Title VII of the Civil Rights Act of 1964 prohibits employment discrimination “because of . . . sex.” 42 U.S.C. § 2000e-2(a) (2012 Since its enactment, the Supreme Court has interpreted Title VII expansively to prohibit not only discrimination based on gender, but also same-sex sexual harassment and discrimination based on gender stereotypes. Nevertheless, the U.S. Supreme Court has not yet ruled on the issue of whether discrimination based on sexual orientation or transgender status violates Title VII.
The landmark case for sex discrimination based on gender stereotypes is Price Waterhouse v. Hopkins, 490 U.S. 228 (1989). In Price Waterhouse, the Supreme Court recognized that employment discrimination based on sex stereotypes (e.g., assumptions and expectations about how persons of a certain sex should dress, behave, etc.) is unlawful sex discrimination under Title VII. Price Waterhouse had denied Hopkins a promotion in part because the firm felt that she did not act as woman should act. She was told she needed to "walk more femininely, talk more femininely, [and] dress more femininely" in order to secure a partnership. The Court found that this constituted evidence of sex discrimination as "[i]n the . . . context of sex stereotyping, an employer who acts on the basis of a belief that a woman cannot be aggressive, or that she must not be, has acted on the basis of gender." The Court further explained that Title VII's "because of sex" provision strikes at the "entire spectrum of disparate treatment of men and women resulting from sex stereotypes." The Supreme Court opened the door for LGBT workers to bring Title VII claims when it held that sex-role stereotyping can constitute discrimination in violation of Title VII's prohibition against sex discrimination, but it would take years for the Federal Courts to extent Title VII protection based on sexual orientation or transgender status.
Until recently, courts have been reluctant to extend the gender stereotyping theory under Title VII protections to individuals discriminated on the basis of sexual orientation or transgender status without any additional evidence related to gender stereotype nonconformity. The theory advanced by past courts was that discrimination based on sexual orientation or against a transsexual because she is a transsexual is not 'discrimination because of sex’ and, therefore, employees discriminated on the basis of sexual orientation and transsexuals are not protected under Title VII.
This limited view of Title VII is changing. Within the past year, several circuits have expanded Title VII protection to include discrimination based on transgender status and sexual orientation. Although the courts are using different theories, the courts are expanding the “failure-to-conform stereotyping” protection from Price Waterhouse to include transgender status and sexual orientation.
Title VII Protection Granted to Transgender Status
The Sixth Circuit recently held that "Title VII protects transgender persons because of their transgender or transitioning status, because transgender or transitioning status constitutes an inherently gender non-conforming trait." EEOC v. R.G. & G.R. Harris Funeral Homes, Inc., No. 16-2424 (6th Cir. Mar. 7, 2018). In that case, an employee was terminated after she told her employer that she was transgender and would begin presenting as a woman. The Sixth Circuit ruled that RG & GR Harris Funeral Homes unlawfully discriminated against its employee “because of sex.” The decision reversed the lower court’s decision, which held that religious belief was sufficient to exempt the employer from anti-discrimination laws. The Sixth Circuit explained that an employer cannot take action against an employee "based on that employee's status as a transgender person without being motivated, at least in part, by the employee's sex." The Sixth Circuit explained that "discrimination against transgender persons necessarily implicates Title VII's proscriptions against sex stereotyping. . . . There is no way to disaggregate discrimination on the basis of transgender status from discrimination on the basis of gender non-conformity."
Title VII Protection Granted to Sexual Orientation
Two United States Court of Appeals have recently held that Title VII prohibits discrimination on the basis of sexual orientation: Hively v. Ivy Tech, 853 F.3d 339, 351-52 (7th Cir. April 4, 2017 2017) (en banc), Zarda v. Altitude Exp., Inc., 883 F.3d 100 (2d Cir. Feb. 26, 2018) (en banc).
Hively was the first federal appellate court to extend protection under Title VII on the basis of sexual orientation. Kimberly Hively was a part-time adjunct professor at Ivy Tech Community College, who was allegedly repeatedly denied consideration for full-time teaching positions and her part-time contract was not renewed due to her sexual orientation. The Seventh Circuit initially ruled that Title VII did not provide protection for sexual orientation but then granted a rare en banc hearing and reversed. The Hively court , in an 8 to 3 decision, held that a plaintiff "who alleges that she experienced employment discrimination on the basis of her sexual orientation has put forth a case of sex discrimination for Title VII purposes."
Chief Judge Diane Wood, writing for the majority, framed the court's decision not as an "amendment" to Title VII but as a "pure question of statutory interpretation” of the meaning of “because of sex.”
The Court considered Hively's two theories of discrimination: (1) a comparative method and (2) discrimination by association. The Court determined that both arguments support a possible actionable theory of discrimination based on sexual orientation.
Under the comparative method, the court looked to whether if Hively had been a man attracted to women, Ivy Tech would have refused to promote and fired her. If proven that the employment determinations would have been different if Hively were male, all other things equal, it would be a classic case of gender non-conformity, which the Supreme Court has already held is a form of sex discrimination under Title VII. The majority also relied upon the gender-based stereotyping theory articulated in Price Waterhouse: "Viewed through the lens of the gender non-conformity line of cases, Hively represents the ultimate case of failure to conform to the female stereotype (at least as understood in a place such as modern America, which views heterosexuality as the norm and other forms of sexuality as exceptional): she is not heterosexual."
Under the discrimination by association theory, the court looked to whether Hively had the right to associate intimately with a person of the same sex and ruled that under either theory, she had alleged a claim for discrimination based on sex. The Supreme Court has already ruled that Title VII extends protection for association with person of another race; the Hively court reasoned that the same principles would mean that Title VII prohibits discrimination based on someone's romantic association with a person of the same sex.
The Second Circuit in Zarda, following the Seventh Circuit’s decision in Hively, recently held that discrimination based on sexual orientation is a form of sex discrimination under Title VII. The Zarda court stated, “Because one cannot fully define a person's sexual orientation without identifying his or her sex, sexual orientation is a function of sex. Indeed sexual orientation is doubly delineated by sex because it is a function of both a person's sex and the sex of those to whom he or she is attracted. Logically, because sexual orientation is a function of sex and sex is a protected characteristic under Title VII, it follows that sexual orientation is also protected.
Employers Best Practices Related to Sexual Orientation or Transgender Status Discrimination
The U. S. Supreme Court has not ruled on the issues of whether sexual orientation or transgender status are protected under Title VII, and federal attempts to legislate specific LGBT rights have not been successful.
Companies who employ workers in the Second Circuit (New York, Vermont, Connecticut), the Sixth Court (Michigan, Kentucky, Ohio) and Seventh Circuit (Illinois, Wisconsin, Indiana), which have recognized transgender or sexual orientation discrimination as a prohibited activity under Title VII, should update their employment policies and practices to assure they are not violating the law.
Companies who employ workers in other jurisdictions should be mindful of local laws that may prohibit gender discrimination under Title VII because of sexual orientation or transgender status. The majority of states now have local laws that protect against discrimination based on sexual orientation and transgender status and employers should update their employment policies and practices to assure they are not violating the local laws.