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High Court LGBT Decision: Much at Stake in Clarifying Gray Area

April 23, 2019, 5:26 PM

A Supreme Court ruling on whether LGBT workers have federal civil rights protections could provide long-awaited clarity to the business community and have wide ripple effects on discrimination cases beyond the workplace, including health care and education.

“The positive of the Supreme Court taking this up is that we’ll have certainty,” said Seyfarth Shaw partner Sam Schwartz-Fenwick, who leads the firm’s LGBT affinity group. “For employers and employees, this has been a gray area.”

The trio of cases that the U.S. Supreme Court agreed to take up April 22Altitude Express v. Zarda, Bostock v. Clayton County, GA, and R.G. & G.R. Harris Funeral v. EEOC—examine whether sexual orientation and gender identity should be protected as sex discrimination under Title VII.

Federal appeals courts are divided on the issue, and even the federal agencies that enforce civil rights are at odds.

Employer Support for LGBT Rights

LGBT equality in the workplace has the support of major U.S. companies and the Equal Employment Opportunity Commission. In appeals courts across the country, coalitions of employers have pushed for the courts, including the Supreme Court, to clarify that lesbian, gay, bisexual, and transgender workers should be guaranteed protections against bias. Many employment attorneys already advise companies to provide protections regardless of the law.

But there are still many cases, including in the courts, in which LGBT workers say they’ve been discriminated against by their employers. Their right to sue for discrimination isn’t guaranteed.

“None of us should fear that we could be fired just because of who we are,” said James Esseks, director of the ACLU Lesbian Gay Bisexual Transgender & HIV Project. The ACLU is arguing in the Zarda and Harris Funeral cases. “These employers say it should be lawful to fire people because they are gay or transgender,” he said of the defendants in those cases.

LGBT rights have taken a step forward at the state level—at least 20 states now offer explicit protections for LGBT workers. Moreover, about 90 percent of Fortune 500 companies have policies that prohibit discrimination on the basis of sexual orientation, and 83 percent prohibit discrimination based on gender identity, up from 3 percent in 2000, according to the Human Rights Campaign.

Companies that have urged courts to protect LGBT workers from bias include big-name retailers Levi Strauss & Co. and Starbucks, tech companies Google and Microsoft, and financial giants Deutsche Bank and Morgan Stanley.

‘Overlap of Politics and Legal’

The court taking up the issue has the potential to be a wake-up call for employers and nudge them to set policies that provide a good workplace for all, said Jason Habinsky, partner at Haynes and Boone.

The issue is also percolating on other fronts and tends to generate political heat. Federal legislation known as The Equality Act has been proposed in Congress. The measure would amend existing civil rights law, including Title VII, to explicitly include sexual orientation and gender identity as protected characteristics.

“It will be fascinating to watch how politics affects jurisprudence. This issue is ripe for politics to bleed into the whole process,” Habinsky said. “It’s the perfect or imperfect overlap of politics and legal here.”

The shift in the Supreme Court’s willingness to rule on whether Title VII should extend to sexual orientation and gender identity has been “a long time time coming,” said JoLynn Markison, labor and employment partner at Dorsey & Whitney.

Justice Anthony Kennedy, a swing vote on the court who cast a vote along with the liberal judges in favor of marriage equality, stepped down last year. His replacement, Justice Brett Kavanaugh, doesn’t have a judicial history on LGBT matters, Markinson said.

“Regardless of how the Supreme Court ultimately rules, for employers the best course remains to ensure equal treatment of LGBTQ employees,” she said.

Court Moving Out of Its Lane?

Alternatively, those fighting against protections say it could be unfair to small businesses to allow the courts to change the rules.

It’s not the role of the court to rewrite the definition of sex to mean gender identity, said John Bursch, vice president of appellate advocacy and senior counsel with Alliance Defending Freedom. The group is defending Harris Funeral Home.

“Un-elected officials do not have the power to make these decisions for us,” he said during a media availability April 22.

An outcome in favor of expanding protections would open the doors to require employers to change bathroom and locker room policies and provide benefits that don’t align with their religious beliefs, Bursch said.

The Becket Fund for Religious Liberty, a conservative group, favors the interpretation that only a change in federal legislation should guarantee new protections. Vice President and Senior Counsel Luke Goodrich said a court ruling in favor of LGBT protections would “raise a host of First Amendment and other constitutional issues.” He said such an outcome could infringe on the ability of religious organizations like hospitals, homeless shelters, and schools to continue to provide services consistent with their religious beliefs.

“The Court should interpret Title VII’s plain language to decrease, not increase, the amount of conflict with the Constitution and among different social groups,” Goodrich said in an email.

Case Law Nuanced, Impact High

The Supreme Court decision could have broad reach beyond the workplace. Title VII case law often is cited as precedent in other civil rights contexts, such as Title IX rules prohibiting sex-based discrimination in K–12 schools and universities.

The ACLU’s Esseks said a ruling that limits protections could extend to schools and the health care context.

Seyfarth Shaw’s Schwartz-Fenwick noted that the definition of sex discrimination has evolved over the decades, and that it’s a nuanced area of the law. The Supreme Court has issued rulings that said same-sex harassment is protected, as well as gender stereotyping.

He added, “No one in 1964 thoughts the word sex extended to sexual orientation. Those weren’t concepts in 1964. These are different legal theories the judges are employing in analyzing these issues.”

To contact the reporter on this story: Erin Mulvaney in Washington at emulvaney@bloomberglaw.com

To contact the editors responsible for this story: Simon Nadel at snadel@bloomberglaw.com; Jay-Anne B. Casuga at jcasuga@bloomberglaw.com