Mixed signals from federal courts and agencies regarding Title VII’s potential application to cases of discrimination based on sexual orientation and gender identity continue to perplex employers. On September 26, 2017, a Second Circuit panel heard opposing positions from two different federal agencies concerning the exact same provision of Title VII. Then, on October 4, the Department of Justice (DOJ) issued a written opinion regarding Title VII that again conflicts with the guidance given by another federal agency. In light of the lack of clarity as to federal law, employers are left to assess every jurisdiction in which they operate and compare state, federal, and municipal law.
Title VII prevents employers from discriminating against employees on the basis of sex, amongst other categories. While 32 states currently prohibit discrimination against employees on the basis of their sexual orientation (although some prohibit discrimination only in public employment), Title VII does not expressly prohibit discrimination on the basis of sexual orientation. Courts are currently split as to whether discrimination on the basis of sexual orientation is covered by the prohibition on sex-based discrimination.
The Equal Employment Opportunity Commission (EEOC) in July 2015 adopted the position that Title VII prohibited discrimination on the basis of sexual orientation. Notably, the DOJ never challenged the EEOC’s position in those or subsequent cases — until now. On July 26, 2017, the DOJ, in a remarkable shift, filed an amicus brief in Zarda v. Altitude Express, arguing that “The sole question here is whether, as a matter of law, Title VII reaches sexual orientation discrimination. It does not, as has been settled for decades. Any efforts to amend Title VII’s scope should be directed to Congress rather than the courts.”
On September 26, 2017, the EEOC and the DOJ both appeared before a 13-member panel of the Second Circuit to argue contradictory positions. The EEOC argued, as it has been arguing for years, that Title VII covers sexual orientation, and the DOJ argued that it does not. The strange circumstances were not lost on the court. Judge Rosemary Pooler noted, “It’s a little awkward for us to have the federal government on both sides of this case.”
While it might have been “awkward” for the court, it leaves employers with a lack of clarity. When the Court of Appeals issues a decision in Zarda, it will likely provide clarity for businesses in the Second Circuit. However, employers outside the Second Circuit will have to continually examine state and municipal statutory authority and case law to ensure compliance.
Similar to sexual orientation, the federal government’s position as to discrimination on the basis of gender identity has continued to evolve. In 2012, the EEOC ruled that discrimination on the basis of gender identity is discrimination on the basis of sex. On December 15 2014, the DOJ issued a memorandum stating, “After considering the text of Title VII, the relevant Supreme Court case law interpreting the statute, and the developing jurisprudence in this area,…the best reading of Title VII’s prohibition of sex discrimination is that it encompasses discrimination based on gender identity, including transgender status….For these reasons, the Department will no longer assert that Title VII’s prohibition against discrimination based on sex does not encompass gender identity per se (including transgender discrimination).”
The DOJ issued a “revised” memorandum on October 4, 2017, which contradicts and changes its previous position in the December 15, 2014 memorandum. The October 4, 2017, “revised” memorandum states, “Title VII’s prohibition on sex discrimination encompasses discrimination between men and women but does not encompass discrimination based on gender identity per se, including transgender status. Therefore, as of the date of this memorandum, which hereby withdraws the December 15, 2014, memorandum, the Department of Justice will take that position in all pending and future matters…”
This policy change, again, puts one federal agency squarely in opposition to another. With conflicting guidance from the federal government, employers are left to choose which federal agency to follow in an attempt to avoid potential liability and exposure. This creates an untenable position for employers and their employees.
The federal legal landscape as to sexual orientation and gender identity is in flux. The history of Title VII has been one long conversation between courts, Congress, and federal agencies interpreting its provisions. Employers can take comfort in knowing this uncertainty too shall pass. In the meantime, it would be prudent to refrain from drastic policy changes on these issues, since more court challenges are likely. Therefore, employers should not rely on the recent changes at the federal level when making or enforcing workplace policies.
In addition, current state and municipal laws may conflict with the federal government’s current position. Therefore, employers are well served to continue to provide a working environment free of discrimination based upon sexual orientation or gender identity. Many states and municipalities explicitly prohibit discrimination on the basis of sexual orientation and/or gender identity. Thus, regardless of the interpretation of federal law, employers should be careful to comply with their own state and local laws.
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