Title VII of the federal Civil Rights Act of 1964 makes it unlawful for an employer “to discriminate against any individual … because of” that individual’s “race, color, religion, sex , or national origin.” In a landmark decision, the United States Supreme Court has ruled that the term “sex” in Title VII also precludes discrimination against employees solely because they are gay or transgender.

Before the High Court’s ruling in Bostock v. Clayton County , fewer than half of the 50 states—including California—already had laws protecting employees against discrimination based on their sexual orientation or gender identity. The Bostock decision outlaws discrimination against gay and transgender employees by all United States employers with 15 or more employees who are covered by Title VII.

Justice Neil Gorsuch wrote the decision for a 6-3 majority of the Supreme Court. His opinion recognized that those who drafted Title VII in 1964 “might not have anticipated their work would lead to this particular result.” But the Court noted that it previously had ruled that “sex” discrimination extends to discrimination based on “motherhood” and to male-on-male sexual harassment. The justices used similar logic to apply Title VII to gay and transgender employees.

As the High Court explained, an employer “violates Title VII when it intentionally fires an individual employee based in part on sex”—even if other factors contributed to the decision, and even if the employer treated men and women the same as “groups.” The Court stated it is no defense for an employer to discriminate “against both men and women because of sex.” For example, “an employer who fires a woman, Hannah, because she is insufficiently feminine and also fires a man, Bob, for being insufficiently masculine” has terminated both individuals “in part because of sex. Instead of avoiding Title VII exposure, this employer doubles it.”

Under the law, an employee’s sex must be irrelevant to selection, evaluation, or compensation. The Court similarly reasoned that an individual’s “homosexuality or transgender status” must be irrelevant to employment decisions, “because it is impossible to discriminate against a person for being homosexual or transgender without discriminating against that individual based on sex.”

As an example, the Court discussed two otherwise-identical employees, “both of whom are attracted to men,” but “one is a man and the other a woman.” If the employer fires the man only because he is attracted to men, it is discriminating against him “for traits or actions it tolerates in his female colleague.” In this situation, the male employee is fired “based in part” on his sex, and his sex “is a but-for cause of his discharge.”

To illustrate discrimination against transgender employees, the Court discussed two otherwise-identical individuals, both of whom identify as female, but only one of whom “was identified as a male at birth.” If the employer fires the transgender employee only because she identified as male at birth, it is discriminating against her “for traits or actions that it tolerates in an employee identified as female at birth. Again, the individual employee’s sex plays an unmistakable and impermissible role in the discharge decision.”

Central to the Court’s ruling is the principle that both “homosexuality and transgender status are inextricably bound up with sex.” As the Court acknowledged, this does not mean that sexual orientation or gender identity are the same thing as sex. But it does mean that discrimination based on sexual orientation or gender identity “requires an employer to intentionally treat individual employees differently because of their sex.”

The Court’s Bostock decision applied to three different lawsuits. In one, a county employee in Georgia was terminated for “unbecoming” conduct after it became known that he participated in a gay recreational softball league. In another, a skydiving instructor in New York was terminated one day after mentioning to a customer that he was gay. The third case involved a funeral home employee who originally presented as a male, but clinicians diagnosed her with gender dysphoria and recommended that she begin living as a woman. When she told her employer she intended to “live and work full-time as a woman” after her return from vacation, the company promptly terminated her, saying “this is not going to work out.”

The Supreme Court’s decision means all three of these plaintiffs may proceed with their lawsuits under Title VII. Because none of the cases had proceeded to trial, the Court did not express a view on their eventual outcomes.

The Court also clarified that it was not deciding several issues which were not presented in these cases. In particular, the Court refused to address “sex-segregated bathrooms, locker rooms, … dress codes,” or “anything else of the kind”—although the dissenting Justices contended the Bostock decision opens the door to such claims. The Court also left the door open for employers in future cases to argue that complying with Title VII would substantially burden “a person’s exercise of religion.”

What This Means For You

Even before the Bostock decision, California and several other states, plus the District of Columbia, already banned discrimination against gay and transgender employees. The Bostock decision extends that rule to all 50 states, and highlights the need for all employers to adopt and enforce internal policies against discrimination based on sexual orientation and gender identity.

If you have any questions about the matters discussed in this issue of Compliance Matters, please call your firm contact at (818) 508-3700, or visit us online at www.brgslaw.com .  

Richard S. Rosenberg
Katherine A. Hren
John J. Manier
Ballard Rosenberg Golper & Savitt, LLP