On February 26, 2018, the US Court of Appeals for the Second Circuit became the second federal circuit to hold that Title VII of the Civil Rights Act of 1964 (Title VII) prohibits sexual orientation discrimination.

In Zarda v. Altitude Express, the Second Circuit revived a lawsuit filed by the estate of Donald Zarda against his former employer, whom the estate contends discriminated against Zarda by terminating his employment after he communicated his sexual orientation to a customer. The court concluded that the natural reading of Title VII’s prohibition on discrimination based on sex extends protection to employees based on their sexual orientation. The court explained that “sexual orientation is a subset of sex discrimination because sexual orientation is defined by one’s sex in relation to the sex of those to whom one is attracted, making it impossible for an employer to discriminate on the basis of sexual orientation without taking sex into account.” The dissenting opinion explained, however, that no fair reading of Title VII would support the conclusion that Congress intended to include sexual orientation as a protected category, particularly considering that “same-sex sexual relations were criminalized in nearly every state,” and discrimination against gay men and women was not open for public debate when Congress passed Title VII.

The Zarda decision is the latest Title VII case addressing whether sexual orientation is inextricably linked to sex and, therefore, protected under federal law. However, a number of states—including California, Colorado, Connecticut, Delaware, District of Columbia, Hawaii, Illinois, Iowa, Maine, Maryland, Massachusetts, Minnesota, Nevada, New Hampshire, New Jersey, New Mexico, New York, Oregon, Rhode Island, Utah, Vermont, Washington and Wisconsin—have statutes prohibiting private employers from discriminating on the basis of sexual orientation and gender identity or expression. Additionally, several cities and municipalities have passed local ordinances prohibiting discrimination based on sexual orientation and gender identification.

The Equal Employment Opportunity Commission (EEOC) has also taken the position that Title VII prohibits discrimination based on sexual orientation and gender identification.1 The Zarda decision comes on the heels of a split among two other circuit courts,2 and expressly overturns two Second Circuit decisions3 that rejected sexual orientation as a protected class under Title VII. With more circuit courts addressing and splitting over the issue, it is more likely that the US Supreme Court will take up the issue and resolve the conflict. In the meantime, and absent definitive guidance from the Supreme Court, the more prudent course is for employers to avoid making employment-related decisions based on factors other than conduct or job performance.