7th Circuit Becomes First Appellate Court to Find Title VII Protects Against Discrimination Based on Sexual Orientation

Consumer Finance   |   Labor & Employment   |   Real Estate   |   Securities and Derivative Litigation   |   Technology   |   Telecommunications   |   April 5, 2017
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On Tuesday, April 4, 2017, an en banc 7th Circuit became the first federal appellate court to find that prohibited sex discrimination under Title VII of the Civil Rights Act of 1964 (“Title VII”) includes discrimination on the basis of sexual orientation. Hively v. Ivy Tech Community College, Case No. 15-270 (April 4, 2017). Yesterday’s decision splits from contrary findings in almost every circuit court of appeal, including a recent panel decision in the 11th Circuit finding that the court was bound by prior precedent that sexual orientation discrimination is not protected by Title VII. Evans v. Georgia Reg’l Hosp., No. 15-15234, 2017 WL 943925, at *5-6 (11th Cir. Mar. 10, 2017). The Hively decision now creates a circuit court split necessary to tee the issue up for the U.S. Supreme Court. 

Kimberly Hively was a part-time adjunct professor at a community college for several years but was denied six full-time positions over a five-year period. When her part-time contract was finally not renewed, she sued, alleging that the decisions were motivated purely by the fact that she is a lesbian. The trial court granted Ivy Tech’s motion to dismiss, finding that Title VII did not protect claims of sexual orientation discrimination.

In late July, a 7th Circuit panel (Judges Bauer, Ripple, and Rovner) upheld the dismissal, explaining that it was bound by 7th Circuit precedent holding that sexual orientation was not protected. Although sympathetic to Ms. Hively’s plight, without U.S. Supreme Court or Congressional action, the panel wrote that it was compelled to find that sexual orientation was not recognized as a protected status under Title VII. 830 F.3d 698 (2016). 

On October 11, 2016, however, the 7th Circuit withdrew the opinion and granted Ms. Hively’s motion for rehearing en banc before the entire court (2016 WL 6768628, Oct. 11, 2016). Oral arguments took place on November 30. In an 8-3 decision authored by Chief Judge Diane Wood on April 4, 2017, the court reversed the trial court decision dismissing Ms. Hively’s complaint. In essence, the majority found that discrimination on the basis of sexual orientation is “a subset of actions taken on the basis of sex.” The court agreed with Hively’s arguments that Ivy Tech would not have treated her adversely if she were a man in a relationship with a woman (comparative discrimination, including concepts of gender non-conformity) and that prohibited sex discrimination also includes discrimination on the basis of her right to associate intimately with a person of the same sex (associational discrimination). 

Judge Sykes’ dissent was critical of the majority and concurring opinions’ apparent stray from statutory construction principles, chiding the majority for circumventing the legislative process in favor of what Judge Sykes viewed as a judicially created amendment to Title VII. Focusing more on originalism principles, the dissent felt bound to analyze Title VII’s definition of “sex” at the time of its enactment, not in contemporary terms. Therefore, Judge Sykes found that classifying individuals on the basis of sexual orientation is different from classifying individuals by sex because sexual orientation discrimination does not draw the male/female distinctions required by Title VII, especially where homosexual versus heterosexual distinctions were not contemplated by the drafters at the time of Title VII’s enactment.

Unless and until the Supreme Court takes up the challenge of resolving the conflict, whether sexual orientation is a protected status under Title VII depends on the jurisdiction where your company conducts business. Regardless of the status of the law, many employers already have policies in place that prohibit discrimination on the basis of sexual orientation, and there would be no reason to alter those policies now. But the Hively decision is a game-changer in the Title VII arena, and how the decision will impact other courts remains to be seen.

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