The current controversy in Indiana surrounding the Religious Freedom Restoration Act (“RFRA”) highlights the issue of whether an employer may discriminate against its employees due to their sexual orientation. The amended RFRA may not be used to discriminate against individuals due to their sexual orientation. The purpose of this article is to inform employers that discrimination against employees due to their sexual orientation may, in many circumstances, already be illegal. The EEOC contends, and several courts have concluded, that such discrimination can be unlawful gender-based treatment.

Proponents of the RFRA argue that the law is necessary in order to protect employers and others who desire to assert their religious freedom. At the same time, the legality of discrimination against employees due to their sexual orientation has been highlighted. Some proponents of RFRA argue that Indiana law should not be amended with respect to civil rights in the workplace. Employers across the country may be surprised to learn that some would argue that it is already unlawful under federal law to discriminate based on sexual orientation.

At the federal level, ENDA, a law of which would include sexual orientation among the protected groups in our federal civil rights laws, codified at 42 USC Section 2000, was passed by the United States Senate in November 2013. However, the US House has never voted on that proposal.  In Indiana, the state civil rights statute does not include sexual orientation as a protected class, although Marion and Monroe counties, along with the cities of BloomingtonEvansvilleIndianapolisNew AlbanySouth Bend, and West Lafayetteprohibit employment discrimination on the basis of sexual orientation and gender identity.  Tippecanoe County and the cities of Fort WayneLafayetteMichigan City, and Terre Haute prohibit employment discrimination on the basis of sexual orientation only. It is often said that there are no employment protections for sexual orientation under federal law.  However, the EEOC and at least two federal appellate courts take the position that discrimination in the workplace against individuals due to their sexual orientation can be a form of gender discrimination. The logic begins with the United States Supreme Court case in Price Waterhouse v. Hopkins, 490 US 228 (1989). In Hopkins, the plaintiff was denied partnership in an accounting firm because of her appearance and conduct were not sufficiently feminine. In order to improve her chances for partnership, Ms. Hopkins was advised to walk more femininely, talk more femininely, dress more femininely, wear make-up, have her hair styled and wear jewelry.  Ms. Hopkins was successful in convincing the US Supreme Court that such stereotypical criteria was a form of gender discrimination.

Since Hopkins, several cases have held that employers can be liable where they discriminate against the employee because of a stereo typical view of a person's particular gender identity. For example, in Prowel v. Wise Bus. Forms, Inc., 579 F. 3d 285 (3d Cir. 2009), the court reversed the district court grant of summary judgment finding that a jury could find harassment based upon an employee's high voice, effeminate walk, and crossing his legs "the way a woman would sit” could be due to his not fitting the stereotypical view of how a man should look rather than due to his homosexuality. In Smith v. City of Salem, 378 F. 3d 566 (6th Cir. 2004) a Salem, Ohio-firefighter was diagnosed with gender identity disorder. According to the Plaintiff’s complaint, after telling his supervisor that he would become a woman, the city began a "witchhunt" forcing the employee to resign by requiring multiple psychological tests. The appellate court found that the plaintiff stated a claim.

The EEOC set out its position in Macy v. Holder, 2012 EEOPUB LEXIS 1181 (April 20, 2012). The EEOC believes that "claims of discrimination based on transgender status also referred to as claims of discrimination based on gender identity are cognizable under Title VII’s sex discrimination prohibition, and may therefore be processed under part 1614 of the EEOC's federal sector EEO complaints process”.

While many employers may have heard recently that Indiana law needs to be changed in order to protect individuals based on their sexual orientation, employers must also understand that such protections may already exist under federal law.  However, those protections have not been accepted by all federal judicial circuits and would only apply to employers with 15 or more employees. Under the circumstances, a wise employer will not make reference to stereotypical traits of its employees, especially in discipline and termination.