Seventh Circuit Court of Appeals Explicitly Holds that Sexual Orientation Discrimination is Sex Discrimination Prohibited by Title VII

Seventh Circuit Court of Appeals Explicitly Holds that Sexual Orientation Discrimination is Sex Discrimination Prohibited by Title VII

April 4, 2017 will forever be seen as a landmark victory for gay rights advocates, as the United States Court of Appeals for the Seventh Circuit ruled in an 8-3 decision Hively v. Ivy Tech Community College, No. 15-1720 (7th Circuit April 4th, 2017) that sexual orientation discrimination is a form of sex discrimination prohibited by Title VII of the Civil Rights Act of 1964.

Compliance officers, employment attorneys, and human resources professionals (along with civil rights advocates and obviously LGBT employees) have long been seeking clarity on the issue of whether same-sex discrimination is prohibited under Title VII. Indeed, the EEOC has been prosecuting cases under Title VII on behalf of LGBT employees for several years, but neither the United States Supreme Court nor the United States Court of Appeals had explicitly decided the issue until yesterday.


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The key takeaway from this decision is that the Seventh Circuit was very clear in its decision that sexual orientation discrimination is an illegal form of sex discrimination under Title VII. Within that Circuit, all federal courts are bound to follow the Seventh Circuit’s decision in Hively when deciding sexual orientation employment discrimination cases. Conversely, for future United States courts of appeals, there will be no need to draw inferences, as there is now clear persuasive authority from which to draw.

Despite the importance of Hively both within and outside the Seventh Circuit, nationally speaking federal law still cannot be considered settled on this issue, as the United States Supreme Court still has yet to weigh in. Therefore, in federal courts outside Illinois, Indiana, and Wisconsin, the precedential value of Hively still is still persuasive rather than binding.

This means that a United States court of appeals in a more conservative circuit is still free to hold that sexual orientation discrimination does not violate Title VII’s prohibition on sex discrimination until there is a Supreme Court decision either affirming Hively or another similar case where the Supreme Court reaches that decision.

Hively v. Ivy Tech Community College Facts and Procedure

The Plaintiff in Hively was Kimberly Hively, an adjunct professor at Ivy Tech’s campus in South Bend, Indiana who began teaching there in 2000.  After applying unsuccessfully for at least six full-time positions between 2009 and 2014, Hively’s contract was not renewed in the summer of 2014. Subsequently, Hively filed an EEOC charge alleging that she was being blocked from full-time employment due to her sexual orientation. She received a right-to-sue letter from the agency and filed a lawsuit for sex discrimination under Title VII.


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The United States District Court for the Northern District of Indiana granted Ivy Tech’s motion to dismiss (for failure to state a claim of sex discrimination) with prejudice, and Hively appealed to the Seventh Circuit, which issued its opinion in her case late yesterday afternoon.

Seventh Circuit Analysis in Hively

Acknowledging that the United States Supreme Court has never considered the question of sexual orientation discrimination, the Seventh Circuit reversed the district court’s judgment and stated: “We conclude today that discrimination on the basis of sexual orientation is a form of sex discrimination.” The Seventh Circuit opinion relied primarily on the United States Supreme Court decision in Price Waterhouse Coopers v. Hopkins, 490 U.S. 228 (1989) (holding that gender stereotyping falls within Title VII’s prohibition against sex discrimination); and Oncale v. Sundowner Offshore Servs., Inc., 523 U.S. 75 (1998) (holding that same-sex harassment is illegal sex discrimination under Title VII).

In reaching its decision, the Seventh Circuit stated that the United States Supreme Court’s sidestepping the direct issue of whether sexual orientation discrimination is protected sex discrimination led to the Circuit courts (and the district court in this case) concluding that outdated precedent essentially required them to hold that it was settled law that sexual orientation discrimination was not illegal sex discrimination and that while that position was correct absent a direct holding from the Supreme Court or a Federal Court of Appeals the time was right to re-examine the issue.

The Hively Holding

Relying on the Supreme Court’s analysis in Price Waterhouse and Oncale, the court determined although Congress “may not have anticipated a particular application of the law cannot stand in the way of the provisions of the law that are on the books.” Therefore, the court found it impossible to extract sex stereotyping and same-sex harassment without also applying the same logic to sexual orientation discrimination just because the full scope of the term “sex” as a protected class was not necessarily contemplated by Congress when it drafted Title VII in 1964.


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The court closed its analysis with the following [very explicit] language: “We hold only that a person who alleges that she experienced employment discrimination on the basis of her sexual orientation has put forth a case of sex discrimination for Title VII purposes.”

What Does the Seventh Circuit’s Decision in Hively Mean for Your Business?

If your company is subject to Title VII and is located in Illinois, Indiana, or Wisconsin it is now illegal under federal law to make employment decisions on the basis of their sexual orientation.  Sexual orientation discrimination was already illegal for all employees under the state laws of Illinois and Wisconsin and for state employees in Indiana, so legally speaking, not much changes today outside Indiana. 

That said, the majority of employment discrimination charges are filed under Title VII in the Seventh Circuit (rather than state charges) because it is procedurally easier for a Plaintiff to get into federal court in all three of those states than to go the state route. Now that the Seventh Circuit has made clear that sexual orientation discrimination is illegal in that Circuit it is very likely we will see a larger number of discrimination cases grounded in employment discrimination on the basis of sexual orientation.

For the rest of the country, Hively is certainly something to be aware of, and the case makes it clear that the tide has turned toward nationwide illegality of sexual orientation discrimination. Your company should already have a policy prohibiting sexual orientation discrimination regardless of its legal status in 2017 just for ethics purposes, and also should be training employees on the negative impact that any sort of employment discrimination can have. But on a more macro level the Hively decision on April 4, 2017, marks an enormous victory for LGBT rights advocates across the nation, as it is going to be extremely persuasive to circuit courts across the country. Likewise, this will likely be the impetus for the Supreme Court to rule on the issue, almost certainly in favor of LGBT employees.


 

Is your organization ready for the potential changes in employment law based on this case?  Contact us about your current compliance training program and we can work with you to make recommendations to augment and/or improve your current offering.

 

Syntrio is a leader in both the ethics and compliance field, as well as human resources and employment law, and is prepared to help your company implement a compliance program aimed at reducing the potential impact of compliance violations within the organization. Syntrio takes an innovative philosophy towards compliance program design and strives to engineer engaging, entertaining, and thought-provoking content. Contact www.syntrio.com for more information about our ethics and code of conduct online courses and remember to follow us on Facebook, TwitterGoogle Plus and LinkedIn for daily updates on employment law and compliance that impact your company!

 

Written by Jon Gonzalez, Esq., Syntrio Advisory Board Member.

Posted in Code of Conduct, Compliance Training, Managing Within the Law, Sexual Harassment and tagged , , , , , , , , , , , , , .