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Second Circuit Becomes Second Court to Find Title VII Prohibits Sexual Orientation Discrimination

Labor & Employment Alert Matthew A. Sloan, Otto W. Immel

The Decision

On February 26, 2018, the Second Circuit Court of Appeals became the second court to conclude that Title VII prohibits employment discrimination on the basis of sexual orientation. This comes less than a year after the Seventh Circuit’s groundbreaking decision holding the same in Hively v. Ivy Tech Community College of Indiana. For more information about the Hively decision, please see our prior client alert.

The Second Circuit’s decision came after an en banc review of a lower court’s decision granting summary judgment to an employer on a former employee’s Title VII claim that he was fired after revealing his sexual orientation to a client. Despite the absence of sexual orientation among the categories of protected classes under Title VII, the Second Circuit concluded earlier this week “that sexual orientation is a function of sex and, by extension, sexual orientation discrimination is a subset of sex discrimination.” Zarda v. Altitude Express, No. 15-3775 (2nd Cir. Feb. 26, 2018).

The Immediate Impact

Employers located within the Second Circuit­—those in Connecticut, New York, and Vermont—are now bound by the Zarda decision holding that Title VII prohibits employment discrimination based on sexual orientation. All three states have statutes already protecting employees from discrimination on the basis of sexual orientation, however, and so while affording those employees concurrent federal protection, the practical impact will be limited.

What is more immediate is the validation of the U.S. Equal Employment Opportunity Commission's position on the issue. Since its own non-binding ruling in Baldwin v. Foxx in 2015, the EEOC has steadfastly taken the position that sexual orientation is covered under Title VII’s prohibition of sex discrimination. The Zarda opinion is the second time in the last year that an appellate court has adopted the agency's position.

What’s Next

While the U.S. Supreme Court declined to take up the same question posed by Zarda and Hively in a case out of the Eleventh Circuit in December 2017—in which a three-judge panel held that Title VII of the Civil Rights Act of 1964 did not protect employees from discrimination on the basis of sexual orientation—the Zarda decision could present another opportunity for the high court to rule on the issue and resolve the burgeoning circuit split.

That the EEOC, on behalf of the employee, and the U.S. Department of Justice, on behalf of the employer, filed amicus briefs on opposite sides of the matter also foreshadows continued divergence between the Trump Administration and the agency most responsible for enforcing civil rights in the American workplace. It is the Department of Justice and Trump Administration's position that the Civil Rights Act of 1964, as originally envisioned, did not contemplate protections based on sexual orientation.

Nevertheless, plaintiffs across the country will rely on the Zarda and Hively opinions in support of any contention that they suffered unlawful adverse employment actions because of their sexual orientation. Employers should remain diligent in training their managers, supervisors, and human resources representatives on the prohibited bases for employment decisions (a list which, in both the Second and Seventh Circuits, now definitively includes sexual orientation).