Executive Summary: On April 3, 2017, in Christiansen v. Omnicom Group, Inc., the Second Circuit held that it was bound by prior precedent in ruling that Title VII of the Civil Rights Act of 1964 does not prohibit sexual orientation discrimination. On the tails of the Seventh Circuit’s en banc decision in Hively v. Ivy Tech Community College overruling prior Seventh Circuit precedent and holding that Title VII does, in fact, prohibit discrimination based on sexual orientation (as reported on April 25, 2017), Christiansen has now filed a petition for rehearing en banc, encouraging the Second Circuit to do the same.

Background: Title VII prohibits discrimination “because of sex.” Until recently, all Circuit Courts that had considered the issue had concluded that sexual orientation discrimination was not “because of sex” and, therefore, was not prohibited by Title VII. This included the Second Circuit, which issued a panel decision in Christiansen on March 27, 2017, holding that until the Second Circuit sitting en banc rules otherwise, it is bound by Simonton v. Runyon, a prior Second Circuit decision which held that Title VII does not prohibit sexual orientation discrimination. Judges Katzmann and Brodie, however, issued a concurring opinion at that time, outlining precisely why Title VII should protect against sexual orientation discrimination, and encouraging review by the full panel. Just days later, on April 4, 2017, the Seventh Circuit, sitting en banc, issued the Hively decision, recognizing for the first time that sexual orientation discrimination is discrimination based on sex and, therefore, a violation of Title VII. Christiansen has now asked the Second Circuit to do the same.

In his April 28, 2017 petition for rehearing by the full Second Circuit panel, Christiansen urges the Second Circuit to take a new look at Simonton, as Judges Katzmann and Brodie urged in their concurring opinion, because his case is the “quintessential case” for such review. Christiansen notes that the Hively court relied heavily on the concurrence in Christiansen in reaching its decision. Christiansen also notes that, had Judges Katzmann and Brodie not been bound by precedent with which they disagreed, they would have held that Title VII prohibits sexual orientation discrimination. Consequently, he urges, absent further review by the Second Circuit en banc, the lower courts “will [similarly] perpetuate Simonton as bad law.”

In further support of his petition, Christiansen cites the need for clarity in how Title VII should be applied to claims related to sexual orientation, and the unworkable situation that has arisen from the Price Waterhouse v. Hopkins and Dawson v. Bumble & Bumble gender stereotyping line of cases, which he reasons have left the district courts to distinguish between discrimination based on sexual orientation as opposed to gender stereotyping.

Finally, Christiansen cites to Obergefell v. Hodges and United States v. Windsor, arguing that the Second Circuit’s current position that Title VII does not prohibit sexual orientation discrimination is “in stark contrast” to the U.S. Supreme Court decisions recognizing the legality of same-sex marriage and the illegality of DOMA’s definition of marriage as being only between a man and a woman. Christiansen argues that these cases “emphasize that the Federal Government must protect people regardless of their sexual orientation.” He also urges that sexual orientation and sex cannot be separated and that sexual orientation discrimination is inherently sex based: “but for his sex,” he would not have suffered discrimination. Thus, he argues that, consistent with the Katzmann/Brodie concurrence and Hively, discrimination based on sexual orientation is a per se violation of Title VII.

At least one district court agrees with Christiansen that Hively and the Christiansen concurrence should be the law in the Second Circuit. Based on these decisions, on May 3, 2017, U.S. District Judge Alvin K. Hellerstein denied the defendants’ motion to dismiss a sexual orientation Title VII claim in Philpott v. State of New York. Judge Hellerstein held that the plaintiff could proceed on this claim, noting that the law “with respect to this legal question is clearly in a state of flux” and that “in light of the evolving state of the law,” the motion to dismiss could not be granted. Employers may see similar decisions in the coming months, as courts may be less willing to dismiss such claims as a matter of law in the early stages of litigation.

Employers’ Bottom Line: Employers should continue to monitor the Circuit Courts as they further develop the boundaries of Title VII as related to sexual orientation discrimination. Companies operating in the Second Circuit (New York, Connecticut and Vermont) should pay special attention to the Christiansen case and other cases presently pending in the Circuit that address LGBTQ rights. Given the outcome in Philpott, employers who are currently in the early stages of litigation may want to reconsider the cost effectiveness of pre-answer motion practice in LGBTQ-related claims. It is also important to remember that many states already have laws in place that prohibit sexual orientation discrimination in the workplace. Therefore, it remains good practice for employers to (a) explicitly prohibit sexual orientation discrimination and harassment in the workplace; (b) provide their employees with a mechanism for bringing such complaints of discrimination or harassment to the employer’s attention; and (c) create thorough investigation procedures for management to utilize if such complaints are received. Employers should also take note that while these recent cases have focused on sexual orientation discrimination and harassment, the holdings will likely impact other LGBTQ issues in the employment setting. Finally, covered federal contractors remain subject to the Obama-era Executive Order prohibiting LGBTQ workplace discrimination against employees working on covered contracts.

Employers may also want to monitor the progress of the bipartisan Equality Act, which was re-introduced in Congress on May 2, 2017. We will continue to keep you updated on LGBTQ rights under Title VII, Title IX and the Equality Act.