By Gerald L. Maatman, Jr., Matthew J. Gagnon, and Alex W. Karasik

Seyfarth Synopsis:  In a landmark decision for gay and transgender employees, the U.S. Supreme Court held in Bostock v. Clayton County, Georgia, No. 17-1618, 2020 U.S. LEXIS 3252 (June 15, 2020), that Title VII prohibits discrimination against gay or transgender employees as a form of sex discrimination. Although Title VII does not explicitly prohibit discrimination based on sexuality or gender identity, the 6-3 decision authored by Justice Gorsuch represents a victory for the EEOC as it has been championing this theory in the federal courts for years. Employers should expect the EEOC will be increasingly vigilant in terms of enforcing this new federal workplace protection for the foreseeable future.

Case Backgrounds

The Supreme Court’s ruling decided three cases that raise similar issues – Altitude Express v. Zarda, No. 17-1623; Bostock v. Clayton County, Georgia, No. 17-1618; and R.G. & G.R. Harris Funeral Homes Inc. v. Equal Employment Opportunity Commission et al., No. 18-107.

As we previously discussed here, in Zarda, the plaintiff, was a sky-diving instructor who told a client that he was gay so she would feel more comfortable being strapped to him for a tandem jump. Following the plaintiff’s termination after the client’s boyfriend complained, the plaintiff filed a lawsuit alleging his employment was terminated because of his sexual orientation, which constituted sex stereotyping in violation of Title VII. The district court granted summary judgment dismissing his Title VII claim, and the Second Circuit affirmed, relying on precedent that a sex stereotyping claim cannot be predicated on sexual orientation. The plaintiff successfully petitioned for rehearing en banc. A divided Second Circuit overturned the panel decision and its own circuit precedent, holding that Title VII’s prohibition against discrimination on the basis of sex necessarily prohibits discrimination based on sexual orientation.

The Eleventh Circuit decided a similar case in Bostock, where the plaintiff alleged that he was fired because he is gay, despite having a long history of positive performance. The Eleventh Circuit ultimately reaffirmed that circuit’s precedent holding sexual orientation is not protected by Title VII’s prohibition against discrimination on the basis of sex.

The third case before the Supreme Court was R.G. & G.R. Funeral Homes v. EEOC, which we previously blogged about here. This lawsuit was one of the first cases brought by the EEOC alleging this theory of sex discrimination. After the plaintiff disclosed to her employer in 2013 that she would transition to dressing as a woman and planned to have sex-reassignment surgery, her employer offered her a severance agreement and terminated her. The district court granted summary judgment in favor of the employer, but the Sixth Circuit reversed, holding that gender identity discrimination fell squarely within Title VII’s prohibition against discrimination on the basis of sex and sexual stereotyping.

The Supreme Court’s Decision

The U.S. Supreme Court determined that Title VII of the Civil Rights Act of 1964 prohibits employment discrimination against LGBT individuals in the workplace. The Supreme Court held that “[a]n employer who fires an individual for being homosexual or transgender fires that person for traits or actions it would not have questioned in members of a different sex. Sex plays a necessary and undisguisable role in the decision, exactly what Title VII forbids.” Id. at *2. Further, it noted that although, “[t]hose who adopted the Civil Rights Act might not have anticipated their work would lead to this particular result . . . the limits of the drafters’ imagination supply no reason to ignore the law’s demands.” Id.

After noting that “[f]ew facts are needed to appreciate the legal question we face,” the Supreme Court explained that, “[e]ach of the three cases before us started the same way: An employer fired a long-time employee shortly after the employee revealed that he or she is homosexual or transgender — and allegedly for no reason other than the employee’s homosexuality or transgender status.” Id. at 2. The Supreme Court reasoned that because discrimination on the basis of homosexuality or transgender status requires an employer to intentionally treat individual employees differently because of their sex, an employer who intentionally penalizes an employee for being homosexual or transgender also violates Title VII.

In two lengthy dissenting opinions, Justices Alito, Thomas, and Kavanaugh opined that the majority’s decision was “preposterous,” because, “even as understood today, the concept of discrimination because of ‘sex’ is different from discrimination because of ‘sexual orientation’ or ‘gender identity.’” Dissent at 3. In criticism of the majority’s approach, Justice Alito’s dissent held that its “opinion is like a pirate ship. It sails under a textualist flag, but what it actually represents is a theory of statutory interpretation that [the late] Justice Scalia excoriated –– the theory that courts should ‘update’ old statutes so that they better reflect the current values of society.” Id.

Implications For Employers

This decision is a significant win for the EEOC and a game-changer for employers. The EEOC championed this legal theory for almost ten years, relying on its own quasi-judicial and rule-making powers to set precedent and its considerable enforcement powers to push this theory in the federal courts. The EEOC won many of those cases — but not all of them. Today’s ruling is a final vindication for the EEOC and a powerful testament to the law-shaping powers of a determined federal agency.

This decision will likely garner considerable media attention, and it would not be surprising if this leads to a significant uptick in EEOC charges brought by LGBTQ employees. We would also expect the EEOC will continue actively processing claims by LGBTQ employees as “sex” discrimination claims, with a new SCOTUS ruling in Bostock that supports the agency’s interpretation of Title VII once a claim hits the federal courts. We also foresee more attention in the workplace to LGBTQ employee issues. Now may be a good time for employers to review policies and practices to ensure they are legally sound following the Bostock decision.