In the Workplace 2018: LGBT Employee Rights

This is part of a series of articles by Wright Lindsey Jennings’ labor and employment team examining key trends for employers and the workplace in 2018. The series was featured in Arkansas Business. 

This year brought significant developments in laws that affect LGBT employees but, for the most part, the developments have raised more questions than they’ve answered.

In February, the Arkansas Supreme Court overturned a Fayetteville city ordinance broadening nondiscrimination protections to include sexual orientation and gender identity. The court ruled that the ordinance was invalid under a state statute that prohibits cities from adopting or enforcing ordinances prohibiting discrimination beyond types of discrimination already barred by state law. But the court did not decide whether the state law prohibiting local LGBT protections is constitutional.

The law that has been the cause of most uncertainty in regards to LGBT employee rights is Title VII of the Civil Rights Act of 1964. Title VII does not specifically mention sexual orientation or gender identity, and courts have been asked to decide whether the law’s ban on gender discrimination should be interpreted to include a ban on sexual orientation and gender identity discrimination.

In Terry v. Enterprise Holdings, a federal judge in Little Rock ruled that the plaintiff was not protected by Title VII for claims that she was discriminated against because she was a lesbian. Terry appealed the decision to the Eighth Circuit, with the Equal Employment Opportunity filing an amicus brief disagreeing with the lower court’s decision. Before the Eighth Circuit could make a ruling, the parties agreed to dismiss the suit in a settlement.

The same issue that was raised in Terry is working its way through other appellate courts.

In April, the Seventh Circuit Court of Appeals ruled that discrimination on the basis of sexual orientation is a form of sex discrimination under Title VII. On the other hand, the Eleventh Circuit Court of Appeals ruled in March that a security guard was not protected by Title VII after claiming she was targeted for harassment and effectively terminated from her hospital job for being a lesbian.

That case is currently before the U.S. Supreme Court on a writ of certiorari, and we await a decision on whether the court will hear the case. The Seventh and Eleventh Circuit’s disagreement about whether Title VII prohibits discrimination based on sexual orientation creates a circuit split that can only be resolved by the Supreme Court.

Among those anxious to see whether the Supreme Court will take up the issue is diverse group of businesses. Seventy-six businesses — including Apple, Facebook, Google, Uber, Microsoft and Starbucks — signed off on an amicus brief, urging the Supreme Court to review the Eleventh Circuit case and find that Title VII prohibits sexual orientation and gender identity discrimination.

The amicus brief observed that the current circuit split “has wide-ranging, negative consequences for businesses, their employees, and the U.S. economy.” A notable quote from the amicus brief:

 “Laws are perhaps the strongest of social structures that uphold and enforce stigma, and excluding a class of persons from legal protections sends a strong message in the workplace. Excluding sexual orientation from sex discrimination protections has a stigmatizing effect on LGBT employees, resulting in negative consequences for employee health and productivity.”

Consistent with this position, 89 percent of Fortune 100 companies have policies that include sexual orientation, and 66 percent of them have non-discrimination policies that include gender identity and expression, according to the Human Rights Campaign.

Federal Agencies in Conflict

In an unusual development this year, two federal agencies are now at odds over whether Title VII protects LGBT workers. Speaking for the Department of Justice, Attorney General Jeff Sessions sent a letter to all U.S. attorneys and the heads of all federal agencies stating that Title VII “does not prohibit discrimination based on gender identity per se, including transgender status.”

The DOJ’s new stance is contrary to the position of the EEOC, another executive agency. According to the EEOC’s most recent Strategic Enforcement Plan, anti-discrimination protection for LGBT employees continues to be an EEOC enforcement priority through 2021. Therefore, notwithstanding the DOJ’s position, the EEOC continues to file Title VII cases against employers alleged to have discriminated on the basis of sexual orientation and gender identity.

In November, an Oklahoma jury awarded more than $1 million to a professor who alleged she was denied tenure after announcing that she was transitioning from male to female and then retaliated against for complaining of discrimination.

The case was initially filed by the DOJ under the Obama administration, but the DOJ withdrew before trial due to the agency’s shifting position on the applicability of Title VII to claims of transgender discrimination. Interestingly, the trial judge in Oklahoma had previously found that the professor’s claim could proceed as a claim for gender discrimination because she alleged she suffered discrimination based on gender-nonconformity. The Eight Circuit Court of Appeals has also recognized such “sex stereotyping” claims as actionable under Title VII, so a case like the Oklahoma case could proceed in Arkansas even under current law.

With all these conflicting decisions and positions, we expect to see significant decisions affecting LGBT employee rights over the next few years.