On Tuesday, April 4, 2017, the U.S. Court of Appeals for the 7th Circuit ruled in Hively v. Ivy Tech Community College of Indiana1 that employment discrimination on the basis of sexual orientation is prohibited by Title VII of the Civil Rights Act of 1964 (“Title VII”).2 Title VII, on its face, makes it illegal for employers to discriminate on the basis of a person’s “race, color, religion, sex, or national origin.”3 In 2015, the U.S. Equal Employment Opportunity Commission (the “EEOC”) asserted that Title VII also covers sexual orientation discrimination. However, none of the federal courts of appeal had adopted that position. In fact, the 7th Circuit ruled in a previous case, Hamner v. St. Vincent Hospital & Health Care Center, Inc., in 2000 that Title VII did not apply to harassment based on sexual orientation. Therefore, this decision marks a stark departure from its precedent. The U.S. Supreme Court has yet to rule on this precise issue.

In overruling its own precedent, the 7th Circuit reasoned that “discrimination on the basis of sexual orientation is a form of sex discrimination,” and found that it is “actually impossible to discriminate on the basis of sexual orientation without discriminating on the basis of sex … .” This ruling represents a major victory for LGBTQ employees and advocates, but will likely go to the Supreme Court for review.

The 7th Circuit has jurisdiction over only Illinois, Indiana and Wisconsin, so employers in these states should review their company’s discrimination, harassment and retaliation policies and procedures to ensure their compliance with this recent decision. Employers in other states should keep in mind that many state and local laws already prohibit sexual orientation discrimination. Therefore, employers of all states should stay vigilant in reviewing and updating their policies, procedures and training materials, ensuring compliance with any applicable anti-discrimination laws, and monitoring new legal developments.