Two More Federal Appellate Decisions on Sexual Orientation Discrimination Under Title VII, With Opposite Results

Following last month’s decisions by two different federal appellate courts that sexual orientation discrimination is not sex discrimination under Title VII, as discussed in our March 2017 E-Update, two other federal courts have now addressed this issue – one for the first time finding coverage under Title VII and the other reiterating a finding of no coverage.

The Seventh Circuit’s Opinion

Following a three-judge panel ruling that sexual orientation was not covered by Title VII and a request for rehearing en banc (meaning by all the members of the court), the full U.S. Court of Appeals for the Seventh Circuit has now issued its groundbreaking majority opinion in Hively v. Ivy Tech Community College, concluding that “discrimination on the basis of sexual orientation is a form of sex discrimination” under Title VII. In so holding, the Seventh Circuit overturned its prior rulings to the contrary. The Seventh Circuit applied two different approaches to reach this conclusion.

First, the Seventh Circuit utilized the comparative method of proof – would the employee have been treated the same way if only her sex were different?  Hively alleged that she would not have been subjected to the adverse employment actions at issue if she were a man, which the majority found “describes paradigmatic sex discrimination.” Applying the comparator method in the context of gender non-conformity cases (a recognized form of sex discrimination), the Seventh Circuit found that Hively “represents the ultimate case of failure to conform to the female stereotype” in that she is not heterosexual. It further noted that its panel decision “described the line between a gender nonconformity claim and one based on sexual orientation as gossamer-thin; we conclude that it does not exist at all.” The Seventh Circuit went on to state: “Any discomfort, disapproval, or job decision based on the fact that the complainant – woman or man – dresses differently, speaks differently, or dates or marries a same-sex partner, is a reaction purely and simply based on sex,” and thus falls within the ambit of Title VII.

The second approach utilized by the Seventh Circuit was sex discrimination under the associational theory: that a person is discriminated against because of the protected characteristic of one with whom she associates. This also necessarily means that the person “is actually being disadvantaged because of her own traits.” The associational theory was first articulated in the Supreme Court case of Loving v. Virginia, in which the Supreme Court rejected state law prohibiting interracial marriage as race discrimination in violation of the Equal Protection Clause. It was subsequently applied in race discrimination cases under Title VII, and, as the Seventh Circuit explained, to the extent that Title VII prohibits associational discrimination on the basis of race, it must also prohibit associational discrimination based on other characteristics, including sex.

In addition to these two approaches, the Seventh Circuit looked to Supreme Court cases addressing sexual orientation beyond the employment context, such as United States v. Windsor (striking down Section 3 of the Defense of Marriage Act) and Obergefell v. Hodges (establishing right to same sex marriage).  The Seventh Circuit observed that, “It would require considerable calisthenics to remove the ‘sex’ from ‘sexual orientation’” and attempts to do so have “led to confusing and contradictory results.” Rather, the Seventh Circuit stated that it must “consider what the correct rule of law is now in light of the Supreme Court’s authoritative interpretations, not what someone thought it meant one, ten or twenty years ago.” And ultimately, the Seventh Circuit relied on the Supreme Court’s decisions and “the common sense reality that it is actually impossible to discriminate on the basis of sexual orientation without discriminating on the basis of sex” to find Title VII coverage.

The Second Circuit’s Opinion

In Zarda v. Altitude Express dba Skydive Long Island, a three-judge panel of the U.S. Court of Appeals for the Second Circuit refused to expand Title VII coverage to sexual orientation. The Second Circuit had previously held, in Simonton v. Runyon, that sexual orientation discrimination was not discrimination based on sex under Title VII. The Zarda panel noted that, just last month, another Second Circuit panel, in Christiansen v. Omnicom Group, had stated that Simonton can only be overturned by the entire Second Circuit sitting en banc. The Zarda panel agreed with the Christiansen panel’s statement, further noting that the Seventh Circuit’s recent groundbreaking decision in Hively v. Ivy Tech Community College, discussed above, which overturned prior Seventh Circuit precedent, was issued by the Seventh Circuit sitting en banc.

What This Means for Employers:  The Seventh Circuit’s opinion is the first federal appellate court decision to find Title VII coverage of sexual orientation discrimination – and sets up a Circuit split with all other federal appeals courts thus far finding no such coverage. The Second Circuit’s opinions in Christiansen and Zarda, however, essentially invite the plaintiffs to request en banc review, which sets up the possibility that this, and other federal appellate courts, may revisit their position. Nonetheless, given the currently existing Circuit split, it is likely that this issue is headed for the Supreme Court. Until then, employers should recognize that the approach to this issue will vary by jurisdiction – and may even change in those jurisdictions if other federal appellate courts join the Seventh Circuit in rejecting their prior position.