7th Circuit: Title VII Prohibits Sexual Orientation Discrimination

June 8, 2017

Title VII of the Civil Rights Act of 1964 is a federal law that prohibits employers with 15 or more workers from discriminating against employees and job applicants on the basis of race, color, religion, sex, or national origin. Before April 4, 2017, no federal court of appeals in the country had interpreted “sex,” as it’s used in Title VII, to include sexual orientation; in fact, most courts have rejected such an interpretation. In the recent case of Hively v. Ivy Tech Community College of Indiana, all 11 judges on the U.S. 7th Circuit Court of Appeals (whose rulings apply to employers in Wisconsin, Illinois, and Indiana) considered the issue.

In previous decisions, the 7th Circuit had rejected the argument that sexual orientation is covered by Title VII. In Hively, eight of the 11 judges overruled the court’s past precedent. However, even those eight judges didn’t agree on the particular reason to conclude that sexual orientation should be covered by Title VII, resulting in three separate opinions.

Background

Kimberly Hively, who is openly lesbian, was a part-time adjunct professor at an Indiana community college. She applied for at least six full-time positions over a five-year period but wasn’t hired for any of them. In July 2014, her part-time contract with the community college wasn’t renewed. She then filed a discrimination charge with the Equal Employment Opportunity Commission (EEOC) claiming she wasn’t hired for a full-time position and her contract wasn’t renewed because of her sexual orientation.

After receiving a right-to-sue letter from the EEOC, which allowed her to proceed with her case in court, Hively filed a lawsuit in federal court in Indiana alleging a violation of her rights under Title VII. In particular, she argued that the community college had unlawfully discriminated against her because of her sexual orientation. The community college asked the trial court to dismiss her case, arguing that 7th Circuit law was clear that sexual orientation discrimination isn’t covered by Title VII. The trial court agreed and dismissed Hively’s case.

About-face in the Court of Appeals

Hively appealed the dismissal of her case to the 7th Circuit. A panel of three judges, who were bound by prior 7th Circuit decisions, affirmed the dismissal of her case. She then petitioned to have all 11 judges of the 7th Circuit consider her appeal, which they agreed to do.

The majority of the full court decided to reverse the dismissal of Hively’s claims and sent her case back to the trial court for further proceedings. In doing so, the 7th Circuit overruled its past decisions and found, for the first time, that sexual orientation is included within Title VII’s prohibition against discrimination based on sex. The 7th Circuit is the first appellate court in the country to issue such a ruling.

In reversing the court’s position on whether sexual orientation is covered by Title VII, the majority looked at several U.S. Supreme Court rulings during the past two decades that suggest the high court is moving in this direction. For example, the Supreme Court has concluded that same-sex sexual harassment is actionable under Title VII. The Court has also ruled that certain sexual-stereotyping claims can be pursued as a violation of Title VII.

The 7th Circuit’s 69-page opinion is a treasure trove for law school students and lawyers. The decision is a window into the various approaches that judges can, and do, take when they’re confronted with interpreting the meaning of a law’s language. Additionally, the decision provides a helpful discussion for employment lawyers about how to pick the appropriate comparator— the person to be compared with the employee who’s alleging discrimination.

What Impact Will the Ruling Have?

The Hively decision has potentially significant ramifications for both employers and employees in the 7th Circuit. The court’s ruling removes any question that sexual orientation, and likely gender nonconformity, will be protected classes under Title VII’s prohibition on discrimination based on “sex.” That means a person cannot be discriminated against because of her sexual orientation in any aspect of employment, from recruitment to discharge, cannot be harassed based on her sexual orientation, and cannot be retaliated against because she complains about discrimination or harassment based on her sexual orientation.

Wisconsin already has a law prohibiting employment discrimination based on sexual orientation. However, the remedies available to employees or job applicants under Wisconsin’s Fair Employment Act (WFEA) are more limited than the remedies available under Title VII. For example, under Title VII, an employee or a job applicant can recover compensatory damages for emotional distress or humiliation resulting from the discrimination or harassment. Punitive damages are also available under Title VII. Both compensatory and punitive damages under Title VII are subject to limits based on the size of the employer. Under the WFEA, neither compensatory nor punitive damages are available to an employee or a job applicant who proves unlawful discrimination or harassment.

What May Happen Next?

It’s likely that the U.S. Supreme Court will be asked in the not-too-distant future to review whether sexual orientation is covered by Title VII. I would expect that the Court will have an interest in reviewing the issue and providing guidance to employers, employees, and lower courts considering such cases.

This article, slightly modified to note recent updates, was featured in the May 2017 issue of the Wisconsin Employment Law Letter, which is co-edited by Axley Brynelson Attorneys Saul Glazer and Michael Modl and published by BLR®—Business & Legal Resources. Reproduced here with the permission of BLR®—Business & Legal Resources.

For more information about "7th Circuit: Title VII Prohibits Sexual Orientation Discrimination," contact Michael J. Modl at mmodl@axley.com or 608.283.6702.