Seyfarth Synopsis: A Seventh Circuit panel’s ruling that Title VII does not cover claims of sexual orientation discrimination will be heard en banc by the Circuit. Whether an en banc ruling affirms or reverses the panel’s decision, it is likely that this issue will only be resolved with certainty by the Supreme Court.

On October 11, 2016, in response to a petition for rehearing filed by the Appellant, and as we predicted in our blog, the Seventh Circuit vacated its panel ruling that Title VII did not extend to claims of sexual orientation discrimination, and decided to hear the case before the entire Seventh Circuit en banc.

The panel decision, issued in August 2016, was controversial and for many inconclusive. The Court was friendly to the reasoning of the EEOC, which has been arguing that sexual orientation discrimination is per se sex discrimination covered by extant law. Despite negating the rationale for not covering sexual orientation discrimination, the panel held fast to stare decisis and upheld the district court’s decision that sexual orientation discrimination claims were not covered by Title VII.

Reading the tea leaves, many believe the Seventh Circuit may be poised to reverse the panel decision. Judge Posner, most notably, has recently been outspoken in his opinions on LGBT issues. He wrote a scathing dissent in a recent Seventh Circuit case, Fuller v. Lynch, No. 15-3487, lamenting an immigration judge’s denial of relief to an asylum seeker on, in Posner’s words, “a supposed lack of ‘proof’ of bisexuality.” Posner also previously authored the opinion striking down Wisconsin’s ban on same-sex marriage in Wolf v. Walker, on the basis of equal protection.

Judge Posner is not, of course, the only Judge in play. He is, however, singularly and vocally outspoken on the issue, acting as a correspondent on LGBT rights in the law in the media. Between Judge Posner’s vocal position, the panel’s internally conflicted initial opinion, and the willingness of the Seventh Circuit to take the case up for rehearing, many see the case as a ripe opportunity for the Seventh Circuit to become the first Circuit Court of Appeals to endorse the EEOC’s outlook on Title VII’s protection on the basis of sexual orientation.

However the Circuit Court rules will hardly be the last word on this issue. The rehearing may result in some stabilization of the law in the Circuit, but is unlikely to portend for consistent results nationwide. A Circuit split is likely to emerge, a split that will only be resolved by legislative or Supreme Court action.

In this time of flux, employers should consult with counsel to evaluate their internal policies, practices and procedures with an eye towards sexual orientation claims.