In an en banc decision issued yesterday, the United States Court of Appeals for Seventh Circuit held that Title VII’s prohibition on discrimination on the basis of sex includes discrimination on the basis of sexual orientation. See Hively v. Ivy Tech Community College of Indiana, No. 15-1720 (7th Cir. 2017). In doing so, it became the first court of appeals to reach this conclusion, disagreeing with contrary decisions from multiple other circuits. While this issue could very well be taken up by the Supreme Court of the United States, any Supreme Court decision would likely not come before early 2018. Absent expedited action by the Supreme Court or a stay of the ruling, this will remain the law in the Seventh Circuit for the foreseeable future.

Title VII makes it illegal for an employer “to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s . . . sex[.]” 42 U.S.C. § 2000e-2(a)(1). As the court acknowledged in the beginning of its opinion, virtually all courts of appeals shared the Seventh Circuit’s prior view that the term “sex” as used in Title VII “implies that it is unlawful to discriminate against women because they are women and against men because they are men,” and does not speak to discrimination based on sexual orientation. Op. at 3-4.

Although the Seventh Circuit acknowledged that the Supreme Court has not addressed this specific question, it nevertheless relied on other Supreme Court guidance to reverse course and extend Title VII protection to allegations of sexual-orientation discrimination. Specifically, the court discussed a prior Supreme Court case in which the Court held that Title VII protects against male-on-male sexual harassment, just as it would male-on-female harassment. The Seventh Circuit took this holding as the Supreme Court acknowledging that types of sexual harassment may evolve over time, and that Title VII will still provide protection. After evaluating the statutory text and several additional Supreme Court decisions, the court held that sexual-orientation discrimination is precluded by Title VII, noting its perception of the “common-sense reality that it is actually impossible to discriminate on the basis of sexual orientation without discriminating on the basis of sex.” Op. at 22.

A total of eight judges joined the majority. Three dissented, principally arguing that the majority judicially amended a federal statute, a task reserved exclusively for Congress. With the prevalence of Title VII litigation today, several federal courts, including several courts of appeal, will likely have the ability to weigh in on this issue over the coming months. This decision could prompt additional courts to consider following the Seventh Circuit’s lead, though existing precedent in several circuit courts will be difficult to overturn without those circuit courts also agreeing to hear cases “en banc” (with the full court) as opposed to in panels, as is more common.

The other important corollary to this decision for educational intuitions is the impact that it could have on the interpretation of Title IX. Similar to the language used in Title VII, Title IX provides that “No person in the United States shall, on the basis of sex, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any education program or activity receiving Federal financial assistance[.]” 20 U.S.C. § 1681(a). Several courts, including the Seventh Circuit, have frequently looked to interpretations of Title VII in evaluating Title IX claims. See, e.g., Hendrichsen v. Ball State Univ., 107 F. App’x 680, 684 (7th Cir. 2004) (“This court has endorsed looking to Title VII law to determine whether the alleged sexual harassment is sufficiently severe or pervasive to constitute illegal discrimination on the basis of sex under Title IX.”).

At this point, it is unclear whether courts within the Seventh Circuit will use the Hively decision to extend Title IX’s protections to claims of sexual-harassment discrimination. This situation should be monitored closely, as this development could substantially alter the Title IX regulatory and litigation landscape for educational institutions.

Finally, the Seventh Circuit expressly declined to analyze the interaction between this decision and Title VII’s religious exemptions. Op. at 23. Specifically, Title VII states that its protections do not apply “to a religious corporation, association, educational institution, or society with respect to the employment of individuals of a particular religion to perform work connected with the carrying on by such corporation, association, educational institution, or society of its activities.” 42 U.S.C. § 2000e-1(a). Instead, the Court recognized that the Hively likely sets up a dispute involving religious liberty that will have to be decided another day. Given the potential constitutional implications of the Establishment and Free Exercise clauses, as well as the statutory implications of both Title VII and the Religious Freedom Restoration Act, faith-based educational institutions should closely monitor developments in these areas.

What this means for you:

Educational institutions located within the Seventh Circuit (Illinois, Indiana, and Wisconsin) are now bound by the Hively decision. Thus, employees of those institutions who believe they have been discriminated against by their employer on the basis of sexual orientation may bring corresponding Title VII claims. Institutions outside the Seventh Circuit are not bound by this decision, but institutions should nevertheless monitor similar cases in their regional circuit. Further, this decision does not directly impact any state-law employment statutes or the interpretation of those statutes.

All educational institutions should also continue to monitor cases in which plaintiffs assert Title IX claims for sexual-orientation discrimination. The most fertile ground for these assertions will be federal courts within the Seventh Circuit given the Hively decision, but courts nationwide could see increased attempts to raise this theory.