Federal Court Denies Title VII Sexual Orientation Claim, But With Serious Reservations About Underlying Rationale

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Federal employment discrimination claims made on the basis of the plaintiff’s sexual orientation are not permissible in Illinois, Indiana, and Wisconsin, at least for now.   The Seventh Circuit Court of Appeals recently ruled against a woman’s employment discrimination claim based on sexual orientation, concluding that Title VII’s protection against discrimination based on “sex” does not extend to “sexual orientation.”  Hively v. Ivy Tech Community College (7th Cir. July 28, 2016).  In so ruling, the court adhered to its binding precedent mandating the result.  However, the court also concluded that excessively blurred lines exist between protection for gender-nonconforming claims (those in which adverse employment action was based on the employee’s failure to conform to others’ views on how a person of the employee’s gender should look or act),  which enjoy some protection under Title VII, and sexual orientation claims, which do not.

The following paragraphs further explain this important case and its implications for employers.

Refuting the EEOC’s Inclusion of Sexual Orientation as a Title VII Protected Class

In Hively, the court initially recognized a “groundswell of questions about the rationale for denying sexual orientation discrimination claims while allowing nearly indistinguishable gender non-conformity claims,” as cognizable sex discrimination claims under Title VII.  The court then observed that its own federal circuit (Indiana, Illinois, and Wisconsin) has resoundingly rejected any sexual orientation discrimination claims under Title VII, along with all other federal courts of appeal that have addressed such claims.  In doing so, such appellate courts have interpreted Title VII’s use of the word “sex” as related to a person’s gender, not a person’s sexual orientation. 

The court then considered a contrary administrative decision issued by the Equal Employment Opportunity Commission, Baldwin vs. Foxx.  In that decision, the EEOC determined that a sexual orientation claim is in fact cognizable under Title VII, based on three underlying rationales.  First, sexual orientation discrimination amounts to sex discrimination because it entails treating someone less favorably because of the employee’s sex.  Second, sexual orientation discrimination involves associational sex discrimination, based on who the employee dates or marries.  Third, sexual orientation discrimination can be based on gender stereotypes in which employees are discriminated against for failing to live up to social norms about masculine and feminine behaviors and appearances.  Applying these rationales, the EEOC concluded that the borders between sexual orientation discrimination and sex discrimination are too imprecise to warrant different legal protections.  While the Hively court found the EEOC’s argument fairly compelling, the court determined that its own legal precedent would not allow for the EEOC’s interpretation.

Distinguishing Between “Gender Non-Conforming” and Sexual Orientation Claims

The court explored the EEOC’s reasoning further, finding too that the distinctions between gender non-conforming and sexual orientation employment discrimination are increasingly difficult to justify.  This is particularly true in light of “recent legal developments and changing workplace norms.”

The court first focused on the 1989 U.S. Supreme Court case of Price Waterhouse v. Hopkins.  In that case, the plaintiff Ann Hopkins succeeded on her claim that she was unlawfully fired for failing to comply with typical gender stereotypes for women.  In a nutshell, the evidence showed that she was not considered “feminine enough” for her female gender and therefore failed to make partner.  The Supreme Court ruled that such adverse employment action violated Title VII, finding that “Congress intended to strike at the entire spectrum of disparate treatment of men and women resulting from sex stereotypes.” 

The Seventh Circuit continued with a summary of subsequent cases in which employees successfully asserted discrimination claims for failing to live up to various gender norms, including cases brought by gay, lesbian, bisexual, and transgender litigants.  As it found, the validity of these claims has depended on “cull[ing] out the gender non-conformity discrimination from the sexual orientation discrimination,” which proved “elusive.”  The plaintiffs had to show that discrimination was based not on their sexual relationships, but instead on actions or appearances that did not conform to their bosses’ views on gender norms.

The Hively court determined that an apparent unfairness exists in retaining the sexual orientation/gender non-conforming discrimination distinction.  For example, as the court observed, an employee could legally get married to a same-sex partner one day and then be legally fired the next day for sexual orientation discrimination.  Yet such person could be legally protected for failing to meet expected gender norms, while having no legal protections with respect to his or her romantic or sexual relationships.  Significantly, as the court further noted, many state laws now protect against sexual orientation discrimination, but many states have not yet adopted such legal protections.  The court found such results quite odd, with “the roots of sexual orientation discrimination and gender discrimination wrap[ped] around each other inextricably.”  Despite these qualms, the Seventh Circuit justices ultimately held that they must deny any Title VII claim based solely on sexual orientation discrimination, at least for now.

Given its extensive commentary, the Hively court exercised significant judicial restraint in following federal appellate court precedent and rejecting the woman’s claim against her employer.  In doing so, the court also substantially relied on Congress’ repeated rejection of legislation that could extend Title VII’s protection to encompass sexual orientation.  In addition, the court drew on the landmark Obergefell ruling, in which the Supreme Court declined to adjudicate the same-sex marriage claims through the lens of gender discrimination, instead basing its decision on the Due Process and Equal Protection clauses of the Fourteenth Amendment to the U.S. Constitution. 

What’s Next for Sex-Related Title VII Claims?

While reaffirming that the court cannot currently interpret “sex discrimination” to include sexual orientation discrimination, the Seventh Circuit clearly invited a “fresh look” at possibly including sexual orientation discrimination within Title VII’s protection.  Left with such “unsatisfying results,” as the court termed its own ruling, the court concluded that the distinction between gender non-conformity discrimination claims and sexual orientation discrimination claims may well “come to be seen as defying practical workability and lead us to reconsider our precedent.”

Notably, the court never referred to legally valid gender non-conforming claims as “gender identity” claims under Title VII.  The term “gender non-conforming” generally refers to not following stereotypes or other common expectations about how an individual should look or act based on biological sex.  The term “gender identity” generally refers to how people see and identify themselves – male, female, both, neither, or some combination.  The Hopkins case involved a woman who consistently asserted her gender identity as a woman, but whom her bosses did not consider sufficiently feminine.  The distinctions between the categories are often not clear, and the Seventh Circuit observed an intrinsic overlap between terms. 

At present, the distinctions, however ambiguous, are important.   Many state and local laws today specifically prohibit gender identity discrimination, but they do not use “gender non-conforming” terminology in doing so.  Effective Title VII cases, on the other hand, use “gender non-conforming” language, as was apparently important to the court here (in relation to a sexual orientation claim) and for the employee’s successful claim in Hopkins.  Thus, the Seventh Circuit’s decision leaves employers with a good deal of gray area as to whether “gender identity” claims will be treated as legitimate Title VII claims in line with the “gender non-conformity” cases or will be distinguished as invalid under sexual orientation judicial precedent.

In the aftermath of Hively, employers should note as follows. 

  • At present, the court’s decision precludes federal Title VII claims on the basis of sexual orientation, at least in the Seventh Circuit (Illinois, Indiana, and Wisconsin).
  • The legal distinctions in this area of law, as the Court observed, are not clear, and the law in this area is very much in flux.
  • Employers both within the Seventh Circuit and outside its jurisdiction should carefully monitor legislative developments in this area, for which the Court expressly called.
  • Importantly, many state and local laws do prohibit sexual orientation or gender identity discrimination, so even Seventh Circuit employers could be held liable for other damages relating to such discrimination if state or local laws apply.

In light of the court’s increasing discomfort in distinguishing between gender non-conforming and sexual orientation claims and the additional issues that arise from gender identity cases, Title VII’s scope of legal protection for gender-related discrimination issues likely will continue evolving.