On Monday, the 2nd U.S. Circuit Court of Appeals ruled in a long-running case that a federal law banning sex bias in the workplace also prohibits discrimination against gay employees.
As a result, employers across the country should be “on notice” that Title VII of the 1964 Civil Rights Act is increasingly being interpreted more expansively than it had been just a few short years ago. That’s according to Michael Marra, co-managing partner of Fisher Phillips’ New York office.
For those unfamiliar with the details of the case, here’s a brief recap:
Donald Zarda, a sky-diving instructor for New York-based Altitude Express in 2010, was fired for violating company policy after a client claimed that Zarda inappropriately touched her during the course of a tandem skydive. (The aggrieved client also said Zarda only disclosed his sexual orientation to excuse his behavior.) Zarda, however, believed his termination was motivated by his sexual orientation and brought suit against his former employer, including a claim for gender discrimination under Title VII in his lawsuit.
After several years of litigation, the trial court dismissed Zarda’s Title VII claim in 2014 because there existed scant precedent to support his claims. But soon after that ruling, the legal landscape began to shift and in June 2015, the Supreme Court decided that same-sex marriage should be legal across the country. A month later, the Equal Employment Opportunity Commission ruled that an allegation of discrimination based on sexual orientation is necessarily an allegation of sex discrimination under Title VII (Baldwin v. Foxx). Encouraged by these developments, Zarda appealed his case to the 2nd Circuit Court of Appeals.
In April 2017, the 7th Circuit Court of Appeals (hearing federal cases from Illinois, Indiana and Wisconsin) became the first federal court of appeals in the nation to rule that sexual-orientation claims are actionable under Title VII. But just days later, the 2nd Circuit Court of Appeals ruled that it would not reverse prior circuit precedent and rule in his favor, instead inviting the full collection of appellate judges to re-hear the case en banc (which means the full panel of 2nd Circuit judges would hear the case together). After another year of litigation, the en banc panel issued its decision, ruling in Zarda’s favor by a 10-3 margin.
The full panel concluded that sexual orientation is motivated, at least in part, by sex, and is therefore a subset of sex discrimination, Marra says. And because Title VII explicitly outlaws sex discrimination, it naturally follows that sexual-orientation discrimination should be outlawed under the statute.
The 2nd Circuit’s ruling went against a court brief filed by the Trump administration in 2017 that said Title VII of the Civil Rights Act of 1964 was not intended to provide protections to gay workers. Meanwhile, Zarda’s estate (he died in a 2015 skydiving accident) was backed in the appeal by dozens of large companies, including Alphabet Inc.’s Google, Microsoft Corp., CBS Corp. and Viacom Inc., according to a Reuters report.
Altitude Express said it had not yet decided whether it would ask the Supreme Court to review the decision.
So how should HR leaders interpret the ruling going forward?
Marra says that many HR leaders should already be aware if their state and local laws protect employees and job applicants on the basis of sexual orientation.
“Moreover,” he says, “regardless of jurisdictional legal protections, to the extent an employer’s policy already specifies that the employer does not discriminate on the basis of sexual orientation, HR departments should have already implemented practices, procedures and hopefully training to ensure that the employer’s anti-discrimination/anti-harassment policies are applied as written.”
While Marra says it’s impossible to predict whether the Supreme Court will eventually hear the case, and if so, how it might decide the question, HR professionals should be “extremely careful about how to implement company policies.”
Even in circumstances where sexual-orientation discrimination is not explicitly prohibited by law or company policy, sex discrimination is most certainly prohibited, Marra says.
“In the event that an employer in these circumstances is likely to take an adverse employment action (decide to not hire an applicant; deny a promotion, raise or bonus; discipline an employee, up to termination), the employer should prepare to make the documented business case for the decision if that decision was not based on the person’s sexual orientation.”
At a minimum, Marra says, that includes communication and documentation about the non-discriminatory reasons for the decision and the application of the employer’s performance-management processes.
“If an HR leader seeks to walk the line between discrimination based on an employee’s sexual orientation as opposed to the employee’s sex,” he says, “we recommend engaging the company’s in-house or external counsel as early as possible in any decision-making and communication process that is likely to lead to an adverse employment action to identify key fact issues and limit the company’s potential legal exposure.”