Avoiding Discrimination Claims After Obergefell

Labor & Employment Newsletter

Client Alert

In June 2015, the Supreme Court of the United States issued its long-awaited opinion in Obergefell v. Hodges, striking down bans on same-sex marriage as unconstitutional and legalizing same-sex marriage in every state (135 S. Ct. 2584, 2605 [2015]). The Court articulated that “the Nation’s traditions make clear that marriage is a keystone of the Nation’s social order… yet same-sex couples are denied the constellation of benefits that the States have linked to marriage."

Following Obergefell, employers must carefully consider the risk of a discrimination claim for exclusion based on sexual orientation. Although a state law discrimination claim relating to providing benefits to a same-sex spouse may be preempted by ERISA, employers should be aware that a number of states recognize a right of action for discrimination based on sexual orientation and gender identity (see American Civil Liberties Union, Non-Discrimination Laws: State by State Information, available at https://www.aclu.org/map/non-discrimination-laws-state-state-information-map ). Those states include Washington, Oregon, California, Nevada, Utah, Colorado, New Mexico, Hawaii, Minnesota, Iowa, Wisconsin, Illinois, New York, Vermont, New Hampshire, Maine, Massachusetts, Rhode Island, Connecticut, New Jersey, Delaware, Maryland, and Washington, D.C.

Although federal legislation (in 2015, the Equality Act and, before that, the Employment Non-Discrimination Act) has been introduced seeking to prohibit sexual orientation discrimination, current federal statutes do not explicitly recognize sexual orientation as grounds for a discrimination claim. Cautious employers, however, should proceed as though sexual orientation discrimination can form the basis of a Title VII or Section 1981 claim. Case law is well established that Title VII bars discrimination based on gender stereotyping in addition to biological sex (Price Waterhouse v. Hopkins, 490 U.S. 228, 235 [1989]; see also Glenn v. Brumby, 663 F.3d 1312, 1316 [11th Cir. 2011]; Smith v. City of Salem, 378 F.3d 566, 572 [6th Cir. 2004]; “The Supreme Court made clear that in the context of Title VII, discrimination because of ‘sex’ includes gender discrimination”). At least one court has reasoned that sexual orientation discrimination is “often, if not always, motivated by a desire to enforce heterosexually defined gender norms” ( Centola v. Potter, 183 F. Supp. 2d 403, 410 [D. Mass. 2002]).

Federal courts that have addressed the issue are split on whether sexual orientation or gender identity discrimination is prohibited under Title VII’s ban on sex discrimination. A number of federal district courts have recognized sexual orientation discrimination as illegal sex-based discrimination. In Hall v. BNSF Railway Company, a Washington district court found that the plaintiff, a male married to another male, alleged sex discrimination when he claimed he was denied the spousal health benefit due to sex, where similarly situated females with male spouses enjoyed the benefit (No. 13-2160, 2014 WL 4719007, at *2 [W.D. Wash. Sept. 22, 2014]; denying in part defendant’s motion to dismiss for failure to state a claim). Similarly, an Oregon district court reasoned that one way to analyze a Title VII claim “is to inquire whether the harasser would have acted the same if the gender of the victim had been different” (Heller v. Columbia Edgewater Country Club, 195 F. Supp. 2d 1212, 1223 [D. Or. 2002]; denying defendant’s motion for summary judgment).

Other courts, however, have expressly declined to recognize sexual orientation-based adverse employment actions as a potential form of sex discrimination (see Dawson v. Bumble & Bumble, 398 F.3d 211, 217 [2d Cir. 2005]; affirming district court’s summary judgment in favor of defendant; Bibby v. Philadelphia Coca Cola Bottling Co., 260 F.3d 257, 264 [3d Cir. 2001]; affirming summary judgment in favor of defendant).

The Equal Employment Opportunity Commission (EEOC) recently held that sexual orientation discrimination falls under sex-based discrimination ( Complainant v. Anthony Foxx, Secretary, Dept. of Transportation [Federal Aviation Administration] Agency, Appeal No. 0120133080, Agency No. 2012-24738-FAA-03). On July 17, 2015, the EEOC held that a complainant sufficiently alleged that he was not selected for a front line manager for the Air Traffic Control Tower at the Miami Airport on the basis of his sex and sexual orientation. The complainant claimed his supervisor made comments about his sexual orientation, specifically asking that he not discuss his male partner. The holding recognized:

When an employee raises a claim of sexual orientation discrimination as sex discrimination under Title VII, the question is not whether sexual orientation is explicitly listed in Title VII as a prohibited basis for employment actions. It is not. Rather, the question for purposes of Title VII coverage of a sexual orientation claim is the same as any other Title VII case involving allegations of sex discrimination—whether the [employer] has ‘relied on sex-based considerations’ or ‘taken gender into account’ when taking the challenged employment action.

The Obergefell decision will likely trigger additional litigation asserting claims of discrimination based on sexual orientation. In July 2015, a Wal-Mart employee brought suit in Massachusetts federal court claiming that the company was required to provide insurance in 2012 to her same-sex spouse who had substantial medical debt due to her cancer treatment (Cote v. Wal-Mart Stores, Inc., No. 1:15-cv-12945-WGY, filed July 14, 2015, at 5-11). The Cote plaintiff asserts claims under Title VII, the Equal Pay Act, and the Massachusetts Fair Employment Practices Law, which explicitly prohibits discrimination based on sexual orientation. The putative class action seeks to represent current and former Wal-Mart employees who were in lawful same-sex marriages but were denied spousal health insurance benefits prior to January 1, 2014 (Wal-Mart began offering domestic partnership benefits in January 2014). The plaintiff asserts that the denial of health insurance to her same-sex spouse, and those of other employees, amounts to sex-based discrimination. Employers should keep an eye on this case as guidance on how courts may treat benefits entitlement and sexual orientation-based sex discrimination claims post-Obergefell.

Although the Supreme Court has not considered whether sexual orientation falls under the purview of sex-based discrimination, the trend in Supreme Court jurisprudence has been to extend recognition of rights to same-sex couples. The Court is thus likely to recognize sexual orientation as a potential basis for sex discrimination, if legislation does not first render sexual orientation a stand-alone protected category. The safest practice for employers is to avoid treating any employee differently based on sexual orientation and avoid being a test case on the issue.