EEOC Sex Orientation Bias Suit Is Likely ‘Coming Soon'

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By Kevin McGowan

Feb. 24 — It's just a matter of time before the Equal Employment Opportunity Commission sues a private employer alleging that sexual orientation discrimination violates Title VII of the 1964 Civil Rights Act, EEOC Commissioner Chai Feldblum said Feb. 23.

The EEOC since fiscal year 2013 has been accepting and investigating charges filed by workers alleging sexual orientation discrimination as a form of unlawful sex bias under Title VII, even though no federal appeals court has ruled Title VII covers sexual orientation.

The agency also has ruled in federal employment cases that Title VII's sex discrimination ban prohibits discrimination based on transgender status and sexual orientation. The EEOC has filed three lawsuits against private sector employees alleging they violated Title VII by discriminating against transgender workers.

The EEOC's next logical step is to sue a private employer alleging sexual orientation discrimination violates Title VII, Feldblum said during an American Bar Association-sponsored webinar. That step is likely “coming soon,” she said.

In a case involving a gay federal air traffic controller, a divided EEOC last year ruled for the first time that discrimination based on sexual orientation is “inherently” sex discrimination under Title VII .

The EEOC subsequently filed amicus briefs in two pending cases in the U.S. Court of Appeals for the Eleventh Circuit, asserting that in litigation involving private employers and state and local governments, Title VII likewise bars bias based on sexual orientation .

Although two federal appeals courts have allowed Title VII sex discrimination claims to proceed when gay, lesbian, bisexual or transgender workers alleged bias based on gender stereotyping, no federal circuit has ruled Title VII prohibits bias based on sexual orientation. Instead, most federal courts have said Title VII simply doesn't address sexual orientation bias, reasoning that it differs from bias based on an individual's sex.

The EEOC since 2014 has sued three private employers under Title VII on behalf of transgender workers alleging sex discrimination based on gender identity. Two of those cases have settled, and the third is pending in a federal district court in Michigan .

Existing Federal, State Coverage

Workers alleging sexual orientation discrimination by private employers have been obtaining some relief through the EEOC's administrative process, Feldblum said.

During the past three fiscal years, 3,340 individuals alleging discrimination based on sexual orientation and/or gender identity have filed EEOC charges, Feldblum said. The EEOC has resolved 2,316 of those charges, meaning the agency issued right-to-sue letters or the charges were settled through mediation or after the EEOC investigated, Feldblum said.

The EEOC has obtained approximately $6.5 million in monetary relief for workers alleging sexual orientation and/or gender identity bias and gotten hundreds of employers to change their policies so LGBT discrimination would not recur, Feldblum said.

The EEOC historically has “been ahead of the courts” in identifying new forms of discrimination under Title VII, Feldblum said. The courts “often defer” to the agency's interpretations of the act, and she hopes that will be true regarding the EEOC's view that bias based on sexual orientation or gender identity is sex discrimination, Feldblum said.

The courts “may not necessarily agree” with the EEOC, Feldblum said, but she added that she is pleased by “recent positive trends” in the courts finding LGBT individuals protected from discrimination.

Some 22 states and the District of Columbia prohibit employment discrimination based on sexual orientation and 19 states plus the District also bar bias based on gender identity, said Edward Reeves, an attorney representing employers with Stoel Rives LLP in Portland, Ore.

Obama's Order Expanded Protection

President Barack Obama in 2014 issued an executive order that expanded protections against employment discrimination based on sexual orientation or gender identity, said Adam Romero, senior counsel to the Williams Institute at the UCLA School of Law in Los Angeles.

Executive Order 13,672 amended a prior executive order that barred discrimination based on sexual orientation in federal civilian employment by adding gender identity, Romero said. The order also amended Executive Order 11,246 to prohibit federal contractors or subcontractors from discriminating based on sexual orientation or gender identity .

The ban on LGBT discrimination by federal contractors covers about 35 percent of the U.S. workforce, Romero said. It extends protection against sexual orientation bias to about 11 million workers not currently shielded by state or local laws, he said.

The executive order's ban on gender identity discrimination by contractors extends protection to about 14 million workers who weren't protected against such bias by state or local laws, Romero said.

Obama's executive order and many of the state anti-discrimination laws recognize religious exemptions, said Reeves.

So “bona fide” churches or other religious institutions are excused from the anti-discrimination provision regarding jobs that are “closely connected” to the entity's religious mission, Reeves said.

Many states that shield individuals from gender identity bias also require “reasonable accommodation” for transgender employees, focused on their health and safety while they are transitioning in the workplace, Reeves said.

Legal Arguments Reviewed

The U.S. Supreme Court's decision in Price Waterhouse v. Hopkins, 490 U.S. 228, 49 FEP Cases 954 (1989), in which the court said employment decisions based on “gender stereotyping” could be sex discrimination, opened an avenue for LGBT individuals to pursue Title VII sex discrimination claims.

The Sixth and Eleventh circuits have allowed Title VII sex bias claims by transgender workers to proceed based on the theory they were discriminated against for failure to conform with gender norms, said Gregory Nevins, counsel and workplace fairness program strategist for Lambda Legal in Atlanta.

Some federal district courts also have permitted Title VII claims by transgender workers to advance when they rely on the gender stereotyping theory, Nevins said.

But other federal courts considering Title VII claims based on sexual orientation or transgender status have limited sexual stereotyping to behaviors observable in the workplace, such as how an individual dresses, walks or speaks, Nevins said.

Those courts effectively are ruling a Title VII claim asserting the gender stereotyping theory must show employment decisions were based on the same criteria Price Waterhouse used to deny partnership to Ann Hopkins, that she didn't dress, talk, act or present herself in ways appropriate for a woman, he said.

Gender stereotyping isn't so limited and can include stereotypes related to behavior outside the workplace, Nevins said. For example, the most basic stereotype affecting gay men is that men should be attracted to women and only women, he said.

Courts that rule Title VII's sex discrimination ban can't be interpreted to include bias based on sexual orientation or transgender status also typically say Congress never considered the issue in 1964 or when subsequently amending the act, Nevins said.

But Justice Antonin Scalia's opinion for a unanimous court in Oncale v. Sundowner Offshore Services, Inc., 523 U.S. 75, 76 FEP Cases 21 (1998), which held same-sex harassment claims are cognizable under Title VII, said the act's language can reach claims Congress may never have contemplated when passing the law, Nevins said.

That same logic could support a conclusion that bias based on “sex” includes discrimination against a male worker for being attracted to men or against a female worker for being attracted to women, Nevins said.

That Congress has failed to pass proposed legislation that would amend Title VII to prohibit discrimination based on sexual orientation and gender identity doesn't mean the act's current sex discrimination ban can't be interpreted to reach such bias, Nevins said.

An analogy to case law recognizing Title VII's ban on racial bias is violated if a white employee, for example, is discriminated against because he's married to a black spouse also could help, Nevins said. As in those race bias cases, a male employee alleging discrimination because of his association with a male spouse would be claiming bias based on sex in the same way the white employee would be alleging bias based on race, he said.

Whether courts find any of these arguments convincing as a reason to rule Title VII prohibits bias based on sexual orientation or transgender status remains to be seen, Nevins said.

Best Practices for Employers

As for workplace best practices regarding sexual orientation and gender identity, Reeves said employers should have “an appropriate conduct policy” and enforce it.

Such a policy should emphasize that all employees, applicants and customers are entitled to be treated with “dignity and respect” and set “a higher standard” than merely what the law requires to avoid harassment claims, he said.

The employer's policy should make clear employees are expected not to discriminate or harass others based on sexual orientation or gender identity, Reeves said.

Regarding employees making gender transitions, Reeves recommended that employers take a “case-by-case approach.” They should involve the transitioning employee in decisions about how to deal with dress codes, restroom use and informing co-workers and customers about the changes, Reeves said.

The EEOC has issued guidelines for federal agencies on how to treat employees undergoing gender transitions and an Office of Personnel Management document also provides “very useful guidance,” Reeves said. Both are helpful for private employers as well as federal agencies, he said.

The Supreme Court's decision in Obergefell v. Hodges, 135 S. Ct. 2584 (2015), which held state law bans on same-sex marriage are unconstitutional, means many employers have to alter their employee benefits policies, said Teresa Renaker of Renaker Hasselman LLP in San Francisco.

Employers providing a welfare benefits plan that includes coverage for employees' opposite-sex spouses must also now provide the same coverage for employees' same-sex spouses, Renaker said.

Similarly, non-mandatory spousal benefits in an employee pension plan must be offered on an equal basis to employees with same-sex spouses, she said.

The Department of Health and Human Services last September issued a proposed rule that interprets Section 1557 of the Affordable Care Act, which bars sex discrimination in covered health-care plans, to prohibit bias based on gender identity.

Employers that offer health-care benefits therefore should avoid “blanket exclusions” for coverage of treatments related to gender transitions, Renaker said. Such exclusions historically have been based on “stigma” rather than on the treatments' costs, she said.

Employers also should avoid “gender-based necessity denials” of health plan coverage, such as automatic denials of gynecological care because a female transgender employee was born male, Renaker said.

Similarly, employers should avoid medical necessity denials of health-care coverage for gender transition-related care, such as hormone treatments, she said.

All these issues are dealt with in the HHS proposed rule interpreting the ACA, she said.

To contact the reporter on this story: Kevin McGowan in Washington at kmcgowan@bna.com

To contact the editor responsible for this story: Susan J. McGolrick at smcgolrick@bna.com