Welcome to Labor of Law. There's a lot more this week on the LGBT workplace rights front in court, and the L&E bar got some Oscar buzz: What's the “inclusion rider”? Go inside PwC's handling of its first transgender employee transition. And scroll down for the latest on who got the work in some of the big disputes making headlines.

I'm Erin Mulvaney in Washington, D.C., covering labor and employment from the Swamp to Silicon Valley. Follow this weekly newsletter for the latest analysis and happenings. If you have a story idea, feedback or just want to say hi, I'm at [email protected] and on Twitter @erinmulvaney.

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Momentum Builds in Court for LGBT Employees

On the heels of the Second Circuit's big decision in Zarda, there's more movement on the LGBT workplace-rights front. A new fight is brewing in Michigan, and a federal appeals court says employers can't use religion as a reason to evade discrimination laws.

➤➤ Lambda Legal filed its opening brief Wednesday in a case in the U.S. Court of Appeals for the Eighth Circuit that confronts questions over sexual orientation protection. Attorneys from Mathis, Marifian & Richter also represent the plaintiff, Mark Horton, a gay man who alleges a Missouri company withdrew an employment offer on the basis of his sexuality.

“We have taken huge strides in ensuring that federal courts across the country recognize that sexual orientation discrimination is a form of sex discrimination prohibited by federal law,” says Greg Nevins, Employment Fairness Project Director for Lambda Legal.

➤➤ Meanwhile, in a win for transgender worker rights (and the EEOC), the Sixth Circuit this week overturned a lower court's decision that found a funeral home lawfully fired a transgender employee. The case, EEOC v. Harris Funeral Homes, has been closely watched. The funeral home cited a religious exemption in its decision to fire the employee.

“Discrimination against employees, either because of their failure to conform to sex stereotypes or their transgender and transitioning status, is illegal under Title VII,” the appeals court said.

Gender identity protection under Title VII is less divisive than sexual orientation, said Jay Holland, principal at Joseph, Greenwald & Laake and chair of the firm's labor and employment practice.

“Indeed, this decision in some respects is a relatively straight forward analysis based on gender non-conformity, and may be less controversial—legally—than the recent Second Circuit decision which held that sexual orientation is covered by Title VII,” Holland says. “The courts have consistently held that gender stereotyping is covered by Title VII. Here the court made clear that religion does not present a compelling defense to discrimination.”

Scott Rabe, a Seyfarth Shaw partner in New York, says: “While time will tell whether other circuits will adopt a similar interpretation, if the Sixth Circuit's legal rationale is followed, employers will be hard-pressed to defend Title VII claims brought by the EEOC based on the alleged exercise of religious freedom.”

➤➤ Here's Paul Hastings partner Cameron Fox, a lead attorney for Google, on what's on her plate…

“There are traditional labor issues colliding with interesting cutting-edge issues. In California, in particular, it's been interesting to watch the discussion about gender identity in the workplace. We are talking about transgender rights and transition plans in the workplace. There are not a lot of employment lawyers working through transitioning employee at work. I am working on advising companies on making sure the process goes as smoothly as possible.”

➤➤ For more on the legal and corporate landscape on transgender rights… Here's my snapshot on how PwC handled its first transgender employee's transition in the workplace.

Sam Schwartz-Fenwick, a Seyfarth Shaw partner in Chicago who leads the firm's LGBT affinity group, told me: “In an increasingly gender-fluid workplace, society is ahead of the government in certain ways. This is the reality of the workforce now and employers have to have policies, even if the government hasn't caught up or thought about it.”

Jennifer Allyn, diversity strategy leader at PwC, puts it like this: “This is an emerging area. The language is changing. People's consciousness is changing. All of us are understanding and talking more.”

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Who Got the Work

➤➤ A former ESPN host is suing the cable broadcaster for alleged sexual harassment. The firms Lachtman Cohen and Yankwitt LLP represent the plaintiff, Adrienne Lawrence, a former Big Law associate. Read the complaint here.

➤➤ YouTube's hiring for some positions allegedly excluded white and Asian males, The Wall Street Journal reports. Daniel Feder, a San Francisco solo practitioner, represents the employees. Read the complaint here.

➤➤ Microsoft and IBM have settled their trade secret fight over Microsoft's new chief diversity officer Lindsay-Rae McIntyre. A team from Morgan Lewis & Bockiusand Orrick, Herrington & Sutcliffe represented Microsoft. Paul, Weiss, Rifkind, Wharton & Garrison represented IBM. Bloomberg has more.

➤➤ Jackson Lewis partners John Nolan and Angela Nevarez, representing Estee Lauder, settled EEOC claims in the Eastern District of Pennsylvania. The EEOC accused Estee Lauder, in a first of its kind suit, of having a parental leave policy that discriminates against fathers. Nolan is co-leader of the firm's general employment litigation practice. Read more.

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New & Notable Moves

—Littler Mendelson added Devjani H. Mishra as a shareholder in New York. Mishra was previously executive director and global employment law counsel for Alexion Pharmaceuticals, Inc. Prior to joining Alexion, she was a partner at Seyfarth Shaw.

—Margaret Hanrahan, a shareholder in the Charlotte office of Ogletree, Deakins, Nash, Smoak & Stewart, has been named co-chair of the firm's class action practice group. Hanrahan will serve alongside Patrick Hulla, who has chaired the group for more than a decade.

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Around the Water Cooler…

Meet the Cohen Milstein Lawyer Behind The #InclusionRider At the Academy Awards show Sunday, Best Actress winner Frances McDormand made the “inclusion rider” go viral, but Cohen Milstein Sellers & Toll partner Kalpana Kotagal (pictured above) has been working for months to write the language for such provisions. [National Law Journal]

Inside a Morgan Lewis Partner's New Conflicts Disclosures for NLRB Post Morgan, Lewis & Bockius partner John Ring in Washington, nominated to the National Labor Relations Board, identifies dozens of cases and corporate clients that would present potential conflicts after his would-be confirmation to the agency. [NLJ]

Mayer Brown Partner Resigns Amid Sexual Misconduct Allegations Capital markets partner James Tanenbaum has left the Mayer Brown—one week after joining the firm's New York office—following allegations he engaged in inappropriate conduct at Morrison & Foerster. [Law.com]

American Express Joins Chorus Declaring Gender Pay Parity “Based on the most recent comprehensive pay analysis we conducted with a third-party consulting firm, we are confident that our colleagues are compensated equitably, regardless of gender,” the company said in a memo. “The review found no evidence of bias in our compensation processes and indicated we were effectively at parity.” [Bloomberg]

The Coming Decline of the Employee Drug Test “The benefits of at least reconsidering the drug policy on behalf of an employer would be pretty high,” Jeremy Kidd, a professor at Mercer Law School, says. “A blanket prohibition can't possibly be the most economically efficient policy.” [Bloomberg]

Harassment By Emoji: Employers At a Loss for Words “Employers cannot ignore that emojis have expanded beyond being a fun fad and employees using them inappropriately at work may result in serious ramifications for all parties involved,” Ogletree Deakins shareholder Monique Doucette in New Orleans writes. [City Business]

The Lawyer Who Wants to Make Silicon Valley Safe for Conservatives Meet Harmeet Dhillon, the lawyer for the ex-Google engineer who railed on the company's diversity push. “She's a person of some dichotomy. On the one hand, she was on the board of the ACLU and fights for many individual rights,” Goodwin Procter's Neel Chatterjee said. “On the other hand, she's a staunch Republican Trump supporter.” [Bloomberg]

Labor Department to Test Voluntary Reporting for Wage Violators The Labor Department launched a six-month pilot program that will allow employers who have violated minimum wage and overtime laws to voluntarily report those infractions and avoid civil penalties and releases employees from the right to sue. “It's a get out of jail free card for employers,” said Judy Conti, The National Employment Law Project's federal advocacy coordinator. Meanwhile, Littler's Tammy McCutchen said, “It's a win-win for employers and employees to avoid litigation.” Read DOL's announcement here. [WSJ]

Bill Cosby's defense team told a judge that 19 accusers should not be allowed to testify at his upcoming sexual assault retrial. “The purpose would just be to enrage the jury beyond what is going on outside the courtroom with the #MeToo movement and other things that have nothing to do with Mr. Cosby at all,” defense attorney Becky James of Greenberg Gross argued. [Reuters]

That's all for this week. Thanks for reading. Shoot me a note with questions and suggestions: [email protected]