In a highly anticipated move, the U.S. Supreme Court recently agreed to consider a trio of cases that will determine whether the nation's most prominent workplace discrimination statute prohibits employment discrimination against LGBT workers. The issue: whether Title VII's ban against “sex” discrimination covers claims involving sexual orientation and gender identity. Employers across the country will finally have a definitive answer regarding the contours of the federal primary civil rights law as it applies to members of the LGBT community. But will this news even cause a ripple for California employers?

Sexual Orientation Discrimination

Before we examine the impact the cases will have on the California business community, it's important to understand the context of each case. The first two cases accepted by the court cover the issue of sexual orientation discrimination. In February 2018, the U.S. Court of Appeals for the Second Circuit became the second federal appeals court in the country to hold that sexual orientation was covered by Title VII's protections (Zarda v. Altitude Express). Donald Zarda worked as a sky-diving instructor on New York's Long Island over the summer of 2010. During one tandem jump, where he was strapped hip-to-hip to a female client, he attempted to lightheartedly comfort her by telling her that he was gay “and had an ex-husband to prove it.” The client claimed that Zarda inappropriately touched her and only disclosed his sexual orientation to excuse his behavior.

She complained to the company, which in turn fired Zarda for violating company policy. Zarda, however, believed his termination was motivated by his sexual orientation and brought a lawsuit for gender discrimination under Title VII against his former employer. The Second Circuit acknowledged that times change, and courts must change with the times; it concluded that if sexual orientation bias is motivated, at least in part, by sex, then it is a subset of sex discrimination. And because Title VII explicitly outlaws sex discrimination, the court said, it naturally followed that sexual orientation discrimination should be outlawed under the statute.

Other courts, however, did not see things the same way. In May 2018, for example, the Eleventh Circuit Court rejected a very similar argument and concluded that Title VII does not cover sexual orientation discrimination (Bostock v. Clayton County, Georgia). Gerald Bostock worked as a child welfare services coordinator for Clayton County's Juvenile Court System before being fired for purported irregularities discovered during an internal audit of the funds he managed. He filed suit under Title VII claiming that the real reason he was let go involved sexual orientation bias. Bostock cited disparaging comments made to him at work after it was alleged that his employer discovered that he was playing in a gay recreational softball league. The appeals court was unmoved in dismissing his claim.

Gender Identity Discrimination

Meanwhile, in March 2018, the Sixth Circuit Court became the first appellate court in the land to extend Title VII to cover transgender and transitioning employees (Stephens v. R.G. & G.R. Harris Funeral Homes). Aimee Stephens, a transgender woman who was born biologically male, began work as a funeral director in Detroit, Michigan in 2007. At the time, she presented as a man and used her then-legal name, William Stephens. After six years of employment, Stephens presented the owner of the funeral home a letter indicating that she had struggled with a gender identity disorder her entire life but intended to have sex reassignment surgery. “At the end of my vacation,” she told her boss, “I will return to work as my true self, Aimee Australia Stephens, in appropriate business attire.”

The owner of the funeral home fired Stephens in response to the letter. He indicated that he did not think things would “work out,” and that he would be violating God's commands if he were to permit his male-born funeral director to wear women's clothes. He also said that he believed that his customers would be unnecessarily distracted and upset by the situation. Stephens filed a Title VII gender discrimination claim against the funeral home alleging that she was discriminated against on account of her “sex,” and the Sixth Circuit Court ruled in her favor. “Discrimination on the basis of transgender and transitioning status is necessarily discrimination on the basis of sex,” the court said, meaning that such adverse employment actions would violate Title VII. Although the funeral home tried to argue that, for the purposes of Title VII, “sex” refers to a “binary characteristic for which there are only two classifications, male and female,” the court rejected this argument. “It is analytically impossible,” the court said, “to fire an employee based on that employee's status as a transgender person without being motivated, at least in part, by the employee's sex.”

What's Next?

For employers in California, the Supreme Court's decision to accept these three cases for review is somewhat of a nonstory. The state's Fair Employment and Housing Act (FEHA) already prohibits employment discrimination on the basis of gender, sexual orientation, gender identity and gender expression. In addition, the Fair Employment and Housing Council adopted revised regulations regarding gender identity and gender expression in 2017, addressing issues such as access to workplace facilities.

Nationally, almost half of the states and many local governments have laws similar to California prohibiting sexual orientation and gender identity discrimination in employment. The employers doing business in California and these other jurisdictions have long since integrated workplace protections and policies to include LGBT applicants and workers.

However, for those doing business in the other half of the country with no existing prohibitions against LGBT discrimination, or for those employers based in California with operations elsewhere, the ultimate outcome of these cases may require you to adjust your policies and practices to mirror current standards. A definitive statement by the Supreme Court permitting LGBT employees to bring Title VII claims will mean that you would need to revise your handbooks, training and orientation materials, and overall approach to workplace relations.

Richard R. Meneghello is a partner with Fisher Phillips in Portland, Oregon. He may be reached at [email protected].

Jeffrey A. Fritz is a partner with the firm in Boston, Massachusetts. He may be reached at [email protected].

Benjamin M. Ebbink is Of Counsel with the firm in Sacramento, California. He may be reached at [email protected].