On the heels of the landmark decision by the Supreme Court in favor of gay marriage, the EEOC held on July 15, 2015 that sex discrimination under Title VII includes discrimination on the basis of sexual orientation. Even though the decision is not binding precedent in federal court, and runs contrary to a significant body of case law holding that Title VII does not prohibit discrimination on the basis of sexual orientation, it could be regarded by some courts as persuasive authority. The decision could also have an impact on employers in the form of an increased number of administrative charges of discrimination filed with the EEOC based on sexual orientation, as courts determine whether to adopt the EEOC's interpretation.
In Baldwin v. Foxx, a federal sector employee alleged he did not receive a promotion because he was gay, in violation of Title VII's prohibition against sex discrimination. Because this involved a federal employee, the EEOC had appellate jurisdiction to review the federal agency's final decision dismissing the discrimination claim. The EEOC reversed and allowed the employee to move forward with his claim, holding that "[s]exual orientation discrimination is sex discrimination because it necessarily entails treating an employee less favorably because of the employee's sex." In that regard, the EEOC found that sexual orientation discrimination "is premised on sex-based preferences, assumptions, expectations, stereotypes, or norms. 'Sexual orientation' as a concept cannot be defined or understood without reference to sex."
For those reasons, and despite it not being explicitly listed as a protected characteristic in Title VII, the EEOC held that sexual orientation discrimination constitutes sex discrimination under Title VII because "sexual orientation is inherently a 'sex-based consideration,' and an allegation of discrimination based on sexual orientation is necessarily an allegation of sex discrimination under Title VII." According to the EEOC, a "complainant alleging that an agency took his or her sexual orientation into account in an employment action necessarily alleges that the agency took his or her sex into account." The EEOC also held that sexual orientation discrimination is unlawful because it is associational discrimination based on sex, and because it "necessarily involves discrimination based on gender stereotypes."
Because the EEOC's holding purportedly is based on the extension of an existing protected class under Title VII, rather than the creation of a new covered class of individuals, Congressional action is not required to implement this decision. Following this decision, there will likely be an increase in the number of charges of discrimination based on sexual orientation filed with the EEOC. Yet because federal courts are not obligated to abide by the EEOC's interpretation of Title VII, and given the significant federal precedent holding that sexual orientation discrimination is not covered under Title VII, the decision's impact remains to be seen.
Notably, the EEOC is not the first federal agency to prohibit discrimination based on sexual orientation or gender identity. Since April, federal contractors and subcontractors have been prohibited from discriminating based on sexual orientation and gender identity pursuant to a final rule by the Office of Federal Contract Compliance Programs ("OFCCP") implementing President Obama's amendment to Executive Order 11246. For a full discussion on OFCCP's new rule, see our prior blog post.
While seemingly a win for the LGBT community, this decision may only muddy the waters because it has the potential to produce conflicting precedent based upon how individual courts interpret the issue. It also has sparked renewed calls for Congress to pass nondiscrimination legislation that covers sexual orientation and gender identity on a nationwide basis (i.e., the Employment Non-Discrimination Act "ENDA"). We will continue to monitor legislative and agency developments, and advise that employers consider reviewing their anti-discrimination policies in light of these developments.
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