opinions of federal agencies that are charged with the interpretation and implementation of federal laws are usually given considerable deference.

Sensible employers will see the handwriting on the wall and, if they are not already required to do so by state law, will assure that their policies against sex discrimination and sexual harassment cover sexual orientation and sexual identity. Taking a proactive approach will help shield employers from charges that they condoned sexual orientation discrimination by failing to adopt policies that forbid it.

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