Legal Alert Seventh Circuit Holds That Sexual Orientation is a Protected Classification for Employment Discrimination


New Rule in the Seventh Circuit for Employment

Title VII protects discrimination based on a familiar list of categories “race, color, religion, sex, or national origin.”  On April 4, an en banc panel of the Seventh Circuit held that sexual orientation is now protected as a subclass of discrimination based on sex.  “We hold only that a person who alleges that she experienced employment discrimination on the basis of her sexual orientation has put forth a case of sex discrimination for Title VII purposes.”  Hively v. Ivy Tech, (No. 15-1720, April 4, 2017).   Changes in the Supreme Court’s decisions on the definition of marriage and “the common-sense reality that it is actually impossible to discriminate on the basis of sexual orientation without discriminating on the basis of sex,” persuaded the majority that the time had come to overrule prior precedent.

Past Precedent is Overruled Creating a Conflict Between Circuits

Past cases in the Seventh Circuit and the other Circuit Courts of Appeal held that sexual orientation was not protected, including a case last month out of the Eleventh Circuit.  There is now a split of opinion, giving the Supreme Court a reason to specifically rule on this issue.   The Seventh Circuit covers Illinois, Indiana and Wisconsin.  Until the Supreme Court hears a case like this, multi-state employers – for example one with plants in Indiana and Ohio – face different rules on discrimination.

Practical Exceptions and Takeaways

There may be exceptions to this new rule provided by the statute.  A religious institution may be allowed to deny positions to a homosexual individual related to a religious mission.  Nor did the Court consider the meaning of discrimination in the context of the provision of social or public services.  As a result, there may be instances when decisions based on sexual orientation will not be discriminatory.

For most employers in Indiana, discrimination in employment based on homosexuality is now potentially subject to a claim for monetary damages.  Employers should be wary that co-worker taunts and insults about homosexuality can create liability.  Employers should also update their handbooks to recognize that sexual orientation is now a protected sub-class for sex discrimination.

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