7th Circuit Rules Against Complaint of Discrimination Based on Sexual Orientation

The case is Hively v. Ivy Tech Community College decided on July 28, 2016.  The facts of the case are that Kimberly Hively was hired by the college as a part-time adjunct professor in 2000.  Subsequently, she applied for six different full time positions for which she felt qualified, and was never even interviewed.  Hively filed a Title VII lawsuit in which she claimed she was not hired because of her sexual orientation.  The college argued that Title VII offers no remedy for discrimination based on sexual orientation.  The District Court for the Northern District of Indiana agreed with the college and rendered a summary judgment ruling in the college’s favor, a ruling upheld by a three judge panel of the 7th Circuit.

In a relatively expansive ruling, Judge Rovner, speaking for the other two judges, provided two reasons for its ruling. First, there have been several unsuccessful attempts in congress to amend the Tile VII protected classes.  Second, there is long-standing history in the courts, both in the 7th Circuit and other courts, that discrimination has to be because of sex, and discrimination based on sexual orientation is not discrimination based on sex.

This ruling comes as a body blow to the EEOC, which has taken a strong position that discrimination based on sexual preference is discrimination based on sex, a principle discussed in several recent alerts.

In an Alert posted on January 25, 2016, this author reviewed Chavez v. Credit Nation Auto Sales, decided by the 11th Circuit on January 14, 2016 [2016 U.S. App. LEXIS 598] in which the court found the claim of termination of a transgender employee is triable under Title VII.  Also cited in that Alert was an 11th Circuit review of a district court ruling in Glenn v. Bumbry (201) [663 F.3d 1312], a 14th Amendment Equal Protection case.  In the words of the 11th Circuit in Glen, the court ruled:

The employer testified at his deposition that he fired the employee because he considered it inappropriate for her to appear at work dressed as a woman and that he found it unsettling and unnatural that the employee would appear wearing women’s clothing. The employer admitted that his decision to fire the employee was based on the sheer fact of the transition. The employer’s testimony provided ample direct evidence to support the district court’s conclusion that the employer acted on the basis of the employee’s gender non-conformity. The employer advanced no reason that could qualify as a governmental purpose, much less an important governmental purpose, and even less than that, a sufficiently important governmental purpose was achieved by firing the employee because of her gender non-conformity.

 There was an important caveat in the Glenn case, namely that it was a Section 1983 claim against a state agency, and the conclusion (failure to serve an important government purpose) is different from a Title VII case against a private entity.

This was followed by an Alert on February 2, 2016 in which the EEOC extracted $115,000 from Deluxe Financial Services and $150,000 settlement with Lakeland Eye Clinic.  Additionally, the EEOC sued a funeral home and joined a suit against a financial institution.  All of the cases involved the claim of transgender discrimination, and the EEOC’s argument was that the discrimination was based on gender stereotypes.

Other Alerts have been written on the topic and the interested reader should check them out. One of my points is that it might be easier to tackle transgender discrimination than other forms of sexual orientation on the basis of the new gender is the person’s actual sex.  However, absent evidence, this is merely speculation on my part.  The 7th Circuit ruling in the present case does not distinguish between transgender and other forms of sexual orientation, and it does not distinguish among types of claims (hiring, promotion, termination, or harassment).

In the words of the 7th Circuit, it could have ended the discussion on sexual orientation after the ruling itself, but

[w]e would be remiss not to consider the EEOC's recent decision in which it concluded that "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."

The 7th Circuit provided three arguments against the EEOC’s position.  The most potent one being rejection of the EEOC’s position that sexual orientation is based on gender stereotypes, thus allowing employees to be harassed and punished based on failure to live up to societal normal.  The EEOC’s position is that courts have attempted to make this distinction, an assertion the 7th Circuit disagrees with.

To be sure, the manner in which sexual orientation is treated in the workplace is a live issue.  States and municipalities have already issued laws prohibiting such discrimination, and the OFCCP has recently finalized regulations tied to President Obama’s executive order prohibiting such discrimination among contractors.  We will continue to follow developments in this area.

By Art Gutman, Ph.D., Professor, Florida Institute of Technology

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