Recently, the EEOC issued a groundbreaking decision in which it concluded that sexual orientation is protected under the 1964 Civil Rights Act Title VII which prohibits employment discrimination based on the sex of the employee. The ruling, if it is upheld by the Courts, would essentially prohibit discrimination on the basis of sexual orientation in the same way that the law currently prohibits discrimination on the basis of race and other protected characteristics.

The EEOC’s decision was not based on a change in the law by Congress, or an interpretation of the law by the Courts, but on an evolving interpretation of the statute by the EEOC. Congress, or the federal courts, have power to overrule the EEOC’s interpretation, and may do so in the future. But, for now, what should employers think about and prepare for?

The EEOC Will Be Scrutinizing Employers Who Make Critical Employment Decisions Based on an Employee’s Sexual Orientation

The EEOC, explains that “[s]exual orientation as a concept cannot be defined or understood without reference to sex.” Further, according to the EEOC, “Discrimination on the basis of sexual orientation is premised on sex-based preferences, assumptions, expectations, stereotypes, or norms.”  The EEOC, therefore, concludes that sexual orientation discrimination, especially such discrimination as is based on aforementioned sex-based assumptions and stereotypes, is necessarily “based on” an employee’s sex, and is prohibited discrimination.

As part of the decision, the EEOC provided some basic examples of what might be considered sexual orientation discrimination.

What Does this Mean for Businesses?

While Congress or the Courts may eventually overrule the EEOC on this matter, until such time, businesses should assume that they could come under investigation by the EEOC should an employee claim sexual orientation discrimination. The best protection for employers against a claim of discrimination is to make personnel decisions based on legitimate business needs, and to document those business decisions in writing.

Businesses should be proactive in taking steps to prevent EEOC investigations and lawsuits:

  • Policies and procedures should be uniformly applicable to employees based on business needs, and not on the basis of any protected category, including sexual orientation.
  • Take a claim of harassment seriously, and investigate.
  • Ask for advice from legal counsel on how such investigations should be conducted.
  • Regular training must be provided to supervisory staff so that they know how to treat employees properly.
  • Company policies should be reviewed to eliminate the potential of having a policy that unfairly impacts, or discriminates against, employees due to sexual orientation.