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Landmark Federal Appeals Ruling Holds Sexual Orientation Discrimination Violates Title VII

Posted on: April 5th, 2017 by Art Leonard No Comments

The full bench of the U.S. Court of Appeals for the 7th Circuit, based in Chicago, substantially advanced the cause of gay rights on April 4, releasing an unprecedented decision in Kimberly Hively v. Ivy Tech Community College, 2017 WL 1230393, holding that Title VII of the Civil Rights Act of 1964, which applies generally to all employers with fifteen or more employees as well as many federal, state and local government operations, prohibits discriminating against a person because of their sexual orientation.  The text of the statute does not mention sexual orientation, so the interpretive question for the court was whether discriminating against somebody because they are lesbian, gay or bisexual can be considered a form of sex discrimination.

What was particularly amazing about the affirmative decision, the first to rule this way by a federal appeals court, was that the 7th Circuit is composed overwhelmingly of Republican appointees, many of whom were appointed as long ago as the Reagan Administration.  Although the lead opinion for the Circuit was written by Chief Judge Diane Pamela Wood, who was appointed by Bill Clinton, the 8-member majority of the 11-judge bench included more Republicans than Democrats.  Many of the judges in the majority could be generally characterized as judicial conservatives.

Wood’s opinion was joined by Frank Easterbrook (Reagan appointee), Ilana Rovner (George H. W. Bush appointee), Ann Claire Williams (Clinton appointee), and David F. Hamilton (the only Obama appointee on the Circuit). Richard Posner (Reagan appointee) wrote a concurring opinion.  Joel Martin Flaum (Reagan appointee) wrote a concurring opinion which was joined by Kenneth Francis Ripple (Reagan appointee).  The dissent by Diane S. Sykes (George W. Bush appointee) was joined by Michael Stephen Kanne (Reagan appointee) and William Joseph Bauer (Ford appointee).  Ripple and Bauer are senior judges who were sitting on the en banc hearing because they were part of the three-judge panel (with Judge Rovner) that ruled on the case last year.  The Circuit has 11 authorized positions, but there are two vacancies among the active judges, part of the Republican Senate’s legacy of refusing to confirm most of President Obama’s judicial appointees during his second term.

The Circuit’s decision to grant en banc review clearly signaled a desire to reconsider the issue, which Judge Rovner had called for doing in her panel opinion. Rovner then made a persuasive case that changes in the law since the 7th Circuit had previously ruled negatively on the question called out for reconsideration.  Those who attended the oral argument on November 30 or listened to the recording on the court’s website generally agreed that the circuit was likely to overrule its old precedents, the only mystery being who would write the opinion, what theories they would use, and who would dissent.

The lawsuit was filed by Kimberly Hively, a lesbian who was working as an adjunct professor at the college, which is located in South Bend, Indiana. Despite years of successful teaching, her attempts to secure a full-time tenure-track position were continually frustrated and finally her contract was not renewed under circumstances that led her to believe it was because of her sexual orientation.  Since Indiana’s state law does not forbid sexual orientation discrimination, and South Bend’s ordinance (which does forbid sexual orientation discrimination) would not apply to the state college, she filed suit in federal court under Title VII.  She represented herself at that stage.  The trial judge, Rudy Lozano, granted the college’s motion to dismiss the case on the ground that 7th Circuit precedents exclude sexual orientation discrimination claims under Title VII.

Hively obtained representation from Lambda Legal on appeal. The three-judge panel rejected her appeal, while two of the judges urged that the precedents be reconsidered.

Judge Wood found that several key Supreme Court decisions have broadened the meaning of “because of sex” in Title VII, to the extent that she could write that “in the years since 1964, Title VII has been understood to cover far more than the simple decision of an employer not to hire a woman for Job A, or a man for Job B.” The broadening includes launching a complex law of sexual harassment, including same-sex sexual harassment, and discrimination against a person who fails to conform to “a certain set of gender stereotypes.”

As have many of the other judges who have written on this issue, Wood quoted from Justice Antonin Scalia’s opinion for the unanimous court in Oncale v. Sundowner Offshore Services, Inc., 523 U.S. 75 (1998), the same-sex harassment case, in which, after noting that “male-on-male sexual harassment in the workplace was assuredly not the principal evil Congress was concerned with when it enacted Title VII,” this did not mean that the statute could not be interpreted to apply to such a situation. “But statutory prohibitions often go beyond the principal evil to cover reasonably comparable evils,” Scalia wrote, “and it is ultimately the provisions of our laws rather than the principal concerns of our legislators by which we are governed.”

Woods found convincing Hively’s contention, argued to the court by Lambda Legal’s Greg Nevins, that two alternative theories would support her claim. The first follows a “comparative method in which we attempt to isolate the significance of the plaintiff’s sex to the employer’s decision: has she described a situation in which, holding all other things constant and changing only her sex, she would have been treated the same way?”  The second rests on an intimate association claim, relying on the Supreme Court’s 1967 ruling striking down state laws barring interracial marriages, Loving v. Virginia.  The Supreme Court held that a ban on interracial marriage was a form of race discrimination, because the state was taking race in account in deciding whom somebody could marry.  Similarly here, an employer is taking sex into account when discriminating against somebody because they associate intimately with members of the same sex.  After briefly describing these two theories, Wood wrote, “Although the analysis differs somewhat, both avenues end up in the same place: sex discrimination.”

Woods noted at least two rulings by other circuits under Title VII that had adapted Loving’s interracial marriage analysis to an employment setting, finding race discrimination where an employer discriminated against persons who were in interracial relationships, Parr v. Woodmen of the World Life Insurance Co., 791 F.2 888 (11th Cir. 1986), and Holcomb v. Iona College, 521 F.3d 130 (2nd Cir. 2008).  These citations were a bit ironic, since the 11th and 2nd Circuits have in recent weeks rejected sexual orientation discrimination claims under Title VII, in which the plaintiffs advanced the same analogy to support their Title VII claims.  These recent opinions were by three-judge panels that held themselves to be bound by prior circuit rulings.  Lambda Legal has already filed a petition for en banc review in the 11th Circuit case, and counsel for plaintiff in the 2nd Circuit case is thinking about doing the same.

Ultimately, Wood acknowledged, “It would require considerable calisthenics to remove the ‘sex’ from ‘sexual orientation.’ The effort to do so has led to confusing and contradictory results, as our panel opinion illustrated so well.  The EEOC concluded, in its Baldwin decision, that such an effort cannot be reconciled with the straightforward language of Title VII.  Many district courts have come to the same conclusion.  Many other courts have found that gender identity claims are cognizable under Title VII.”

Woods recited the now well-worn argument about how it is a basic inconsistency in the law that a person can enter into a same-sex marriage on Saturday and then be fired without legal recourse for having done so when they show up at the workplace on Monday. That is still the state of the law in a majority of the states.

Wood acknowledged that this decision does not end the case. Because Hively’s original complaint was dismissed by the district court without a trial, she has not yet been put to the test of proving that her sexual orientation was a motivating factor in the college’s decision not to hire her or renew her adjunct contract.  And, what passed unspoken, the college might decide to petition the Supreme Court to review this ruling, although the immediate reaction of a college spokesperson was that the school – which has its own sexual orientation non-discrimination policy – denies that it discriminated against Hively, and is ready to take its chances at trial.

Judge Posner submitted a rather odd concurring opinion, perhaps reflecting the oddity of some of his comments during oral argument, including the stunning question posed to the college’s lawyer: “Why are there lesbians?” Posner, appointed by Reagan as an economic conservative and social libertarian, has evolved into a forceful advocate for LGBT rights, having satisfied himself that genetics and biology play a large part in determining sexual identity and that it is basically unfair to discriminate against LGBT people without justification.  He wrote the Circuit’s decision striking down bans on same-sex marriage in Indiana and Wisconsin in 2014.

In this opinion, he takes on the contention that it is improper for the court to purport to “interpret” the language adopted by Congress in 1964 to cover sexual orientation discrimination. After reviewing various models of statutory interpretation, he insisted that “interpretation can mean giving a fresh meaning to a statement (which can be a statement found in a constitutional or statutory text) – a meaning that infuses the statement with vitality and significance today.”  He used as his prime example judicial interpretation of the Sherman Antitrust Act of 1890, adopted “long before there was a sophisticated understanding of the economics of monopoly and competition.”  As a result of changing times and new knowledge, he observed, “for more than thirty years the Act has been interpreted in conformity to the modern, not the nineteenth-century, understanding of the relevant economics.” Basically, the courts have “updated” the Act in order to keep it relevant to the present.

He argued that the same approach should be brought to interpreting Title VII, adopted more than half a century ago. This old law “invites an interpretation that will update it to the present, a present that differs markedly from the era in which the Act was enacted.”  And, after reviewing the revolution in understanding of human sexuality and public opinion about it, he concluded it was time to update Title VII to cover sexual orientation claims, even though “it is well-nigh certain that homosexuality, male or female, did not figure in the minds of the legislators who enacted Title VII.”  Although some of the history he then recites might arouse some quibbles, he was able to summon some pointed examples of Justice Scalia employing this method in his interpretation of the Constitution regarding, for example, flag-burning and an individual right to bear arms.

“Nothing has changed more in the decades since the enactment of the statute than attitudes toward sex,” wrote Posner, going on to recite the litigation history of the struggle for marriage equality that culminated in 2015 with the Supreme Court’s ruling in Obergefell v. Hodges.

Although it might sound odd at times as a judicial opinion, Posner’s concurrence is eminently readable and packed full of interesting information, including his list of “homosexual men and women (and also bisexuals, defined as having both homosexual and heterosexual orientations)” who have made “many outstanding intellectual and cultural contributions to society (think for example of Tchaikovsky, Oscar Wilde, Jane Addams, Andre Gide, Thomas Mann, Marlene Dietrich, Bayard Rustin, Alan Turing, Alec Guinness, Leonard Bernstein, Van Cliburn, and James Baldwin – a very partial list).”

This brought to the writer’s mind a famous paragraph in Supreme Court Justice Harry Blackmun’s opinion rejecting a challenge to the traditional anti-trust exemption for professional baseball, in which Blackmun included his own list of the greatest professional baseball players in history (compiled through a survey of the Supreme Court’s members and their young legal clerks).

Instead of pursuing Judge Wood’s line of reasoning, Posner was ready to declare that sexual orientation discrimination is a form of sex discrimination without such detailed analysis. “The most tenable and straightforward ground for deciding in favor of Hively is that while in 1964 sex discrimination meant discrimination against men or women as such and not against subsets of men or women such as effeminate men or mannish women, the concept of sex discrimination has since broadened in light of the recognition, which barely existed in 1964, that there are significant numbers of both men and women who have a sexual orientation that sets them apart from the heterosexual members of their genetic sex (male or female), and that while they constitute a minority their sexual orientation is not evil and does not threaten society.  Title VII in terms forbids only sex discrimination, but we now understand discrimination against homosexual men and women to be a form of sex discrimination; and to paraphrase [Oliver Wendell Holmes, Jr.], ‘We must consider what this country has become in deciding what that [statute] has reserved.’”

In his concurring opinion Judge Flaum took a narrower approach, noting that Title VII was amended in 1991 to provide that “an unlawful employment practice is established when the complaining party demonstrates that … sex … was a motivating factor for any employment practice, even though other factors also motivated the practice.” In other words, discrimination does not have to be “solely” because of sex to violate Title VII.  It is enough if the individual’s sex was part of the reason for the discrimination.  In light of this, Flaum (and Ripple, who joined his opinion) would look to the analogy with discrimination against employees in interracial relationships.  In addition, he noted, “One cannot consider a person’s homosexuality without also accounting for their sex: doing so would render ‘same’ and ‘own’ meaningless” in dictionary definitions that define homosexuality in terms of  whether somebody is attracted to persons of “the same” or “their own” sex.  Clearly, “sex” is involved when people are discriminated against because they are gay.

Judge Sykes’s dissent channeled scores of cases going back to the early years of Title VII and argued against the method of statutory interpretation used by the various opinions making up the majority. “The question before the en banc court is one of statutory interpretation,” she wrote.  “The majority deploys a judge-empowering, common-law decision method that leaves a great deal of room for judicial discretion.  So does Judge Posner in his concurrence.  Neither is faithful to the statutory text, read fairly, as a reasonable person would have understood it when it was adopted.  The result is a statutory amendment courtesy of unelected judges.  Judge Posner admits this; he embraces and argues for this conception of judicial power.  The majority does not, preferring instead to smuggle in the statutory amendment under cover of an aggressive reading of loosely related Supreme Court precedents.  Either way, the result is the same: the circumvention of the legislative process by which the people govern themselves.”

Although Sykes conceded that sexual orientation discrimination is wrong, she was not ready to concede that one could find it illegal by interpretation of a 1964 statute prohibiting sex discrimination at a time when the legislature could not possibly have been intending to ban discrimination against LGBT people. As Posner pointed out, that issue wasn’t on the radar in 1964.  Thus, to Sykes, Bauer and Kanne, it was not legitimate for a court to read this into the statute under the guise of “interpretation.”

Speculating about the ultimate fate of this decision could go endlessly on. There are fierce debates within the judiciary about acceptable methods of interpreting statutes, and various theories about how to deal with aging statutes that are out of sync with modern understandings.

Posner’s argument for judicial updating allows for the possibility that if Congress disagrees with what a court has done, it can step in and amend the statute, as Congress has frequently amended Title VII to overrule Supreme Court interpretations with which it disagreed. (For example, Congress overruled the Supreme Court’s decision that discrimination against pregnant women was not sex discrimination in violation of Title VII.)  Posner’s approach will be familiar to those who have read the influential 1982 book by then-Professor (now 2nd Circuit Judge) Guido Calabresi, “A Common Law for the Age of Statutes,” suggesting that courts deal with the problem of ancient statutes and legislative inertia by “updating” statutes through interpretation to deal with contemporary problems, leaving it to the legislature to overrule the courts if they disagree.  This method is more generally accepted in other common law countries (British Commonwealth nations), such as Australia, South Africa, India and Canada, than in the United States, but it clearly appeals to Posner as eminently practical.

So far the Republican majorities in Congress have not been motivated to address this issue through amendments to Title VII, or to advance the Equality Act, introduced during Obama’s second term, which would amend all federal sex discrimination laws to address sexual orientation and gender identity explicitly. Perhaps they will be provoked to act, however, if the question gets up to the Supreme Court and the 7th Circuit’s view prevails.

With the possibility of appeals now arising from three different circuits with different views of the issue, Supreme Court consideration of this question is highly likely. Public opinion polls generally show overwhelming support for prohibiting sexual orientation and gender identity discrimination in the workplace, which might serve as a brake on conservative legislators who would otherwise respond adversely to a Supreme Court ruling approving the 7th Circuit’s holding.

Federal Court Lets Transgender Employee Sue Employer for Transition Benefits Denial Under Title VII

Posted on: January 17th, 2017 by Art Leonard No Comments

Does a transgender employee who seeks coverage under her employer’s benefits plans for breast augmentation surgery have a legal remedy if her claims are denied? U.S. District Judge Sidney A. Fitzwater ruled on January 13 that a transgender woman employed by L-3 Communications Integrated Systems (L-3) may pursue a sex discrimination claim under Title VII of the Civil Rights Act of 1964, having alleged that she was denied such benefits because of her gender, but not under the anti-discrimination provision of the Affordable Care Act (ACA). Baker v. Aetna Life Insurance Company, 2017 U.S. Dist. LEXIS 5665, 2017 WL 131658 (N.D. Tex.).

Judge Fitzwater rejected discrimination claims against the insurance company that provides the coverage and administers the plans on behalf of the employer, finding that the ACA and President Obama’s Executive Order governing gender identity discrimination by federal contractors do not apply to this situation, and that the insurance company cannot be sued under Title VII because it is not the plaintiff’s employer. Judge Fitzwater declined to grant motions for summary judgment by either the employee or by the insurer of her claim that denial of health and short-term disability benefits violates her rights under the terms of the employee benefits plan, setting that claim down for further proceedings.

According to her Complaint filed in the U.S. District Court for the Northern District of Texas in Dallas, Charlize Marie Baker is an employee of L-3 and a participant in the company’s Health Plan and its Short-Term-Disability (STD) Plan, both of which are administered by Aetna Life Insurance Company. She began the process of transitioning in 2011, obtained a legal name change, and had her gender designation changed from male to female on all government-issued documents.  She scheduled breast implant surgery in 2015 after her doctor determined that it was medically necessary to treat her gender dysphoria.

Baker filed claims for coverage of the surgery under the Health Plan and coverage of her recovery period under the STD Plan.  She alleges that the Health Plan denied her claim to cover the surgery, because “the plan does not cover breast implants for individuals with a male birth gender designation who are transitioning to the female gender, although the plan covers individuals with a female birth designation who are transitioning to the male gender and seeking a mastectomy.”  Presumably the mastectomy would be routinely covered because the Health Plan is accustomed to covering mastectomies for female employees when their doctors state that the procedure is medically necessary.   Baker was denied STD benefits because the Plan administrator decided that surgery to treat Gender Dysphoria does not qualify as “treatment of an illness.”

In his January 13 ruling, Judge Fitzwater focused on motions by L-3 and Aetna to dismiss discrimination claims brought under Section 1557 of the ACA, the Employee Retirement Income Security Act (ERISA), and Title VII of the Civil Rights Act of 1964. Section 1557 of the ACA incorporates by reference Title IX of the Education Amendments Act of 1972, which prohibits discrimination “because of sex.”  ERISA has its own non-discrimination provision, but does not specifically ban discrimination “because of sex.”  The ERISA provision broadly prohibits discriminating against an employee to prevent them from getting benefits to which they are entitled under an employee benefit plan.  ERISA provides a vehicle for employees to sue plan administrators for the wrongful denial of benefits to which they are entitled under employee benefit plans.

None of the statutes under which Baker filed her claims explicitly prohibits discrimination because of gender identity. In resisting the motions to dismiss, she relied heavily on a regulation published by the Department of Health and Human Services last spring, providing that Section 1557 of the ACA bans discrimination because of gender identity by insurers and health care providers, tracking interpretations of Title IX by the Department of Education and the Justice Department, which in turn relied on interpretations of Title VII by some federal courts and the Equal Employment Opportunity Commission (EEOC).

Baker also relied on President Obama’s Executive Order 13672, which bans gender identity discrimination by federal contractors. Noting that L-3 is a federal contractor, Baker’s attorneys, Michael J. Hindman and Kasey Cathryn Krummel of Hindman/Bynum PC, urged the court to make “a good faith extension of existing law that the discrimination by Defendants based on her Gender Identity is also discrimination in violation of ERISA in this context and that ERISA must be read to include the prohibition of discrimination based on gender identity.”

“Baker is unable to point to any controlling precedent that recognizes a cause of action under Section 1557 [of the ACA] for discrimination based on gender identity,” wrote the judge. For one thing, he pointed out, the HHS regulation on point was to become effective on January 1, 2017, long after Baker was denied benefits, and thus was not applicable at the time of Aetna’s decision to deny the claims, and furthermore, one of Judge Fitzwater’s colleagues on the Northern District of Texas bench, Judge Reed O’Connor, has issued two rulings rejecting the argument that Title IX, which is the source of the ACA non-discrimination policy regarding sex, should be “construed broadly to protect any person, including transgendered persons, from discrimination.”

On August 21, 2016, Judge O’Connor issued a preliminary injunction against the enforcement of Title IX by the federal government in gender identity cases, and he issued a similar preliminary injunction on December 31, 2016, against the enforcement of the HHS regulation in gender identity cases under the ACA. The government appealed the August 21 ruling to the 5th Circuit Court of Appeals in Houston, and announced it would similarly appeal the December 31 ruling.  Whether those appeals will be pursued or dropped after the change of administration on January 20 is a decision for the new attorney general and secretaries of education and health.  In both of those cases, O’Connor concluded that the plaintiffs were likely to prevail on their claim that Title IX (and by extension the ACA) does not ban gender identity discrimination.

Many federal courts are grappling with the question whether federal laws and regulations banning discrimination “because of sex” should apply to gender identity or sexual orientation discrimination, but there is no consensus yet among the appellate courts. The Supreme Court has a case pending on the gender identity issue under Title IX, but it has yet to be scheduled for argument.  The closest the appeals courts have come are decisions finding that “sex stereotyping” violates Title VII and perhaps by extension other sex discrimination laws, based on a 1989 ruling by the Supreme Court in Price Waterhouse v. Hopkins.  Some courts have used the “sex stereotyping” theory to protect transgender employees in Title VII cases.  However, Judge Fitzwater was correct in observing that as of now there is no “controlling precedent” supporting Baker’s claim that gender identity discrimination, as such, violates Section 1557 of the ACA.  For this judge, a “controlling precedent” would be one coming from the 5th Circuit, which has appellate jurisdiction over federal trial courts in Texas, or the Supreme Court, and expressly addressing the issue.

Baker sought to argue that “the ‘effect’ of E.O. 13672 seems to be little more than to clarify the issue left somewhat ambiguous in Section 1557 that discrimination against transgender persons under this law is prohibited.” She argued that when the ACA was enacted in 2010, some courts had already relied on Price Waterhouse v. Hopkins to find gender identity discrimination covered by Title VII.

Fitzwater found “two fallacies” in this argument. “First,” he wrote, “the Fifth Circuit has not extended Hopkins’ Title VII reasoning to apply to any statute referenced in Section 1557,” and cited Judge O’Connor’s August 21 ruling in support of this point.  “Second, Baker is relying on an Executive Order to clarify what she characterizes as a ‘somewhat ambiguous’ legislative act.”  This was not enough to satisfy Fitzwater, who granted the motions to dismiss the ACA discrimination claim.

Aetna also moved to dismiss Baker’s ERISA claim, contending that ERISA does not ban gender identity discrimination in the administration of employee benefit plans. Fitzwater agreed with Aetna, finding that “as Baker acknowledges, this claim is not currently recognized.  It is for the Congress, not this court, to decide whether to create in ERISA a protection that the statute does not already provide.”  And because the court had already rejected her argument under Section 1557, it would not rely on that ACA provision as a basis for finding a right under ERISA.

Turning finally to the motions to dismiss the Title VII claim, Judge Fitzwater rejected Baker’s argument that Aetna should be liable to suit for sex discrimination under Title VII as an “agent” of L-3 in administering the benefits plans. Fitzwater pointed to 5th Circuit precedents holding that Title VII does not apply in the absence of an employer-employee relationship.  Baker argued that in the EEOC Compliance Manual there is a suggestion that an insurance company administering an employer’s benefit plans is acting as the employer’s agent, “but the EEOC Compliance Manual does not have the force of law,” wrote Fitzwater.  “And this circuit recognizes an agency theory of employer liability only if the alleged agent had authority ‘with respect to employment practices,’” which Baker did not allege.

However, at long last Fitzwater reached the only claim that he refused to dismiss in this opinion: Baker’s allegation that the denial of coverage for her surgery and recovery period under the benefits plans provided by her employer constituted sex discrimination by the employer in violation of Title VII. L-3 argued that Baker had failed to allege that she suffered an adverse employment action based on her gender, but, wrote Fitzwater, “The Court disagrees.”

“Baker plausibly alleges that she was denied employment benefits based on her sex,” he wrote. “She asserts that L-3 ‘engaged in intentional gender discrimination in the terms and conditions of employment by denying her a medically necessary procedure based solely on her gender,’” that the company’s “conduct constitutes a deliberate and intentional violation of Title VII,” and that this conduct “has cause [her] to suffer the loss of pay, benefits, and prestige.”  This was enough, concluded Fitzwater, to allow her Title VII claim against her employer to continue.  Interestingly, his opinion does not explore explicitly whether Title VII applies to gender identity discrimination claims as such, and makes no mention of the EEOC’s 2012 decision to that effect, choosing to treat this as purely a sex discrimination, presumably on the basis that Baker would have been covered for the procedure had she been identified female at birth, so clearly in that sense the denial was because of her sex.

Thus, at this point Baker continues to have a claim under ERISA against Aetna, based on her allegation that Aetna’s refusal to cover her procedure and recovery period violated the terms of the benefits plans, and a sex discrimination claim under Title VII against her employer, based on her allegation that the employer’s benefit plan discriminated against her because of her sex.

Federal Trial Courts Divided Over Title VII Sexual Orientation Discrimination Claims

Posted on: June 21st, 2016 by Art Leonard No Comments

Last July the Equal Employment Opportunity Commission (EEOC), reversing its position dating back fifty years, issued a ruling that a gay man could charge a federal agency employer with sex discrimination in violation of Title VII of the Civil Rights Act of 1964 for denying a promotion because of his sexual orientation. The Baldwin v. Foxx decision is an administrative ruling, not binding on federal courts, and federal trial judges are sharply divided on the issue.

During May and June, federal district judges in Virginia, New York, Illinois, Mississippi and Florida issued rulings in response to employers’ motions to dismiss Title VII claims of sexual orientation discrimination.  In each case, the employer argued that the plaintiff’s Title VII claim had to be dismissed as a matter of law because the federal employment discrimination statute does not forbid sexual orientation discrimination.

Title VII was enacted as part of the Civil Rights Act of 1964. Although the House committee considering the bill took evidence about sex discrimination, it decided to send the bill to the House floor without including “sex” as a prohibited basis for discrimination, because this was deemed  too controversial and might sink the bill. During the floor debate, however, a southern representative, Howard Smith of Virginia, a conservative Democrat who was opposed to the proposed ban on race discrimination, proposed an amendment to add “sex” to the list of prohibited grounds.  Most historical accounts suggest that Smith’s strategy was to make the bill more controversial, thus ensuring its defeat.  More recent accounts have suggested that Smith, although a racist, was actually a supporter of equal rights for women and genuinely believed that sex discrimination in the workplace should be banned.  (His amendment did not add “sex” to the other titles of the bill addressing other kinds of discrimination.)  The amendment passed, and ultimately the bill was enacted, going into effect in July 1965.

Because “sex” was added through a House floor amendment, the Committee Report on the bill says nothing about it, and the subsequent debate in the Senate (where the bill went directly to the floor, bypassing committee consideration) devoted little attention to it, apart from an amendment providing that pay practices “authorized” by the Equal Pay Act of 1963 would not be outlawed by Title VII. As a result, the “legislative history” of Title VII provides no explanation about what Congress intended by including “sex” as a prohibited ground of discrimination.

During the first quarter century of Title VII, the EEOC and the federal courts consistently rejected claims that the law outlawed sexual orientation discrimination. In the absence of explanatory legislative history, they ruled that Congress must have intended simply  to prohibit discrimination against women because they are women or against men because they are men, and nothing more complicated or nuanced than that.  This interpretation was challenged in 1989, when the Supreme Court ruled in Price Waterhouse v. Hopkins that a woman who failed to conform to her employer’s sex stereotypes could bring a sex discrimination case under Title VII, adopting a broader and more sophisticated view of sex discrimination.

Since 1989, some lower federal courts have used the Price Waterhouse ruling to allow gay or transgender plaintiffs to assert sex discrimination claims in reliance on the sex stereotype theory, while others have rejected attempt to “bootstrap” sexual orientation or gender identity into Title VII in this way.   More recently, several federal appeals courts have endorsed the idea that gender identity discrimination claims are really sex discrimination claims, and a consensus to that effect has begun to emerge, but progress has been slower on the sexual orientation front.

Last summer the EEOC’s decision in Baldwin v. Foxx presented a startling turnabout of the agency’s view. The EEOC does not adjudicate discrimination claims against non-governmental and state employers, but it is assigned an appellate role concerning discrimination claims by federal employees.  In Baldwin v. Foxx, the EEOC reversed a ruling by the Transportation Department that a gay air traffic controller could not bring a sexual orientation discrimination claim under Title VII.  Looking at the developing federal case law since Price Waterhouse and seizing upon a handful of federal district court decisions that had allowed gay plaintiffs to bring sex discrimination claims under a sex stereotype theory, the agency concluded that a sexual orientation discrimination claim is “necessarily” a sex discrimination claim and should be allowed under Title VII.

Since that July 15 ruling, many federal district judges have had to rule on motions by employers to dismiss Title VII sexual orientation discrimination claims. The precedential hierarchy of the federal court system has required some of them to dismiss those claims because the circuit court of appeals to which their rulings could be appealed had previously ruled adversely on the issue.  In other circuits, however, the question is open and some judges have taken the EEOC’s lead.

On May 5, U.S. District Judge Robert E. Payne in Virginia found that he was bound by 4th Circuit precedent to reject a sexual orientation discrimination claim under Title VII, even though the plaintiff, an openly-gay administrative assistant at Virginia Union University, had alleged clear evidence of anti-gay discrimination by the university president.  Judge Payne found that a 1996 decision by the 4th Circuit, Wrightson v. Pizza Hut of America, was still binding.  Payne noted that other federal trial courts were divided about whether to defer to the EEOC’s Baldwin ruling, but in any event he felt bound by circuit precedent to dismiss the claim.

A district judge on Long Island, Sandra J. Feuerstein, reached a similar result in Magnusson v. County of Suffolk on May 17, dismissing a Title VII claim by an openly-lesbian custodial worker at the Suffolk County Department of Public Works, who alleged that her failure to comply with her supervisors’ stereotypes of how women should dress had led to discrimination against her. Relying on prior decisions by the New York City-based 2nd Circuit Court of Appeals, Judge Feuerstein refrained from discussing more recent developments and dismissed the claim, asserting that the plaintiff’s “claims regarding incidents of harassment based on her sexual orientation do not give rise to Title VII liability.”

However, on May 31, a senior district judge in Illinois decided that prudence in light of the developing situation counseled against dismissing a pending “perceived sexual orientation” claim in the case of Matavka v. Board of Education. Judge Milton I. Shadur confronted the school district’s motion to dismiss a discrimination claim by  an employee at J. Sterling Morton High School, who alleged that “he experienced severe harassment from his coworkers and supervisors, including taunts that he was ‘gay’ and should ‘suck it,’ frequent jokes about his perceived homosexuality, and hacking of his Facebook account to identify him publicly as ‘interested in boys and men’, and an email stating ‘U. . . are homosexual.’”  Judge Shadur observed that the Chicago-based 7th Circuit Court of Appeals had in the past rejected sexual orientation discrimination claims under Title VII, which “would appear to bury” Matavka’s Title VII claim.  But, he noted, Baldwin v. Foxx, while not binding on the court, may prompt a rethinking of this issue, and that the 7th Circuit heard oral argument on September 30 of a plaintiff’s appeal from a different federal trial judge’s dismissal of a sexual orientation discrimination claim in the case of Hively v. Ivy Tech Community College.  “Should Hively follow recent district court decisions in finding Baldwin persuasive,” he wrote, “that finding plainly would affect the disposition of Morton High’s motion.  That being so, the prudent course at present is to stay this matter pending the issuance of a decision in Hively.”

The 7th Circuit has not issued a decision in Hively as of this writing.  Judge Shadur stayed a ruling on the motion until July 29, and said that if the 7th Circuit had not issued a ruling by then, he might stay it further.

The federal appeals courts are not bound by any rules about how soon after oral argument they must issue opinions. Sometimes the 7th Circuit moves quickly.  During 2014 it took just a week after the August 26 oral argument to rule affirmatively on a marriage equality case on September 4, giving the states of Wisconsin and Indiana time to petition the Supreme Court for review before the start of the Court’s October term.  The panel that heard the Hively argument has not ruled in more than eight months, suggesting that an extended internal discussion may be happening among the nine active judges of the 7th Circuit, to whom the panel’s proposed opinion would be circulated before it is released.  Panels may not depart from circuit precedent, but a majority of the active judges on the circuit can overrule their past decisions.  A 7th Circuit ruling reversing the district court’s dismissal of the Hively complaint would be a major breakthrough for Title VII coverage of sexual orientation claims.

Meanwhile, two decisions issued in June have taken opposite views on the question. In Brown v. Subway Sandwich Shop of Laurel, U.S. District Judge Keith Starrett of the Southern District of Mississippi bowed to prior 5th Circuit rulings rejecting sexual orientation claims under Title VII, and he even claimed, somewhat disingenuously, that the EEOC’s Baldwin decision did not support the plaintiff’s claim, stating that Baldwin “takes no position on the merits of the claim and resolves only timeliness and jurisdictional issues.”  While this may appear to be technically true, since the EEOC was ruling on an appeal from the Transportation Department’s dismissal of the claim and not ultimately on the merits, on the other hand the EEOC definitely did take a “position” on the question whether sexual orientation discrimination claims are covered by Title VII; it had to address this question in order to determine that it had jurisdiction over the claim.  The EEOC clearly stated in Baldwin that sexual orientation discrimination claims are “necessarily” sex discrimination claims.

By contrast, U.S. District Judge Mark E. Walker of the Northern District of Florida, finding that the 11th Circuit Court of Appeals has not issued a precedential ruling on the question, refused to dismiss a “perceived sexual orientation” discrimination claim in Winstead v. Lafayette County Board of County Commissioners on June 20.  Pointing out that the 11th Circuit had ruled in 2011 in Glenn v. Brumby that a gender identity discrimination claim could be considered a sex discrimination claim under the Equal Protection Clause using a sex stereotyping theory, Judge Walker found that the Baldwin ruling, which also discussed sex stereotyping as a basis for a sexual orientation claim, was persuasive and should be followed.

Judge Walker rejected the argument made by some courts that using the stereotyping theory for this purpose was inappropriately “bootstrapping” claims of sexual orientation discrimination under Title VII. “These arguments seem to this Court to misapprehend the nature of animus towards people based on their sexual orientation, actual or perceived,” he wrote.  “Such animus, whatever its origin, is at its core based on disapproval of certain behaviors (real or assumed) and tendencies towards behaviors, and those behaviors are disapproved of precisely because they are deemed to be ‘inappropriate’ for members of a certain sex or gender.”

He concluded: “This view – that discrimination on the basis of sexual orientation is necessarily discrimination based on gender or sex stereotypes, and is therefore sex discrimination – is persuasive to this Court, as it has been to numerous other courts and the EEOC.” He also contended that it “follows naturally from (though it is not compelled by) Brumby, which is binding Eleventh Circuit precedent.  Simply put, to treat someone differently based on her attraction to women is necessary to treat that person differently because of her failure to conform to gender or sex stereotypes, which is, in turn, necessarily discrimination on the basis of sex.”

Ironically, Judge Walker turned to an opinion written by the late Justice Antonin Scalia, an outspoken opponent of LGBT rights, to seal the deal. He quoted from Scalia’s opinion for the Supreme Court in Oncale v. Sundowner Offshore Services, a 1998 decision that same-sex harassment cases could be brought under Title VII.  “No one doubts,” wrote Judge Walker, “that discrimination against people based on their sexual orientation was not ‘the principal evil Congress was concerned with when it enacted Title VII,’” quoting Scalia, and continuing the quote,  “’But statutory prohibitions often go beyond the principal evil to cover reasonably comparable evils, and it is ultimately the provisions of our laws rather than the principal concerns of our legislators by which we are governed.’”  Scalia was opposed to relying on “legislative history” to determine the meaning of statutes, instead insisting on focusing on the statutory language and giving words their “usual” meanings.

Judge Walker concluded that his decision not to dismiss the Title VII claim “does not require judicial activism or tortured statutory construction. It requires close attention to the text of Title VII, common sense, and an understanding that ‘in forbidding employers to discrimination against individuals because of their sex, Congress intended to strike at the entire spectrum of disparate treatment of men and women resulting from sex stereotypes,’” a quote from a 1971 court of appeals ruling that had been cited by the Supreme Court.

Judge Walker’s decision provides the most extended district court discussion of the merits of allowing sexual orientation discrimination claims under Title VII, but it will not be the last word, as the EEOC pushes forward with its affirmative agenda to litigate this issue in as many federal courts around the country as possible, building to a potential Supreme Court ruling. So far, the Supreme Court has refused to get involved with the ongoing debate about whether sexual orientation or gender identity discrimination claims are covered under Title VII.  It refused to review the 11th Circuit’s decision in Glenn v. Brumby.  But it can’t put things off much longer.  An affirmative 7th Circuit ruling in Hively would create the kind of “circuit split” that usually prompts the Supreme Court to agree to review a case.  That may not be long in coming.

Is ENDA Necessary? Or Will Title VII of the Civil Rights Act of 1964 Take Care of LGBT Discrimination

Posted on: April 4th, 2014 by Art Leonard No Comments

One of the major legislative goals of the LGBT rights movement is to get Congress to pass the Employment Non-Discrimination Act (ENDA), a measure that has been pending in Congress in one form or another since 1996 (with predecessor “gay rights” bills having been introduced since the mid-1970s). ENDA would prohibit employment discrimination because of a person’s sexual orientation, gender identity or expression, but would prohibit only intentional discrimination, not employer practices that are neutral on their face but have the effect of discriminating. It is narrowly drafted legislation, and has a big religious exemption that is controversial. And, although the current version was passed by a comfortable majority in the Senate last year, the Republican leadership in the House has refused to hold hearings or schedule a vote, and strategy for a “discharge petition” (a procedural floor vote to get the bill released from Committee and onto the floor for a vote on enactment) is at an early stage.

But what if ENDA is not needed? What if existing law already bans such discrimination? In 1964, Congress passed the Civil Rights Act, whose Title VII bans employment discrimination because of sex. For a long time, both the Equal Employment Opportunity Commission (EEOC) and the federal courts have ruled that discrimination against LGBT people is not prohibited, because in 1964 Congress did not intend to forbid such discrimination. In effect, Title VII was limited to cases where people were suffering discrimination because they are a man or a woman.

But the Supreme Court came to view “sex discrimination” more broadly, ruling in one case that a woman who suffered discrimination because she failed to conform to gender stereotypes (“too butch”) was a victim of sex discrimination, and in another case that a man who encountered a hostile environment in an all-male workplace (treated by his rougher, tougher co-workers as a sex toy) might also have a valid claim under Title VII. The EEOC and some lower federal courts have taken the next step in recent years, holding that discrimination because of gender identity is a kind of sex discrimination, because it is inspired by discomfort or disapproval with people defying conventional gender roles. There is a recent EEOC formal opinion to that effect, and a growing body of federal court decisions support this view.

But what about lesbians, gay men or bisexuals who are not gender-nonconforming in their appearance or conduct, but who encounter discrimination simply because their employer, co-workers or customers are biased against gay people? Before March 31, there were no court opinions suggesting that such a person might be protected from discrimination under Title VII, although some law review commentators had made the argument. On March 31, however, U.S. District Judge Colleen Kollar-Kotelly made history by issuing her opinion in Peter J. Terveer v. James H. Billington, Librarian, Library of Congress, 2014 Westlaw 1280301, 2014 U.S. Dist. LEXIS 43193 (U.S. District Ct., Dist. Columbia), holding that a man who suffered adverse treatment at the hands of an anti-gay supervisor could maintain a claim under Title VII, even though his only gender non-conforming characteristic is his sexual orientation.

According to the court’s opinion, Mr. Terveer was hired in February 2008 to be a Management Analyst in the Auditing Division of the Library of Congress. His first-level supervisor, John Mech, is described in the opinion as “a religious man who was accustomed to making his faith known in the workplace.” According to Terveer’s complaint, Mech said to him on June 24, 2009, that “putting you closer to God is my effort to encourage you to save your worldly behind.” According to the complaint, Terveer became close to Mech and Mech’s family, including his daughter. “In August 2009, Mech’s daughter learned that Plaintiff is homosexual,” wrote Judge Kollar-Kotelly. “Shortly thereafter, Plaintiff received an email from Mech mentioning his daughter and containing photographs of assault weapons along with the tagline ‘Diversity: Let’s Celebrate It.'”

Things went downhill from there. According to the complaint, Mech subjected Terveer to “work-related conversation to the point where it became clear that Mech was targeting Terveer by imposing his conservative Catholic beliefs on Terveer throughout the workday.” Terveer claimed that Mech stopped giving him detailed instructions with his assignments, instead making ambiguous assignments that, in effect, set up Terveer to fail, and assignments that were clearly beyond Terveer’s experience level. Terveer claims he was given one huge assignment that would normally require the attention of half a dozen employees, and then Mech piled additional work on top of that.

Terveer alleged that on June 21, 2010, Mech called an unscheduled meeting that lasted more than an hour, “for the purpose of ‘educating’ Terveer on Hell and that it is a sin to be a homosexual, that homosexuality was wrong, and that Terveer would be going to Hell.” Mech recited Bible verses to Terveer and told him, “I hope you repent because the Bible is very clear about what God does to homosexuals.” A few days later, Terveer received his annual review from Mech, and felt it did not reflect the quality of his work. Terveer believed that the review “was motivated by Mech’s religious beliefs and sexual stereotyping.” Terveer confronted Mech about this unfair treatment, which got Mech angry, vehemently denying that he was partial, and he accused Terveer of trying to “bring down the library.”

Terveer next went to Mech’s supervisor and told him about what was happening. According to Mech’s account of that meeting with Nicholas Christopher, Christopher told him that, in his opinion, “employees do not have rights,” and Christopher took no action to remedy the problem or advise Terveer about appropriate complaint procedures. According to Terveer, Mech’s response to this was to put Terveer under “heightened scrutiny” supervision by Mech and to generate an evaluation of the project to which Terveer had been assigned, even though it wasn’t finished, that was “extremely negative.” Terveer got into an argument with Mech about this evaluation, and Mech told him that he was “damn angry” that Terveer had threatened to bring a claim for wrongful discrimination and harassment. According to Terveer, Mech ended his tirade with the statement, “You do not have rights, this is a dictatorship.”

Early in 2011 Mech issued another negative evaluation of Terveer and put him on 90-day written warning, which could lead to Terveer not receiving the pay increase he would ordinarily receive. Terveer then initiated a discrimination claim with the EEOC. An attempt by another agency officer to get him transferred away from Mech failed when Mech’s supervisor said that Terveer was “on track to be terminated within six months.” As things deteriorated further for Terveer, he finally filed a formal complaint on November 9, 2011, alleging discrimination because of religion and sex, sexual harassment, and reprisal. Terveer had been suffering emotional distress from the situation and ended up taking lots of leave time, ultimately claiming that he was constructively terminated on April 4, 2012, because he could not return to the workplace to confront Mech and Christopher. The Library formally terminated him, and his appeal within the Library’s grievance process was unsuccessful. The agency issued a decision on May 8, 2012, denying his discrimination claims. He filed suit on August 3, 2012, alleging violations of Title VII and the constitution, as well as Library of Congress regulations and policies.

The court faced a variety of legal issues in ruling on the defendants’ motion to dismiss the case, the most serious of which was the failure of Terveer to pursue various administrative remedies before he resorted to a lawsuit. But perhaps the most important part of the opinion addresses the Defendant’s claim that the facts alleged by Terveer would not suffice for a legal claim of discrimination under Title VII. At the time that the Defendants filed this motion, federal courts had limited protection against discrimination for gay men to situations where a supervisor’s discriminatory conduct was motivated by judgments about a plaintiff’s behavior, demeanor or appearance that failed to conform to sexual stereotypes, and Terveer was not alleging that his behavior or appearance failed to conform to stereotypes about “manly men.”

But Judge Kollar-Kotelly saw Title VII’s protection as broader than these traditional gender stereotyping cases. “Under Title VII,” she wrote, “allegations that an employer is discriminating against an employee based on the employee’s non-conformity with sex stereotypes are sufficient to establish a viable sex discrimination claim. Here, Plaintiff has alleged that he is ‘a homosexual male whose sexual orientation is not consistent with the Defendant’s perception of acceptable gender roles,’ and that his ‘status as a homosexual male did not conform to the Defendant’s gender stereotypes associated with men under Mech’s supervision or at the (Library of Congress),’ and that ‘his orientation as homosexual had removed him from Mech’s preconceived definition of male.'” This, found the judge, was sufficient to meet the burden under the Federal Rules of Civil Procedure to set forth “a short and plain statement of the claim showing that the pleader is entitled to relief.” Since Terveer had alleged that the Library had denied him promotions and created a hostile work environment because of his “nonconformity with male sex stereotypes,” Terveer could proceed with his claim.

The judge emphasized that the burden on the plaintiff to state a claim at this stage of the litigation is “relatively low” when a court is deciding a motion to dismiss, before there has been any discovery in the case. Interestingly, the judge found another basis for Terveer’s Title VII claim in the religiously-motivated bias of his supervisor, observing that past courts had allowed claims of discrimination in such cases. “The Court sees no reason to create an exception to these cases for employees who are targeted for religious harassment due to their status as a homosexual individual,” she wrote, refusing to dismiss Terveer’s religious discrimination claim under Title VII. The judge also found that Terveer’s factual allegations would be sufficient grounding for a claim of a “retaliatory hostile work environment.” However, she noted, having found that Terveer’s claims are covered, at least at this early stage in the case, under Title VII, the court would have to dismiss his constitutional due process and equal protection claims, as the Supreme Court has made clear that Title VII is the exclusive remedy for federal employees with discrimination claims that come within its scope.

The bottom line for this ruling was that although certain claims were dismissed for failure to exhaust administrative remedies, the court refused to dismiss the sex and religious discrimination claims, as well as the retaliation claim. In so doing, the court made history with its acceptance that a gay man who was not gender non-conforming in appearance or behavior could assert a sex discrimination claim when a supervisor’s own religiously-inspired stereotyped notions of proper sex roles motivated adverse treatment of the gay employee.

While such a ruling is most welcome, it would probably be premature to suggest that ENDA is not needed. This is one non-precedential ruling on a pre-trial dismissal motion by a single federal judge. However, it reflects the broadening trend of defining sex under Title VII reflected in the growing body of cases rejecting motions to dismiss such claims brought by transgender plaintiffs, and may portent more definitive rulings expanding Title VII’s sex discrimination ban to claims brought by otherwise-gender-conforming LGBT plaintiffs.

Justice Department Finds ATF Discriminated Unlawfully in Transgender Discrimination Case

Posted on: July 16th, 2013 by Art Leonard No Comments

The Justice Department’s Complaint Adjudication Office (CAO) issued a decision on July 8 holding that the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) violated Title VII of the Civil Rights Act in 2011 when it denied a position as a contract Ballistics Forensic Technician to an applicant who was in the process of transitioning from male to female.  In its first such ruling, the CAO applied an earlier decision in the case by the Equal Employment Opportunity Commission (EEOC), which ruled that discrimination because of an individual’s gender identity is sex discrimination that violates Title VII.  The case is Macy v. ATF, Agency Complaint No. ATF-2011-00751.

Most of the CAO’s opinion, which is signed by Complaint Adjudication Officer Mark L. Gross and Attorney Complaint Adjudication Officer Carl D. Taylor, Jr., is devoted to a detailed exposition and analysis of the evidence obtained during the investigation of this charge, after the EEOC had overruled a prior determination by the Justice Department that Mia Macy’s complaint was not covered by Title VII.  The opinion reads a bit like a detective procedural, since there are conflicting and detailed accounts of what had happened leading to a decision by the ATF Walnut Creek Laboratory Chief Donna Read, apparently on April 5, 2011, to terminate the processing of Macy’s application for the position.

Macy had worked as a detective in the Phoenix (Arizona) Police Department and acquired familiarity with certain technology that was also in use at the ATF lab.  While employed with the PPD, Macy was known as Charles DeMasi.  Macy informed her boss in Phoenix that she was planning to move to the San Francisco Bay Area, and her boss said that he knew of an opening for which she would be qualified at the ATF lab in Walnut Creek near San Francisco.  Upon her expression of interest, he called the Section Chief at the lab and recommended DeMasi, who then followed up with phone conversations with the Section Chief.  Macy’s recollection and notes of the calls reflect that she was told the position would be hers after the background check performed by the contractor, Aspen of D.C., which was charged with screening and hiring applicants.  Macy submitted her information to Aspen, and later in the course of the background process revealed to Aspen her intended transition, including name change, which necessitated presenting additional documentation for the background investigation.

The Walnut Creek lab had been intending to hire two people for this work, and both Macy and another candidate were being put through the background investigation by Aspen.  When the word got back to Walnut Creek about Macy’s gender transition, suddenly there was a decision that they could hire only one person, and would go with the other applicant who was “further along” in the background process.  Macy, who had been previously informed that things were moving forward on her application, and that her gender transition would not be an issue, suddenly received an email communication that due to budgetary concerns the position for which she had applied would not be filled, and that she would be contacted if another position opened up in the future.  Something seemed fishy to Macy, who called for further information and was subsequently told that she could be offered a human resources position with another unit of ATF in Seattle for which she was not qualified and had no interest.  She subsequently filed her discrimination complaint with the Justice Department.

The investigators questioned ATF staff and Aspen staff to try to determine how the decision was made to discontinue processing Macy’s application and to inform her that the position was not available for her.  The staffers all insisted that Macy’s gender identity and transition from male to female had nothing to do with the decision, but the investigators concluded otherwise based on inconsistencies in the stories they were told, the suspicious timing of the decision, and Macy’s superior credentials compared to the other candidate who was hired.  The other candidate did not have the past experience and training with the relevant technology that Macy had, and the background investigation of the other candidate raised various suitability questions that were not present in Macy’s background.  Also, the other candidate’s progress through the background investigation was not really much further along than Macy’s. There were also implausible assertions about training issues, and – most suspiciously – certain internal communications immediately after Read learned of Macy’s gender transition that reflected an abrupt change in direction of the hiring process without any credible non-discriminatory explanation. 

“The finding of Title VII discrimination based on ATF’s apparent consideration of complainant’s transgender status is not a simple one to make,” says the opinion.  “Notably, at the time of the incident at issue here, essentially between March 30 and April 5, 2011, ATF management officials were not aware that taking employment actions based on the fact that an individual was male or female after a transgender transition was legally impermissible.  At that time, the Department of Justice had not yet changed its internal regulations to prohibit employment actions based on transgender status, and the EEOC had not yet held that such action violated Title VII’s ban on discrimination on the basis of sex.  It may have been that ATF officials were taken aback by the sudden and clearly unexpected announcement that the applicant they knew as Charles DeMasi was now Mia Macy.  That does not, however, in any way condone or excuse the actions taken here, which are now a violation of Title VII.”

Focusing on the reason why Macy was denied the position, the Office found that the record supported her claim of discrimination.  “The record established that the ATF intended and began taking steps to hire complainant for the position – until she disclosed that she was transitioning from a man to a woman.  The ATF stopped complainant’s hiring process when it learned that complainant, formerly Charles DeMasi, would become Mia Macy.  In light of the EEOC’s decision in this case to hold that actions based on transgender status are actions based on sex and therefore covered by Title VII, the ATF’s actions were discrimination based on sex and therefore prohibited by Title VII.”  The Opinion observed the close analogy of this case to Schroer v. Billington, 577 F.Supp.2d 293 (D.D.C. 2008), in which a highly qualified applicant for a technical research position at the Library of Congress, who had been offered the position, was suddenly not an acceptable candidate after having revealed her plan to transition.  In that case, the District Court ruled that the Library violated Title VII’s ban on sex discrimination by rescinding its job offer.  Schroer was an important judicial precedent for the EEOC’s subsequent ruling in Macy’s case that her complaint could be dealt with under Title VII as a sex discrimination claim.

As a remedy for the discrimination, the Decision orders ATF to offer Macy the position she was seeking, giving her fifteen days to respond to any such offer, with backpay and other benefits back to the date she would have started employment in the absence of the discriminatory termination of her hiring process.  The Decision orders ATF to “take appropriate corrective action to prevent any discrimination from occurring” at the Walnut Creek lab.  Macy will also be entitled to compensatory damages “if she can demonstrate that she suffered injuries as a direct result of the discrimination found to have occurred,” including compensation for emotional distress if any can be documented. Also, as prevailing party in the case, Macy will be entitled to be compensated for any attorney fees she has incurred in pressing forward her discrimination claim.

Pregnant Lesbian Will Get Jury Trial Against Catholic School

Posted on: February 7th, 2013 by Art Leonard No Comments

Senior U.S. District Judge Arthur Spiegel (Southern District of Ohio) ruled on January 30 that Christa Dias, who was fired as a computer technology coordinator from two schools of the Roman Catholic Archdiocese of Cincinnati after she told her principal at one of the schools that she was pregnant, is entitled to a jury trial of her pregnancy discrimination complaint under Title VII of the Civil Rights Act of 1964, but not of her breach of contract claim.   Unbeknownst to the schools, Dias was in a relationship with a same-sex partner while employed there.

Judge Spiegel relates that when Dias became pregnant, she told the principal at one of the schools, who made inquiries of higher authorities and then told Dias that she would probably lose her job because she was pregnant and unmarried.  This would be a violation of the “morals” provision of her employment contract, which required her to comport herself in compliance with Roman Catholic teachings, which disapprove of premarital sex.  Dias responded that she did not become pregnant from sex, but rather from “artificial insemination.”  The R.C. Church doesn’t approve of that either, so she was dismissed from her jobs. 

She sued under Title VII, which forbids sex discrimination and provides that the ban on sex discrimination also includes discrimination because of pregnancy.  She also argued that the employer had terminated her contract without good cause.  In defense, the employer argued that it was entitled to the ministerial exemption as a religious institution, and that Dias could not bring suit under her contract because she had violated the morals clause, which provided them with a valid reason for her discharge. 

In an earlier ruling, on March 29, 2012, Judge Spiegel rejected the “ministerial exemption” defense, finding that it only extends to employees who are hired to fulfill religious functions.  There was no indication that somebody hired as a computer technology coordinator was performing such functions.  Indeed, Judge Spiegel found that Dias was not a minister, was not hired to teach religion, and as a non-Catholic was not even permitted to teach religion in a Catholic school.  Judge Spiegel also found in that earlier ruling that there seemed to be a lack of “meeting of the minds” about whether the “morals clause” of the contract would be violated by an unmarried female employee becoming pregnant through artificial insemination, so there was a “question of fact as to whether Plaintiff knew she was barred from such action.”

After Judge Spiegel issued the earlier ruling, discovery got under way and the further fact emerged that Dias was living in a homosexual relationship with another woman while employed by the Archdiocese, another violation of Catholic teaching, which she had kept secret from her employer.  The employer argued that new facts emerging in discovery also bolstered its contention that the ministerial exemption applies to this case.  Both parties moved for summary judgment.

The Archdiocese lost on the argument that the ministerial exemption would apply.  Judge Spiegel rejected the argument that new facts emerging during discovery would change his conclusion. The Archdiocese argued that all teachers were “role models” and thus “ministers” in this context, but Judge Spiegel was unshaken from his prior conclusion that because Dias was “not permitted to teach Catholic doctrine, she cannot be considered a ‘minister’ of the Catholic faith.”  He also rejected an argument that the Archdiocese was not a proper defendant because the schools hire and fire faculty autonomously, pointing out that the Archdiocese sets the overall employment policies for its schools and maintains centralized control of management and labor relations.

As to the pregnancy discrimination issue, it is clear on its face that the employer has a policy of not employing pregnant women who are unmarried, which looks like a facial violation of Title VII, although Spiegel was unwilling to accept Dias’s contention that terminating an employee for this reason is automatically a violation.  On the other hand, Dias did agree to an employment contract with a morals clause, and the Archdiocese argues that a clear violation of the morals clause gives it a legitimate, non-discriminatory reason for discharge.  “The morals clause in this case lacks specificity such that only an evaluation of the decision-makers’ testimony can show whether their initial reason for terminating Plaintiff was simply enforcement of a policy against premarital sex,” Judge Spiegel wrote.  “This in the Court’s view is a factual determination for a jury: to answer why Defendant really terminated Plaintiff.” 

Spiegel then asserted that the defendant would be guilty of sex-discrimination if its policy against premarital sex was not evenhandedly administered.  The plaintiff contends that the morals clause is used to dismiss women who become pregnant but not men who have premarital sex.  So at trial, it would behoove the Archdiocese to come up with examples of single male employees who were dismissed for getting their girlfriends pregnant, or married male employees dismissed upon discovery that they were having extra-marital affairs. 

“This case offers the further twist of a second proffered reason for Plaintiff’s termination,” wrote Spiegel.  “After Plaintiff informed Defendants she was pregnant through the means of artificial insemination, they responded that such means of becoming pregnant was also justification for her termination.”  Although 6th Circuit caselaw suggests that the way a person becomes pregnant may be relevant in the context of evaluating an employer’s policy against premarital sex, Judge Spiegel said that the more immediate issue was, again, whether a policy against unmarried employees using artifical insemination was applied without regard to sex.  He found that “the Plaintiff has raised a genuine issue of material fact as to whether Defendant has enforced its policy as to men.”  The Archdiocese maintains that it is consistent on this, but another fact emerged in discovery: “a former male employee of a parish within the Archdiocese, who testified he engaged in artificial insemination without being fired.”  So there is a jury question about consistency of the policy.

Because the Archdiocese did not fire Dias due to her homosexual relationship, something of which they were unaware until it became known during discovery in this case, that is not an issue in the Title VII claim.  However, Judge Spiegel found that it was an issue in the breach of contract claim.   He pointed out that Dias had admitted in discovery “that she kept such fact secret from Defendants as she knew Defendants would view her relationship as a violation of the morals clause.  Under such circumstances, the Court finds Plaintiff, with ‘unclean hands,’ cannot invoke a cause of action based on a contract she knew she was breaching.”  Finding that the contract issue was distinct from the Title VII issue, Spiegel granted summary judgment against Dias on her breach of contract claim, but said that this “in no way absolves Defendants of any responsibility to conform to the requirements of law against pregnancy discrimination.”

Finding that summary judgment on the Title VII claim was inappropriate due to the remaining factual issues in dispute, Judge Spiegel said that the scheduled pretrial conference will be held on February 27 and the trial will begin on or about March 19.