Ban on Sexual Orientation Discrimination May Affect Arizona Employers

A federal court has ruled against sexual orientation discrimination in three Midwestern states, and other jurisdictions may follow that court’s lead.

On April 4, the U.S. Seventh Circuit Court of Appeals became the first federal appellate court to rule that discrimination on the basis of sexual orientation is prohibited by existing federal law. By an 8-3 vote in Hively v. Ivy Tech Community College of Indiana, the Court pronounced that “discrimination on the basis of sexual orientation is a form of sex discrimination.”

The ruling, which is effective immediately for employers in Illinois, Wisconsin and Indiana, came after a number of federal district and appellate courts had hinted that it was time to revisit decades-old precedent finding that sexual orientation was not a protected class.

The Issue

The Hively case involved an openly lesbian woman, Kimberly Hively, who was a part-time teacher at Ivy Tech Community College in South Bend, Indiana. Between 2009 and 2014, she unsuccessfully applied for a number of full-time teaching positions at the school. In 2014, her part-time teaching contract was not renewed.

Believing that the college’s actions were in response to her sexual orientation, Ms. Hively filed a charge of discrimination on that basis with the Equal Employment Opportunity Commission (EEOC) and eventually filed a lawsuit in federal court in Indiana. That court dismissed her case, holding that “sexual orientation” was not among the enumerated protected classifications under Title VII of the Civil Rights Act of 1964.

The Appeal

The Seventh Circuit panel that first heard the case affirmed district court’s dismissal, ruling that a circuit court precedent was binding, even while strongly suggesting that that the precedent should be revisited in light of recent developments, including the Supreme Court’s recognition, in Obergefell v. Hodges (135 S. C. 2584), of the right of same-sex couples to marry.

The panel pointed to, among other issues, “a paradoxical legal landscape in which a person can be married on Saturday and then fired on Monday for just that act.” 830 F.3d 698, 714 (7th Cir. 2016). The full Seventh Circuit, including two influential Reagan-appointed circuit court judges, agreed, and ruled in favor of Ms. Hively.

Impact on Arizona Employers

For now, the Seventh Circuit’s decision does not affect Arizona employers, as the scope of the ruling is limited to employers in Illinois, Wisconsin and Indiana. Other courts have not yet followed suit, and the Supreme Court has been silent on the issue.

However, there are indications that other circuit courts may follow suit. For example, some courts have recognized that employees who are subjected to sex stereotyping, which can be viewed as a form of sexual orientation discrimination, may have certain protections under existing law. Similarly, recent EEOC pronouncements make clear that the Commission views current law as prohibiting discrimination on the basis of sexual orientation. Also, a number of state and local laws (including city ordinances in Phoenix and Tempe) already prohibit discrimination on the basis of sexual orientation. In short, it seems that it is only a matter of time until other courts and local jurisdictions follow the Seventh Circuit’s lead.

Employers seeking to be proactive and to avoid cutting-edge legal claims may well want to revisit their policies and ensure that they expressly prohibit discrimination on the basis of sexual orientation.