Two Federal Courts O ...

Two Federal Courts Of Appeal Find That Title VII Prohibits Workplace Discrimination On The Basis Of Sexual Orientation And Transgender or Transitioning Status

March 19, 2018 | by David L. Johnson

Back in April 2017, the federal 7th Circuit Court of Appeals (governing Illinois, Indiana, and Wisconsin) made big news when it determined that Title VII of the Civil Rights Act of 1964 prevents employers from discriminating on the basis of sexual orientation.  Within the last few days, two other federal courts of appeal have issued similar groundbreaking decisions.

On February 26, 2018, the 2d Circuit Court of Appeals followed the 7th Circuit’s lead in the Zarda v. Altitude Express case and concluded that Title VII’s prohibition of discrimination based on “sex” should be interpreted as forbidding discrimination on the basis of sexual orientation.  In an en banc decision decided by every judge on the court (which governs New York, Connecticut and Vermont), the 2d Circuit concluded that a skydiver could pursue claims that he was fired because he is gay.

More recently, on March 7, 2018, a three-judge panel of the 6th Circuit Court of Appeals (which governs Tennessee, Kentucky, Ohio, and Michigan) unanimously determined that Title VII protects transgender and transitioning employees.  In EEOC v. R.G. & G.R. Harris Funeral Homes, Inc., Aimee Stephens, a Michigan funeral director who formerly went by the name “William Stephens,” was fired after informing the funeral home owner of a “gender identity disorder” and plans to have sex reassignment surgery and to “live and work full-time as a woman.”

In addition to finding that Stephens was unlawfully fired due to her failure to conform to sex stereotypes in violation of Title VII, the 6th Circuit found that Title VII also allowed Stephens to “pursue a claim that she was discriminated against on the basis of her transgender and transitioning status.”  The court reasoned that “it is analytically impossible to fire an employee based on that employee’s status as a transgender person without being motivated, at least in part, by the employee’s sex.”  It also noted that “discrimination against transgender persons necessarily implicates Title VII’s proscriptions against sex stereotyping,” because a transgender person is someone who is “inherently gender non-conforming.”

The 6th Circuit also rejected the funeral home’s argument that its termination decision was protected by the federal Religious Freedom Restoration Act, which forbids the government from enforcing a religiously neutral law if that law substantially burdens an individual’s genuine religious exercise and is not the least restrictive way to promote a compelling governmental interest.  In addition to noting that the funeral home “has virtually no religious characteristics,” the court concluded that “the Funeral Home’s religious exercise would not be substantially burdened by continuing to employ Stephens without discriminating against her on the basis of sex stereotypes; the EEOC has established that it has a compelling interest in ensuring the Funeral Home complies with Title VII; and enforcement of Title VII is necessarily the least restrictive way to achieve that compelling interest.”

Is it a defense to the funeral home that it was fearful that it would lose business if it employed a transgender funeral director?  The answer is “no.”

It’s very possible that the funeral home will request an en banc reconsideration of the 6th Circuit panel’s ruling before the entire Circuit.  So there’s a chance that either the full Circuit or the Supreme Court could reverse course on this case.  If other 6th Circuit judges follow this panel’s lead, the 6th Circuit likely would follow the 2d and 7th Circuits in concluding that Title VII also bans discrimination on the basis of sexual orientation.  Other courts, including the 11th Circuit very recently, have found that Title VII does not extend to sexual orientation.  Because of these split decisions and the increasing national attention to these issues, it seems increasingly likely that the U.S. Supreme Court will consider these issues very soon and offer more clear guidance on the breadth of Title VII.

In the meantime, many employers’ preconceived understandings of the parameters of Title VII may not apply and they face the risk of discrimination lawsuits on the basis of sexual orientation, transgender status, transitioning status, or sexual stereotyping.  The EEOC is certainly taking the position that these are protected categories.  Under these circumstances, it’s important to tread carefully when making employment decisions and to seek legal counsel if uncertainties arise.  Many employers may find it prudent to err on the side of caution.

David Johnson, Attorney, Butler Snow Law Firm, Nashville, Tennessee office