LEGAL UPDATE: SEXUAL ORIENTATION AND GENDER IDENTITY DISCRIMINATION
On June 15, 2020, the U.S. Supreme Court issued a decision in Bostock v. Clayton County, Georgia, holding that an employer who discriminates against an employee because of their gay or transgender status violates Title VII of the Civil Rights Act of 1964, which prohibits discrimination based on sex. The opinion, written by President Trump’s first Supreme Court appointee, Neil Gorsuch, helped resolve a split in opinions between federal courts. Let's take a closer look at the case.
The Bostock case represented three cases melded into one. The first case in New York involved a gay skydiving instructor allegedly terminated because of his sexual orientation. The second case in Georgia involved an employee terminated after joining a gay softball league. The third case, initially filed in the Eastern District of Michigan, arose from a transgender funeral home employee terminated after announcing an intent to live as a female. The three cases all focused on whether Title VII, which prohibits discrimination based on sex, protects individuals from discrimination based on sexual orientation or gender identity.
Justice Gorsuch reasoned that the prohibition against discrimination based on sex clearly protected employees who were discriminated against because of their sexual orientation or gender identity because “sex” is a broad term which is inextricably linked to gender identity and sexual orientation.
For employers, here are two key takeaways:
Update your employee handbook. Several years ago, the Michigan Department of Civil Rights (“MDCR”) signaled that it would investigate claims based on sexual orientation and gender identity discrimination. It indicated to employers that it was time to update employee handbooks and policies. The U.S. Supreme Court’s decision is an additional reminder. Employers must update their employee handbooks. A carefully crafted employee handbook will provide protection to ensure compliance with federal and state laws. An outdated employee handbook is more of a liability than an asset. A failure to update employment policies is an invitation to litigation.
Promptly investigate sexual orientation and gender identity discrimination claims. Now more than ever, when an employee makes a complaint alleging harassment or discrimination based on his or her gender identity or sexual orientation, promptly investigate the claim and, if issues are discovered, take quick remedial action. If necessary, retain outside counsel to protect the impartiality of the investigation. Employers who fail to implement more inclusive anti-discrimination policies stand a higher risk of investigation than ever before. The Federal Equal Employment Opportunity Commission (“EEOC”), the federal administrative agency charged with investigating discrimination, will likely be emboldened to take an even more aggressive stand on investigating Title VII claims alleging discrimination based on sexual orientation and gender identity. It’s better to perform your investigation before the EEOC or MDCR becomes involved. Such an investigation can help demonstrate to the MDCR, EEOC, or a court, that the employer acted reasonably and should not be held liable. The U.S. Supreme Court’s decision signals that failing to investigate discrimination based on sexual orientation or gender identity means employers face a dangerous risk of finding themselves in federal court.
Conclusion
For years, the Michigan Department of Civil Rights has indicated that it will process complaints alleging LGBT discrimination. While former Michigan Attorney General Bill Schuette took a strong stand against this, federal courts in Michigan were already moving to protect employees discriminated against because of their sexual orientation or transgender status. In other words, the U.S. Supreme Court overturned some federal decisions. But it confirmed case law and guidance, which had already gained traction in Michigan.
