The EEOC’s Decision

On July 18, 2015, the Equal Employment Opportunity Commission (EEOC) decided that Title VII’s prohibition on sex discrimination extends to discrimination based on an individual’s sexual orientation. This decision overturns past EEOC decisions, but is in line with recent guidance provided by the EEOC.

The 3-2 majority followed logic similar to that used by the EEOC in deciding that discrimination based on transgender status is also prohibited under Title VII’s prohibition on sex discrimination. The argument used by the EEOC is as follows: (1) “Discrimination on the basis of sexual orientation is premised on sex-based preferences, assumptions, expectations, stereotypes, and norms,” therefore, (2) “allegations of sexual orientation discrimination involve sex-based considerations.”

Repercussions of the EEOC Decision

While courts show significant deference to EEOC decisions, courts are not bound  by EEOC rulings. However, the EEOC likely will soon file lawsuits to try to  establish that, as a matter of law, an employee’s sexual orientation is protected by Title VII. That being said, it is still unclear whether federal courts will accept the EEOC’s decision. In the past, federal courts have held that sexual orientation is not covered under Title VII, even when framed as sex discrimination. Courts may choose to ignore the EEOC’s decision based on these past precedents, but when the EEOC made a similar move to incorporate transgender individuals under Title VII’s sex discrimination prohibition, the courts generally adhered to the EEOC’s position.

What Are the Employers’ Next Steps?

Employers should examine their equal employment opportunity policies for inconsistencies with the EEOC decision and decide whether they want to include sexual orientation in their diversity policies. Additionally, employers should ensure that their EEO policies are consistent with state and local laws that may already include sexual orientation as a protected class. If an employer chooses to make employment decisions taking the sexual orientation of an employee into account in any way, it should be aware of the legal risks. Until courts begin to address this issue, companies should prepare for an outcome which is consistent with the EEOC’s decision and assume sexual orientation is a protected classification, no different than race, gender, age or other legally protected classifications.