Title VII Doesn't Cover Sex Orientation, 7th Cir. Rules

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By Kevin McGowan

July 29 — Discrimination against a worker based on sexual orientation isn't prohibited by federal law, a federal appeals court in Chicago ruled, rejecting—for now—the EEOC's position on the issue ( Hively v. Ivy Tech Cmty. Coll. , 2016 BL 244172, 7th Cir., No. 15-1720, 7/28/16 ).

The July 28 decision by the U.S. Court of Appeals for the Seventh Circuit was the first by a federal circuit court to address the question since the Equal Employment Opportunity Commission in July 2015 held in an administrative ruling that bias based on sexual orientation is sex discrimination and thus violates Title VII of the 1964 Civil Rights Act.

The EEOC's general counsel said he disagreed with the court's conclusion. Gay rights groups' representatives expressed disappointment and renewed their calls for Congress to pass the Equality Act (S. 1858, H.R. 3185).

Two other federal appeals courts have pending cases raising the same issue, so they probably also will rule on whether Title VII reaches sexual orientation.

Absent congressional action, the U.S. Supreme Court ultimately may have to resolve the matter. No federal appeals court yet has ruled that Title VII prohibits bias based on sexual orientation.

Precedent Compels Conclusion

The Seventh Circuit panel said it was bound by circuit precedent rejecting recognition of sexual-orientation bias claims under Title VII, as well as repeated congressional inaction on efforts to amend federal civil rights law to include bias protections for gay workers.

It therefore affirmed a district court's dismissal of lesbian college instructor Kimberly Hively's Title VII claims that Ivy Tech Community College denied her a full-time position and promotions because of her sexual orientation.

Nevertheless, citing “changing workplace norms,” the panel examined the reasoning underlying the EEOC's decision in Baldwin v. Foxx (E.E.O.C. 2015).

The EEOC in that federal sector case ruled Title VII prohibits bias based on sexual orientation, setting out three justifications for its conclusion.

The agency said sexual orientation bias is inherently sex discrimination, that precedent prohibiting sex bias based on failure to conform with gender norms must encompass sexual orientation and that race bias cases based on associational discrimination by analogy extend to persons discriminated against for same-sex relationships.

“Perhaps the writing is on the wall” for a change in federal law, but that change must come from Congress or the Supreme Court, Judge Ilana Diamond Rovner wrote, in an opinion joined by Judges William Bauer and Kenneth Ripple.

Ripple didn't join the parts of the opinion in which the court re-examined the judicial history of sexual orientation claims under Title VII in light of the EEOC's Baldwin decision.

EEOC General Counsel Disagrees

“While the court properly looked to EEOC’s position in Baldwin, we disagree with the court’s ultimate conclusion,” EEOC General Counsel P. David Lopez told Bloomberg BNA in a July 29 e-mail.

The court issued a well-reasoned, thoughtful opinion, said John Maley of Barnes & Thornburg LLP, which represented Ivy Tech.

Ivy Tech doesn't discriminate on any basis, including sexual orientation, and its policies prohibit bias on the basis of sexual orientation, Maley told Bloomberg BNA in a July 29 e-mail.

But Title VII simply doesn't cover sexual orientation, and the court's ruling aligns with every federal appellate decision on the issue, said Maley, a partner in the firm's Indianapolis office.

‘Odd State' of Law

Lambda Legal, which represented Hively, said the Seventh Circuit “acknowledges” its result is “the wrong outcome” but the court said it was constrained by precedent.

The court “repeats over and over again that the distinction between discrimination on the basis of gender nonconformity, which is prohibited by Title VII, and sexual orientation discrimination, which the court says isn't prohibited by Title VII, is an arbitrary line,” said Gregory Nevins, a Lambda Legal attorney in Atlanta who argued for Hively on appeal.

The court said although that distinction creates “an odd state of affairs,” it was bound by prior Seventh Circuit cases to rule that Hively lacks Title VII protection.

“The writing is on the wall, the precedents the court felt bound by need to be reconsidered and we need Congress to pass the Equality Act,” Nevins said in a July 28 statement.

Rights Groups Disappointed

The ruling is “disappointing and puzzling,” because the court discusses at length why the distinctions made in prior decisions make little sense but concludes no change is possible absent further direction from Congress or the Supreme Court, said Shannon Minter, legal director of the National Center for Lesbian Rights in San Francisco.

“The result is simply to prolong the current unstable and unfortunate state of affairs where lower courts are left with no principled guidance about how to rule on sex discrimination claims by lesbian, gay, or bisexual plaintiffs,” Minter told Bloomberg BNA in a July 29 e-mail. “It makes no sense to recognize that prior precedents are wrong and yet to refuse to reconsider them. Such a ruling damages the credibility of courts and diminishes respect for the law.”

That isn't “a tenable situation” and the “net effect” likely will be to “encourage other circuits to hold that discrimination based on sexual orientation is sex discrimination,” Minter said.

The pending appellate cases raising the same issue are Christiansen v. Omnicom Group Inc., 2d Cir., No. 16-748, in the Second Circuit and Evans v. Georgia Regional Hospital, 11th Cir., No. 15-15234, in the Eleventh Circuit.

The EEOC has filed amicus briefs in both cases contending that bias based on sexual orientation is unlawful sex discrimination under Title VII.

Bill Pending in Congress

The Seventh Circuit failed “to join the growing consensus that existing civil rights law must reasonably be interpreted to include non-discrimination protections based on sexual orientation,” said Sarah Warbelow, the Human Rights Campaign's legal director in Washington.

The decision “makes the need even more urgent for Congress to pass the Equality Act, making explicitly and permanently clear that LGBTQ people are protected under our nation’s civil rights laws,” Warbelow said in a July 29 statement.

The Equality Act currently has 218 congressional co-sponsors, including two Republicans, Sen. Mark Kirk (Ill.) and Rep. Bob Dold (Ill.), according to the Human Rights Campaign.

The bill would explicitly add sexual orientation and gender identity as protected categories under the federal civil rights laws, barring discrimination on those grounds in public accommodations, education and housing as well as employment.

Democratic presidential nominee Hillary Clinton has pledged to make enacting the bill her “highest priority” if elected, the group said.

In its decision, the Seventh Circuit said that since 1994, Congress has “repeatedly rejected legislation that would have extended Title VII to cover sexual orientation.”

That legislative inaction persisted, “even in the face of an abundance of judicial opinions recognizing an emerging consensus that sexual orientation in the workforce can no longer be tolerated,” the court said.

“In short, Congress's failure to act to amend Title VII to include sexual orientation is not from want of knowledge of the problem,” the court said.

The Seventh Circuit's understanding in its prior cases that “Congress intended a very narrow reading of the term ‘sex'” when it passed Title VII therefore “appears to be correct,” the court said.

Adam L. Bartrom and Jason T. Clagg of Barnes & Thornburg in Fort Wayne, Ind., also represented Ivy Tech.

—Patrick Dorrian contributed to this report.

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

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