On June 15, 2020, the United States Supreme Court issued a landmark opinion in Bostock v. Clayton County Georgia (“Bostock”) which raised the question of whether an employer could fire an employee for being gay or transgender without violating Title VII of the Civil Rights Act of 1964 (“Title VII”). In a 6-3 opinion delivered by Justice Gorsuch, 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.”
Title VII makes it unlawful “for an employer to fail or refuse to hire or discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s race, color, religion, sex, or national origin.” Over the years, courts across the country have been unable to consistently interpret the prohibition on discrimination “because of … sex” as it relates to protecting employees from discrimination based on their sexual orientation or transgender status. Adding to the complexity, the Equal Employment Opportunity Commission began to interpret “sex” to include LGBTQ employees in its guidance. However not all courts nor the U.S. Department of Justice agreed with the EEOC interpretation.
In April of 2019, the Supreme Court agreed to hear cases to resolve the circuit split among the courts and to decide whether Title VII’s prohibition of discrimination on the basis of sex also encompasses discrimination on the basis of sexual orientation and gender identity. The issue was presented in three consolidated cases in which an employer terminated an employee because of their sexual orientation or gender identity:
- Bostock v. Clayton County Georgia – involved a termination of a county employee after community members discovered his participation in a gay softball league.
- Altitude Express v. Zarda – involved the termination of a skydiving instructor after he told a client he was gay.
- R.G. & G.R. Harris Funeral Homes, Inc v. EEOC – involved the termination of an employee that presented as male when initially hired as a funeral director. After six years with the employer, she explained to her employer that she planned to “live and work full-time as a woman.”
In its decision, the Supreme Court interpreted the plain meaning of Title VII, by essentially holding that there was no other way to apply the phrase “because of … sex” except to hold that discrimination on the basis of sexual orientation or gender identity/transgender status are discrimination “because of … sex.” As concluded by Justice Gorsuch, “it is impossible to discriminate against a person for being homosexual or transgender without discriminating against that individual based on sex.”
What does this Decision mean for Employers?
It has now been explicitly made clear that employers across the country are prohibited from terminating an employee because they are gay or transgender. While many states already have laws prohibiting discrimination on the basis of sexual orientation and gender identity (such as California, Oregon, Washington and New York), the Supreme Court’s decision will immediately impact additional states where discrimination on this basis is not already prohibited by state law. All employers should review and revise their existing policies and training materials, and ensure relevant personnel are trained in light of the Bostock ruling.
Section 1557 Final Rules
On June 12, 2020, just three days before the Supreme Court’s ruling in this case, the United States Department of Health and Human Services (“HHS”) released final rules under Section 1557 of the Affordable Care Act (“ACA”), which among other things, eliminated the prior administration’s definition of “on the basis of sex” to include pregnancy, sex stereotyping, and gender identity.
Section 1557 is the primary anti-discrimination provision of the ACA, which prohibits discrimination on the basis of race, color, national origin, sex, age, or disability for certain health programs and activities. While the Supreme Court decision in Bostock does not directly address the HHS final rules, the case does provide a compelling route to challenge HHS’ interpretation that “sex” does not include gender identity or sexual orientation for purposes of the ACA’s non-discrimination provisions. For more information about the final regulations, please visit our blog post.
- Employers in states that do not have state or local laws prohibiting discrimination based on sexual orientation and gender identity in the workplace must review their employer practices, handbooks and policies;
- Workplaces where issues related to gender identity and expression are not familiar should consider providing additional training and education to their entire workforce;
- Review benefits policies to ensure they provide coverage equally, regardless of gender identity or sexual orientation.
Disclaimer: This content is intended for informational purposes only and should not be construed as legal, medical or tax advice. It provides general information and is not intended to encompass all compliance and legal obligations that may be applicable. This information and any questions as to your specific circumstances should be reviewed with your respective legal counsel and/or tax advisor as we do not provide legal or tax advice. Please note that this information may be subject to change based on legislative changes. © 2020 Sequoia Benefits & Insurance Services, LLC. All Rights Reserved