On February 26, 2018, in Zarda v. Altitude Express, Inc., No. 15-3775 (2d Cir. Feb. 26, 2018), the United States Court of Appeals for the Second Circuit, sitting en banc (i.e., all the judges, instead of just the usual panel of three), overruled nearly two decades of precedent and held that Title VII’s prohibition against employment discrimination “because of … sex” necessarily encompasses claims of discrimination based on sexual orientation.

Facts and Procedural History

The plaintiff, Donald Zarda (“Zarda”), was a homosexual man who claimed that he was terminated from his job as a skydiving instructor because of his sexual orientation. After exhausting his administrative remedies by filing a charge of discrimination with the EEOC, Zarda initiated an action in the United States District Court for the Eastern District of New York asserting claims of sex and sexual orientation discrimination under Title VII of the Civil Rights Act of 1964 (“Title VII”) and the New York State Human Rights Law (“NYSHRL”). Following discovery, the district court granted summary judgment to defendants with respect to the Title VII claim but allowed the NYSHRL claim for sexual orientation discrimination to proceed to trial, after which the jury returned a verdict for defendants.

After summary judgment but before trial, the EEOC issued a decision in Baldwin v. Foxx, EEOC Decision No. 0120133080 (July 15, 2015), in which the EEOC held that “sexual orientation is inherently a ‘sex-based consideration’; accordingly an allegation of discrimination based on sexual orientation is necessarily an allegation of sex discrimination under Title VII.” Following the decision in Baldwin, Zarda asked the district court to reinstate his Title VII claim, but the court declined to do so, citing the Second Circuit’s decisions in Simonton v. Runyon, 232 F.3d 33 (2d Cir. 2000), and Dawson v. Bumble & Bumble, 398 F.3d 211 (2d Cir. 2005), which held that claims of sexual orientation discrimination are not cognizable under Title VII. Following trial, Zarda appealed, arguing, inter alia, that Simonton and Dawson should be overruled in light of Baldwin. A panel of the Second Circuit initially declined to do so, noting that those decisions could only be overturned by the entire court sitting en banc. The court subsequently ordered rehearing en banc to revisit the holdings in Simonton and Dawson.

The Second Circuit’s En Banc Decision

In a lengthy opinion, the en banc court held that claims of sexual orientation discrimination are cognizable under Title VII, thus overruling Simonton and Dawson. While the court offered several rationales for reaching this conclusion, only two received the support of the majority of the court. First, the court noted that sexual orientation discrimination is a function of sex, in that one cannot reference another’s sexual orientation without necessarily referencing the individual’s sex. Although the text of the statute does not reference sexual orientation, the court noted that such an omission did not preclude the past recognition of other, now well-established, claims such as sexual harassment, male-on-male harassment, and gender stereotyping. According to the court, sexual orientation discrimination is the type of “reasonably comparable evil” that, while not expressly contemplated by Congress at the time when Title VII was enacted, is nonetheless protected under the statute’s plain language, which prohibits discrimination “because of … sex.”

Second, as an alternative rationale, the court concluded that sexual orientation discrimination claims are cognizable under Title VII due to the statute’s recognized prohibition against associational discrimination. The court cited its opinion in Holcomb v. Iona College, 521 F.3d 130 (2d Cir. 2008), in which it held that the plaintiff, a white man who had been terminated because his employer did not approve of his marriage to a black woman, had stated a cognizable claim of associational discrimination under Title VII. The court saw no difference between discrimination based on the race of those with whom one chooses to associate, and discrimination based on the associated individual’s sex. According to the court, by deciding to take action against an employee who chooses to associate with someone of their own gender, the employer is acting on the basis of the employee’s gender as well.

What Does This Decision Mean For You?

Regardless of the rationale, the court’s holding was clear and unequivocal—Title VII prohibits discrimination based on an individual’s sexual orientation. Accordingly, employers can expect to see an increase in claims of sexual orientation discrimination. In certain jurisdictions, such as New York City, the increase in such claims may be minimal, given that the New York City Human Rights Law has long since recognized such claims and affords plaintiffs the same remedies available under Title VII (and more) with a reduced evidentiary burden. Elsewhere, plaintiffs may find Title VII to be a more lucrative source of potential recovery than comparable provisions under state or local law.

While the Zarda decision will understandably have a substantial impact on future litigation, its effects on pending litigation will be somewhat attenuated due to Title VII’s exhaustion requirement. That is, plaintiffs seeking to file claims under Title VII are required to first file a charge of discrimination with the EEOC. Prior to Zarda, plaintiffs proceeding under state or local law likely did not preserve their federal claims by filing with the EEOC, as doing so would have been futile, notwithstanding the EEOC’s decision in Baldwin. For those savvy plaintiffs who chose to preserve their claims by filing a charge of gender discrimination with the EEOC, they are now free to pursue those claims in federal court.

Moreover, while the Zarda decision only extends to jurisdictions within the Second Circuit (New York, Connecticut and Vermont), it represents a trend of Circuit courts revisiting the question of sexual orientation coverage under Title VII since the EEOC decided Baldwin. In March 2017, a panel of the Eleventh Circuit (with jurisdiction over Alabama, Florida and Georgia) declined to recognize such coverage, feeling that it was bound by prior precedent until either the Supreme Court or the Eleventh Circuit en banc overruled it. Evans v. Ga. Reg’l Hosp., 850 F.3d 1248 (11th Cir.), cert. denied, 138 S. Ct. 557 (2017). One month later, an en banc Seventh Circuit (with jurisdiction over Illinois, Indiana and Wisconsin) decided that Title VII does afford such coverage. Hively v. Ivy Tech. Cmty. Coll. Of Ind., 853 F.3d 339 (7th Cir. 2017). Given the split in the Circuits, odds are very good that the Supreme Court will decide this critical issue sooner rather than later. Stay tuned.