In the last 20 years, the legal landscape has shifted dramatically for lesbians, gays, bisexuals, and transgender (LGBT) individuals. In 1996, the Supreme Court used the Equal Protection Clause to invalidate an amendment to Colorado’s Constitution that would have prevented any branch or political subdivision of the state from protecting individuals against sexual orientation discrimination.1 Several years later, the Court determined that individuals’ rights to liberty under the Due Process Clause gave them the full right to engage in private consensual sexual conduct without the government’s intervention.2 Then, in 2013, the Supreme Court struck down the Defense of Marriage Act, finding that it violated the equal protection guarantee of the Fifth Amendment.3 And finally, just last year, the Supreme Court ruled that under both the Due Process and Equal Protection Clauses of the Fourteenth Amendment, same-sex couples had the right to marry in every state.4

While each of these decisions had a profound impact on the lives of many Americans, none increased the workplace protections of LGBT employees under federal anti-discrimination laws. As a panel of the Seventh Circuit recently pointed out, “[m]any citizens would be surprised to learn that under federal law any private employer can summon an employee into his office and state, ‘You are a hard-working employee and have added much value to my company, but I am firing you because you are gay.’”5

In fact, every circuit court that has been asked whether Title VII – the federal law that prohibits discrimination against an employee because of his race, color, religion, sex or national origin – covers discrimination based on sexual orientation has answered the question “no.”6 However, in reaching this conclusion, every court has unequivocally condemned the practice of sexual orientation discrimination as unwise, unfair and immoral. So why the disconnect?

As most courts see it, the issue is that Title VII does not explicitly prohibit sexual orientation discrimination, and Congress has attempted for decades to pass legislation that would expand Title VII to cover sexual orientation discrimination but has come up short.7 Also, most states have not passed legislation that covers such discrimination.

But all of this is not to say that LGBT employees are without recourse. Since the Supreme Court’s decision in Price Waterhouse v. Hopkins, Title VII has covered claims by employees who were discriminated against because they did not conform to traditional gender stereotypes.8 In Price Waterhouse, Ann Hopkins failed to make partner at her accounting firm and was told she could improve her chances next time if she would walk, talk and dress more femininely, get her hair styled, and wear jewelry. The Supreme Court said this sort of gender stereotyping constitutes discrimination because of sex under Title VII.9

What arose from Price Waterhouse is a line of cases that protect LGBT employees from gender stereotyping discrimination but not from discrimination based on sexual orientation. The courts following this approach are forced to distinguish between behavior that would fall into the gender stereotyping category and be protected from those which would fall into the sexual orientation discrimination category and not be. At best, this is a difficult task. At worst, it’s an exercise in futility.

Some courts, unwilling or unable to differentiate between the two categories, have discarded this approach all together. For these courts, if it appears that the employee is trying to recast a sexual orientation discrimination case as one for gender stereotyping, they will deny all relief. In other words, these courts reject employees’ claims of gender stereotyping, as meritorious as they may be, when it appears the claims are intertwined with a sexual orientation discrimination claim.10

This could be primed for a change, though. While courts seem confused as to Title VII’s scope, the EEOC has no doubt: sexual orientation discrimination is, the EEOC says, discrimination because of sex. In Baldwin v. Foxx,11 the EEOC came to this conclusion for three main reasons. First, it concluded that “sexual orientation discrimination is sex discrimination because it necessarily entails treating an employee less favorably because of the employee’s sex.”12 To make its point, the EEOC gave the example of a woman who is suspended for placing a photo of her female spouse on her desk, and a man who faces no consequences for the same act. Second, it explained that “sexual orientation discrimination is also sex discrimination because it is associational discrimination on the basis of sex,” in which an employer discriminates against lesbian, gay, or bisexual employees based on who they date or marry.13 Finally, the EEOC described sexual orientation discrimination as a form of discrimination based on gender stereotypes in which employees are harassed or punished for failing to live up to societal norms about appropriate masculine and feminine behaviors, mannerisms and appearances.14 In emphasizing this last point, the EEOC rejected the numerous court decisions that have tried to distinguish between gender non-conformity claims and those for sexual orientation discrimination.

In its guidance on the subject, the EEOC has tracked the Baldwin decision and said that discrimination on the basis of sexual orientation is illegal under Title VII. In litigation involving the EEOC, it has pushed this tripartite approach with varying success. While no circuit court has followed Baldwin or the EEOC’s guidance, a number of district courts have taken notice. Courts in Alabama, the District of Columbia, California, Oregon and Pennsylvania have all sided with the EEOC’s position and found that Title VII does prohibit sexual orientation discrimination.15 So, at least in these courts, an employer may be held liable for discrimination based on sexual orientation, just like any other protected category under Title VII.

Unfortunately, the Supreme Court has not weighed in on this important topic to resolve the tension between the circuit courts and the EEOC (and certain district courts). It’s hard to say whether the Supreme Court will decide this issue soon, but the Court’s interest in cases addressing LGBT rights, such as the Gloucester County School Board v. G.G. case (involving issues of a school district’s obligations to a transgender student) that will be addressed this term, makes it likely that this issue will come before the Court eventually.

So until the Court decides whether Title VII prohibits sexual orientation discrimination, what’s an employer to do? After all, a mistake here –- even one made in good faith — could cost an employer Here are three things employers can do right now to minimize their liability:

  • Update your anti-harassment policy to include sexual orientation. While the weight of legal authority says that LGBT employees do not have claims for sexual orientation discrimination under Title VII, that trend is shifting. The EEOC’s position is clearly at odds with most of the case law, but as the agency enforcing federal discrimination laws, it has the authority to file lawsuits against employers who thumb their noses at it. A number of lower courts have listened, holding that Title VII does prohibit sexual orientation discrimination. Even if you disagree with the EEOC’s position, do you want to be the long and expensive test case that goes to the Supreme Court?
  • Train your employees on your policies. A written policy isn’t any good unless your employees –– particularly your managers –– know about it. It’s smart to periodically train your employees on sexual and other types of harassment. Make training on sexual orientation discrimination part of it. Ensure your employees know that your company prohibits discrimination on the basis of sexual orientation just as it does discrimination on other protected bases.
  • Make sure to follow through. It’s easy to talk the talk, but make sure you walk the walk. Just as you should not tolerate racial slurs and derogatory comments about women in the workplace, employees need to know that offensive comments about gay, lesbian and transgender individuals are also out of bounds. If someone makes a complaint of sexual orientation discrimination, management should investigate and take prompt remedial action, just as it would with any other type of complaint.

When it comes to LGBT rights and protections, the legal world is in a state of flux. For employers, that means a lot of uncertainty, but you don’t have to be held captive by uncertain times. Be proactive now and help limit the potential of future liability.