Category Archives: Discrimination

October 2, 2018

Wyoming Employer Sued for Paying Female RNs Less Than Male RNs

Brad Cave

by Brad Cave

Paying an experienced female registered nurse (RN) less than a newly licensed male RN has a Wyoming healthcare employer defending a lawsuit brought by the Equal Employment Opportunity Commission (EEOC). On September 28, 2018, the EEOC filed a complaint in the federal court in Wyoming alleging that Interim Healthcare of Wyoming, Inc. (Interim) violated the Equal Pay Act and Title VII by paying employees of one sex lower wages than employees of the opposite sex for substantially equal work.

Pay Inequity Among RNs is Alleged

According to the complaint, female Nicole Aaker was hired by Interim as a Home Care RN in November 2015. Aaker had received her RN license from the Wyoming State Board of Nursing in June 1998 and at the time of her hire, had about 17 years of professional RN experience. Interim paid her $28 per hour.

The complaint alleges that Interim hired male RN Bailey Jessee as a Home Care RN in late May 2015, about six months prior to hiring Aaker. Jessee had just received his RN license from the State Board of Nursing in February 2015 and he had about two months of professional RN experience. Interim paid him $29 per hour.

Further statements in the complaint allege that at least five additional female nurses were paid hourly rates less than the $29 per hour rate paid by Interim to Jessee, including the following:

  • Female RN with about 2 years of experience was paid $26 per hour
  • Female RN with about 18 years of experience was paid $28 per hour
  • Female RN with about 30 years of experience was paid $26 per hour
  • Female RN with about 26 years of experience was paid $28.50 per hour
  • Female RN with about one month of experience was paid $26 per hour, and was given a raise to $28 per hour after over a year of employment with Interim.

Employer Allegedly Fails to Respond to Internal Complaints 

Interestingly, it was the male RN, Bailey Jessee, who appears to have raised the initial complaints to Interim about the disparity in his pay and Aaker’s pay, according to the complaint. Jessee allegedly raised the pay disparity issue at least twice to Interim Administrator Crystal Burback who responded that the pay difference was due to experience. When Jessee replied that Aaker had a lot more nursing experience than he did, Burback allegedly became angry and told Jessee that he shouldn’t discuss his salary at all.

The complaint further alleges that on another occasion, Jessee told Interim Director of Healthcare Service Lori Norby and Crystal Burback that he would be willing to take a pay cut to make his pay rate equal with Aaker’s hourly rate. Although Norby seemed willing to accept that offer, Burback allegedly became angry and defensive. A few months later, Jessee resigned from Interim.

The allegations in the complaint state that Aaker also complained to Burback about the pay discrepancy between her hourly rate and Jessee’s rate. Burback allegedly first responded that she was paid “per experience,” and then responded that it didn’t matter if Aaker had more experience than Jessee – she was hired at $28 per hour and it would not change. The complaint alleges that after receiving no response to her complaints, Aaker was constructively discharged on April 29, 2016.

Sex Discrimination Claim

Although the Equal Pay Act violation is front and center in the EEOC’s complaint, the allegations include that Aaker and other female nurses were subjected to working conditions involving sex discrimination that were so intolerable that the female nurses felt compelled to resign. In alleging constructive discharge based on sex, the EEOC writes that Burback engaged in inappropriate workplace conduct, including regularly demeaning Aaker, calling Aaker “stupid,” telling Aaker that she was not doing her job, slapping Aaker on the buttocks, and, in the presence of Aaker, grabbing a female social worker’s breast.

EEOC Seeks Damages and an Injunction

The EEOC has made enforcement of equal pay laws one of its six national priorities as specified in its Strategic Enforcement Plan. In the Interim lawsuit, the EEOC seeks a permanent injunction to stop Interim from engaging in compensation discrimination based on sex. The agency further seeks back pay damages for the female nurses for lost wages, liquidated damages, damages to compensate for pain and suffering, and punitive damages.

Audit Your Pay Practices for Disparities

Due to the EEOC’s focus on compensation practices that discriminate based on gender, employers are well advised to audit their own pay practices to determine whether they are paying employees in substantially similar jobs differently along gender lines. If so, take proactive steps now to correct any equal pay issues so that you do not become the EEOC’s next target.

September 26, 2018

SCOTUS Employment Cases and Petitions for The Upcoming Term

Steven Gutierrez

by Steven M. Gutierrez

The Supreme Court of the United States will begin its upcoming session on Monday, October 1, 2018. Currently, eight justices preside over the high court following Justice Anthony Kennedy’s retirement after the end of the last term. As we saw when the Court was short a justice following Justice Scalia’s unexpected death in 2016, the lack of a full nine-justice panel may result in some interesting decisions. Here are highlights of the cases and petitions that employers will want to watch for the upcoming term.

ADEA Application to Small Public Employers

On the Court’s first day of the new term, the justices will hear oral argument in a case that asks whether the Age Discrimination in Employment Act (ADEA) applies to all public employers, regardless of size, or only to those with 20 or more employees. The ADEA prohibits discrimination against applicants and employees who are age 40 or older. An “employer” is defined by the ADEA as “a person engaged in an industry affecting commerce who has twenty or more employees . . .” which clearly sets a 20-employee threshold for private employers. But the ADEA also applies to state political subdivisions (i.e., public employers) and federal appeals courts have disagreed on whether the 20-employee threshold applies to such public employers.

The U.S. Courts of Appeals for the Sixth, Seventh, Eighth, and Tenth Circuits have held that the ADEA applies to public employers of any size. The Ninth Circuit, however, has ruled oppositely, applying the 20-employee threshold to public employers. The Supreme Court granted the petition for a writ of certiorari to resolve the split in the circuits. Mount Lemmon Fire Dist. v. Guido, No. 17-587.

Arbitration Agreements

During its last term, the Supreme Court ruled that arbitration agreements that require an employer and employee to resolve employment disputes on a one-on-one basis, thereby prohibiting class actions, do not violate the National Labor Relations Act. (See post on the Epic Systems Corp. v. Lewis decision here.) This term, additional questions related to arbitration agreements will be before the Court.

In Lamps Plus, Inc. v. Varela, No. 17-988, the Court will hear a case in which an arbitration agreement did not mention or address class arbitration. In its 2010 decision in Stolt-Nielsen, S.A. v. AnimalFeeds International Corp., SCOTUS held that a court could not order arbitration to proceed using class procedures unless there was a “contractual basis” for concluding that the parties have “agreed to” class arbitration. The Court stated that courts may not “presume” such consent from “mere silence on the issue of class arbitration” or “from the fact of the parties’ agreement to arbitrate.” Yet, in the Lamps Plus case, a divided Ninth Circuit panel inferred mutual assent to class arbitration from standard language in the agreement, such as that “arbitration shall be in lieu of any and all lawsuits or other civil legal proceedings.” Consequently, the Supreme Court will review the Ninth Circuit’s decision to determine whether the Federal Arbitration Act (FAA) allows a state-law interpretation of an arbitration agreement that would authorize class arbitration based solely on general language commonly used in arbitration agreements. Oral argument in that case is set for October 29, 2018.

Another arbitration case before the Court this term questions the application of the FAA to independent contractor agreements. In New Prime Inc. v. Oliveira, No. 17-340, the Court must decide whether Section 1 of the FAA, which applies on its face only to “contracts of employment,” is applicable to independent contractor agreements. In that case, an independent contractor had signed a mandatory arbitration provision with an interstate trucking company agreeing to arbitrate all workplace disputes on an individual basis. However, Section 1 of the FAA provides that it does not apply “to contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” The independent contractor filed a putative class action in court and opposed arbitration based on the Section 1 exemption. The Court also will address whether the FAA’s Section 1 exemption is an arbitrability issue that must be resolved in arbitration rather than by a court. Both parties will argue this case before the Court on October 3, 2018.

Petitions Not Yet Granted

Parties have petitioned the high court to hear other employment-related cases this term. The Court may or may not grant review of these cases, but they raise significant employment issues so are worth reviewing here.

Sexual Orientation Discrimination and Gender Identity Under Title VII

Title VII of the Civil Rights Act of 1964 does not explicitly prohibit employment discrimination on the basis of sexual orientation. Yet, at least three federal appellate courts, the Second, Sixth, and Seventh Circuit Courts, have ruled that Title VII’s ban on sex discrimination extends to prohibit sexual orientation discrimination. The Eleventh Circuit, however, ruled that Title VII does not give rise to a claim for sexual orientation discrimination.

Two petitions are being considered by the Court on this important issue. Altitude Express Inc. v. Zarda, and Bostock v. Clayton County are the two cases up for consideration and should the Court agree to accept review of either (or both), the decision could prove to be one of the most important for employers this term.

In a separate petition by R.G. & G.R. Harris Funeral Homes, an employer is challenging a Sixth Circuit decision that ruled in favor of the Equal Employment Opportunity Commission (EEOC), holding that Title VII applies to employment discrimination based on gender identity. The case involved an employee who was fired after telling her boss that she would be transitioning to a female gender identity and wanted to wear women’s clothing at work. Again, the potential impact of a SCOTUS decision on this issue will be wide-reaching for employers in the U.S.

Gender Pay Inequity

Also up for potential SCOTUS review is the Ninth Circuit’s controversial decision that an employer may not use a person’s prior salary to justify pay disparities. The Equal Pay Act (EPA) prohibits employers from paying men and women differently for the same work, but there are exceptions that include “factors other than sex.” In Yovino v. Rizo, the question is whether salary history qualifies as a “factor other than sex” when employers make pay determinations. The Ninth Circuit said no, salary history is not a factor other than sex. But the Seventh Circuit has stated that salary history is indeed a factor other than sex. The circuit split could make this timely topic ripe for the Supreme Court to accept review.

Labor Cases

At least two labor law cases are seeking SCOTUS review this term. The first, Ohlendorf v. Local 876, UFCW, involves whether a union violates its duty of fair representation if it refuses to allow members to rescind their dues checkoff authorization because the members failed to follow proper rescission procedures. The Sixth Circuit ruled in favor of the union, holding that it acted within its bounds when it continued to collect union dues from a couple of members who didn’t properly rescind their dues checkoff authorization. The workers seek to appeal that decision through SCOTUS review.

Another petition being considered by the Court would address whether a successor employer is obligated to bargain with the predecessor company’s unionized workers when the successor takes over the assets of another business. In Creative Vision Resources v. NLRB, the successor company is challenging a ruling by the Fifth Circuit, enforcing a National Labor Relations Board decision that the company violated federal labor law when it failed to bargain with the predecessor company’s union before imposing initial employment terms and conditions on the workers.

Stay Tuned

As always, we will continue to track these cases and petitions as they make their way through the Supreme Court’s term. Be sure to subscribe to our blog so that you receive our updates.

April 12, 2018

Salary History Cannot Justify Unequal Pay Between Men and Women, According to Ninth Circuit

Dora Lane

by Dora Lane 

The Ninth Circuit Court of Appeals ruled this week that an employer cannot justify a pay difference between male and female employees performing equal work based on prior salary. Rizo v. Yovino. This is a significant decision that could increase potential liability for Equal Pay Act (EPA) claims for employers with workers in states covered by the Ninth Circuit, namely California, Nevada, Idaho, Montana, Arizona, Oregon, Washington, Alaska, and Hawaii.

Equal Pay Act Requirements 

The EPA was enacted in 1963, amending the Fair Labor Standards Act, to prohibit wage disparities based on sex. In short, it requires that men and women be paid equal pay for equal work regardless of sex. Specifically, the law provides that no employer shall discriminate on the basis of sex in paying wages for equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions. Exceptions are permitted when wages are made pursuant to a seniority system, a merit system, a system measuring earnings by quantity or quality of production, or a differential based on any other factor other than sex.

Employer’s Pay Policy Added Five Percent to New Hires’ Prior Salary

In the case before the court, Aileen Rizo was hired as a math consultant by the Fresno County Office of Education. Her salary was set according to the County’s Standard Operating Procedure under which a new hire would be paid five percent over his or her prior salary, and placed on a corresponding step of the County’s ten-step salary schedule. Based on Rizo’s prior salary in Arizona, she was placed at step 1 of level 1 on the County’s hiring schedule.

A few years into her employment, Rizo was having lunch with her colleagues and learned that her male counterparts had been subsequently hired as math consultants at higher salary steps. Rizo filed a pay disparity complaint with the County which replied that her pay was set in accordance with its Standard Operating Procedure. Rizo filed a federal lawsuit alleging a violation of the EPA, sex discrimination under Title VII, and related state law claims.

Prior Pay Not A “Factor Other Than Sex”

The County did not dispute that it paid Rizo less than comparable male employees for the same work. Instead, it argued that considering each employee’s prior salary to set wages was a permissible “factor other than sex,” so any resulting wage differential was not in violation of the EPA.

The Ninth Circuit ruled that an employer was not permitted to consider an employee’s prior salary, either by itself or in combination with other factors, when establishing the employee’s wages. The Court specifically stated that “prior salary alone or in combination with other factors cannot justify a wage differential” because prior salary history does not constitute a “factor other than sex” under the EPA’s statutory “catchall” exception. The Court wrote that prior salary is not a legitimate measure of work experience, ability, performance, or any other job-related quality, and that employers must look directly to those underlying factors rather than prior salary when justifying a wage differential between male and female employees doing equal work. Writing for the majority, Judge Reinhardt stated, “To hold otherwise – to allow employers to capitalize on the persistence of the wage gap and perpetuate that gap ad infinitum – would be contrary to the text and history of the Equal Pay Act, and would vitiate the very purpose for which the Act stands.” Read more >>

March 7, 2018

Federal Appeals Court Rules Sexual Orientation Discrimination Violates Title VII

By Cecilia Romero

Overturning prior precedent, the full panel of the Second Circuit Court of Appeals recently ruled that sexual orientation discrimination is a form of sex discrimination that violates Title VII. Zarda v. Altitude Express, Inc.. With this landmark ruling, the Second Circuit joins the Seventh Circuit in extending Title VII sex discrimination protection to employment discrimination based on sexual orientation. However, this opinion further highlights a split in circuits over this issue—the Eleventh Circuit which holds the opposite. The EEOC has taken the position consistent with the Second Circuit.

Facts of Case

Donald Zarda, who worked for Altitude Express as a skydiving instructor in New York, was gay. To preempt any discomfort his female students might feel being strapped to an unfamiliar man, Zarda often disclosed he was gay. Before one particular tandem jump with a female student, Zarda told her that he was gay and had an ex-husband to prove it. After the successful skydive, the student told her boyfriend that Zarda had inappropriately touched her and disclosed his sexual orientation to excuse his behavior. The woman’s boyfriend told Zarda’s boss, who fired Zarda shortly thereafter. Zarda denied touching the student inappropriately and believed that he was fired solely because of his reference to his sexual orientation.

After filing with the EEOC, Zarda filed a lawsuit against his former employer in federal court asserting, among other claims, that his firing violated Title VII under a sex stereotyping theory as well as violating New York law (which prohibits sexual orientation discrimination). In March 2014, the district court granted summary judgment to Altitude Express on his Title VII claim, stating that he failed to establish a prima facie case of gender stereotyping discrimination.

Zarda appealed, pointing to a 2015 EEOC decision that held that allegations of sexual orientation discrimination state a claim of discrimination on the basis of sex and therefore, violate Title VII. In April 2017, a three-judge panel of the Second Circuit refused to reverse the lower court’s ruling on Zarda’s Title VII claim because it was bound by the Circuit’s prior precedent in which the court had ruled that discrimination based on “sex” did not encompass discrimination based on sexual orientation. The three-judge panel noted, however, that the full court sitting en banc could overturn its earlier precedent and subsequently ordered a rehearing so that the full court could determine whether to sexual orientation was prohibited under Title VII.

Sexual Orientation Discrimination Recognized as Sex Discrimination Claim

In deciding whether Title VII prohibits sexual orientation discrimination, the full Second Circuit Court of Appeals examined the phrase “because of . . . sex” as used in Title VII. The Court stated that Congress had intended to make sex irrelevant to employment decisions, leading the U.S. Supreme Court subsequently to prohibit discrimination based not only on sex itself, but also on traits that are a function of sex, such as non-conformity with gender norms. The Second Circuit concluded that sexual orientation is a function of sex, because one cannot fully define a person’s sexual orientation without identifying his or her sex. The Court wrote, “Logically, because sexual orientation is a function of sex and sex is a protected characteristic under Title VII, it follows that sexual orientation is also protected.”

The Court also concluded that sexual orientation discrimination is a subset of sex discrimination by considering associational discrimination. Pointing to decisions where courts have held that an employer may violate Title VII if it takes action against an employee because of the employee’s association with a person of another race, the Court extended that prohibition to address when an adverse action is taken against an employee because his or her romantic association with a person of the same sex.

Some judges on the Second Circuit dissented, writing that the drafters of Title VII included “sex” in the civil rights law in order to “secure the rights of women to equal protection in employment” with no intention of prohibiting discrimination on the basis of sexual orientation. The majority of the judges respectfully disagreed.

What Employers Need to Know

Because the Eleventh Circuit (which includes Florida, Georgia, and Alabama) refused to recognize a Title VII claim for sexual orientation discrimination in 2017, the split in the circuit courts make this issue ripe for consideration by the U.S. Supreme Court. However, until the Supreme Court is presented with, and agrees to hear, a case raising this issue, we are left with varying protections in different jurisdictions.

Employers with operations located in the Second and Seventh Circuits, which have recognized sexual orientation discrimination as prohibited by Title VII, should update their policies and practices to reflect that protected category. That means, employees located in New York, Vermont, Connecticut, Illinois, Wisconsin, and Indiana are protected against harassment, discrimination, and retaliation on the basis of sexual orientation under federal law.

Employers also need to comply with state and local laws that may prohibit employment discrimination on the basis of sexual orientation. At present, approximately 20 states plus the District of Columbia have laws banning private employers from engaging in sexual orientation discrimination. Additional states ban such discrimination by government employers. And more and more cities and counties are enacting ordinances to prohibit sexual orientation discrimination. To ensure compliance, employers may wish to implement policies prohibiting such discrimination regardless of jurisdiction. Otherwise, employers are forced to examine the laws applicable to each of their locations and alter their policies accordingly.

January 11, 2018

EEOC Reveals Its Strategy For Upcoming Years; Will Review Public Comments

Little V. West

By Little V. West

The U.S. Equal Employment Opportunity Commission (EEOC) recently issued its draft strategic plan for fiscal years (FY) 2018-2022. Because the strategic plan outlines the agency’s priorities for enforcing anti-discrimination laws in the upcoming years, employers can learn a great deal about the types of discrimination and class actions the EEOC will pursue and litigate to further its agenda. Let’s look at highlights of the draft plan to see where the EEOC intends to focus its resources.

Substantive Area Priorities

In its draft strategic plan for upcoming years, the EEOC makes some changes to the substantive areas of law that encompasses its priorities for enforcement efforts. First, it adds two new priorities under the Emerging and Developing Issues area. The agency will look to address discriminatory practices against those who are Muslim or Sikh, or persons of Arab, Middle Eastern, or South Asia descent, particularly protecting members of these groups from backlash following tragic events in the U.S. and the rest of the world. The agency also will look to clarify the employment relationship and the application of anti-discrimination laws to the evolving employment relationships related to temporary workers, staffing agencies, independent contractors, and the on-demand economy (e.g., Uber, Airbnb, freelancers, and other economic models that do not have a traditional employment relationship).

Second, the priorities under the Americans with Disabilities Act will be narrowed to focus on qualification standards and inflexible leave policies that discriminate against individuals with disabilities.

Third, in the area of Immigrant, Migrant, and Other Vulnerable Workers, the EEOC will look to its district offices and the agency’s federal sector program to identify vulnerable workers and underserved communities in their area. For example, the EEOC states that some district offices may focus on employment discrimination against members of Native American tribes, where those groups have local issues of concern.

Fourth, the EEOC proposes to expand its priority on equal pay to go beyond discrimination based on sex, but to address compensation systems and practices that discrimination based on race, ethnicity, age, individuals with disabilities, and other protected groups. Consequently, addressing and remedying pay discrimination is intended to reach all workers, not just those paid differently because of their gender.

Fifth, the agency will focus on preserving access to the legal system and challenging practices that limit workers’ substantive rights or impede the EEOC’s investigative or enforcement efforts. In particular, the EEOC intends to focus on overly broad waivers and releases of claims. It will also target overly broad mandatory arbitration provisions. In addition, the agency looks to focus on significant retaliatory practices that dissuade other employees from exercising their rights.

Finally, the EEOC will continue to make it a priority to prevent systematic workplace harassment. Given the current environment that has shed new light on sexual harassment, the EEOC will look specifically to claims that raise a policy, practice, or pattern of harassment.

Strategy Leads to Priority Handling and Litigation

Because of limited resources, the EEOC will use its strategic priorities to guide its charge handling, investigations, and litigation. If a charge raises a substantive area priority, it will be given priority in charge handling. Cases with strong evidence in substantive priority areas will be given precedence in the selection of cases for litigation. In general, the agency looks to its strategic plan to offer a more targeted approach to its enforcement efforts.

Integrating EEOC Efforts Across The Agency

In addition to the substantive priority areas, the EEOC states that it is committed to using an integrated approach to consider ideas, strategies and best practices across the agency. It looks to reinforce consultation and collaboration between the investigative staff and the EEOC’s lawyers who litigate the cases. It also looks to increase the collaborative efforts between the federal and private sector staff, especially with respect to protecting LGBT workers. It also looks to enhance a coordinated and consistent nation message when it comes to education and outreach activities.

Next Steps

The EEOC accepted comments from interested parties on its draft strategic plan through January 8, 2018. The agency is expected to review submissions and approve its final version of the plan in the coming months.

January 8, 2018

Confidential Sexual Harassment Settlements No Longer Tax Deductible

Steven Gutierrez

By Steve Gutierrez

The recently enacted tax reform bill contains a short provision that could significantly affect whether and how employers settle sexual harassment claims. Section 13307 of the Tax Cuts and Jobs Act states that no deduction is allowed for any settlement or payment related to sexual harassment or sexual abuse if the settlement or payment is subject to a nondisclosure agreement. The new provision also prohibits a tax deduction for attorney’s fees related to confidential sexual harassment settlements or payments.

Deductibility Hinges On Confidentiality of Settlement

The new tax provision eliminates a tax deduction for sexual harassment-related settlements only if the settlement or payment is subject to a nondisclosure agreement. In other words, if an employer requires the alleged victim of sexual harassment or abuse to keep the settlement (and presumably the underlying claim) confidential, then the amount of the payment and any attendant attorney’s fees are not tax deductible. Sexual harassment/abuse settlements and related attorney’s fees remain tax deductible if they are not subject to a nondisclosure agreement.

The policy behind this provision appears to be in response to the recent spate of sexual harassment and abuse claims coming to light. The “#MeToo” campaign has raised significant concerns about companies and their high-level employees hiding behind nondisclosure agreements to avoid public scrutiny about unlawful sexual conduct in the workplace. Repeat offenders often keep their jobs when their employers pay off the victims in secret. By eliminating the tax deduction for confidential settlements and related attorney’s fees, companies will be forced to weigh confidentiality against tax deductibility when deciding whether to settle each claim.

What If Sexual Harassment/Abuse Is Only One of Multiple Claims Being Settled?

One of the questions left unanswered in this new tax reform provision is what happens to the tax deduction for payments that settle more than one kind of employment claim. In many cases, the victim of sexual harassment or sexual abuse brings other claims against his or her employer, such as retaliation, gender discrimination, violation of the Equal Pay Act, or defamation. The language of the provision is unclear as to what is meant by any settlement or payment related to sexual harassment or sexual abuse. One could argue that a retaliation claim that arose from an adverse action following a complaint of sexual misconduct would be related to the sexual harassment claim. But what about an Equal Pay Act claim? Is that related to sexual harassment or sexual abuse?

It is unclear whether confidential settlement payments related to these other types of employment claims will remain tax deductible when lumped in with a sexual harassment settlement. This open question will likely lead employers to separate settlement agreements and payments for non-sexual harassment claims in order to keep the settlement of these other types of claims confidential and tax deductible. It also could lead employers (on likely advice from their attorneys) to structure settlements of multiple claims with an allocation of only a small amount, say $100, to the settlement of the sexual harassment claim, with the remainder of any settlement payment attributed to other types of claims alleged by the victim. Absent any clarification on this issue, we expect this will be the subject of much litigation down the road. In the meantime, companies and their attorneys likely will use creative drafting of settlements to try to separate unrelated claims in order to keep the settlement of non-sexual-harassment claims confidential and retain the deductibility of payments and attorney’s fees incurred for non-harassment matters.

Deductibility of Victim’s Attorney’s Fees

Another open question is whether the denial of deductibility applies only to the companies making settlement payments and their own attorney’s fees related to such settlements, or if it applies to the attorney’s fees incurred by the victim as well. The new provision denying deductibility for settlements subject to nondisclosure agreements amends section 162 of the Internal Revenue Code (IRC) which is the section that allows deductions for ordinary and necessary trade or business expenses paid or incurred during the course of a taxable year. Generally, an individual would not be able to take a business deduction under IRC Section 162. However, the language in the new provision does not make it clear that it applies only to the business’s own attorney’s fees, thus leaving open an interpretation that it also prohibits the victim of sexual harassment or sexual abuse from deducting his or her attorney’s fees related to settlements of such claims. It also could be interpreted to deny the deduction to a business that pays the victim’s attorney’s fees as part of a confidential settlement.

This could hit victims hard as those who sign nondisclosure agreements may have to pay taxes on the entire settlement, including any amounts paid to cover his or her attorney’s fees. Or, it could lead victims to reject any settlement containing a nondisclosure provision in order to avoid paying taxes on the attorney’s fee portion of the settlement payment.  It also may make employers less likely to agree to pay the victim’s attorney’s fees as part of a confidential settlement because the total amount of fees paid to attorneys on both sides would not be deductible as a business expense. It is unclear whether Congress meant to hamstring victims in this way, or if it was the result of inarticulate drafting. We will have to see whether a correction or guidance is issued to clarify how the new denial of deductibility provision affects a victim’s ability to deduct attorney’s fees.

Get Advice Before Settling

The denial of deductibility provision affects any amounts paid or incurred after December 22, 2017 (when the tax reform act became effective). This makes one thing about this new tax deduction provision clear – employers should get advice from competent counsel and tax professionals before settling any sexual harassment or sexual abuse claims. Employers will need to evaluate each case individually to decide whether confidentiality trumps deductibility. Then, after the employer decides whether to impose a nondisclosure requirement on the alleged victim of sexual harassment/abuse, the settlement agreement must be drafted carefully in light of this new provision. If the victim asserts multiple claims, employers may be able to keep the settlement of non-harassment claims both confidential and deductible, if the settlement agreement is drafted correctly.

The bottom line is seek advice early and don’t use boilerplate settlement agreements without considering the tax deductibility consequences of nondisclosure provisions.

January 2, 2018

Sexual Harassment – Employers Should Act Now

By Mark Wiletsky

Roger Ailes, Bill O’Reilly, Harvey Weinstein, Kevin Spacey, Charlie Rose, Matt Lauer, politicians from both sides of the aisle – the list of prominent individuals accused of sexual harassment and assault continues to grow. And as sexual harassment dominates the headlines, workers are coming forward in increasing numbers to describe inappropriate sexual conduct in the workplace.

This heightened awareness by both the public and employees should make every employer pause to consider if it is doing enough to keep employees safe and free from harassment. Here are our recommendations for steps you should take right now to help prevent your organization from appearing in the headlines.

Have a Strong Anti-Harassment Policy

Every employer should have a written policy that prohibits sexual harassment in the workplace. If you do not have one, you should strongly consider implementing one to ensure your employees know that sexual harassment is absolutely prohibited. If you already have one, review it to ensure that it includes the following provisions:

  • zero tolerance for unlawful harassment and inappropriate sexual conduct in the workplace
  • examples of unacceptable physical conduct, such as unwelcome touching, hugging, kissing, groping, and gestures, as well as inappropriate verbal or visual conduct, such as sexual jokes, emails, cartoons, pictures, and propositions
  • requests for sexual favors or demands to engage in intimate relationships will not tolerated
  • policy applies to inappropriate conduct by managers, co-workers, vendors, customers, and others who come into contact with your employees
  • every employee is expected to report any harassment that he or she experiences or witnesses
  • reporting mechanism that offers two or more reporting channels (such as a supervisor and the human resources manager)
  • commitment to take complaints seriously through timely and thorough investigation
  • no retaliation or adverse consequences will occur to those who report sexual harassment or cooperate in any investigation or proceeding
  • employees found to have engaged in sexual harassment or other inappropriate conduct will be subject to discipline, up to and including termination.

Train Both Managers and Employees

A policy does little good if your employees are not aware of it. Take this opportunity to conduct sexual harassment training for your entire workforce. Live in-person presentations may be the best way to train your employees, allowing you to take questions and emphasize your organization’s commitment to preventing and resolving any harassment issues. If live training sessions are impossible, offer video or recorded training. Provide specialized training to your executives, managers, and supervisors so that you can stress their input in creating a culture that is free of harassment, and to help them recognize and learn how to handle harassment scenarios.

Encourage Reporting of Inappropriate Conduct 

Employees won’t report harassment to you if they feel their complaint will fall on deaf ears.
They may, instead, talk to the media or an attorney. Consequently, management and human resources professionals need to encourage reporting of workplace improprieties, no matter who it involves or how sensitive the accusation. If you do not welcome complaints, you will not have an opportunity to nip inappropriate conduct in the bud or resolve situations that could prove highly detrimental to your company. 

Investigate Every Complaint

You must treat every report of sexual misconduct or harassment seriously and conduct a timely, thorough investigation to determine whether the alleged conduct occurred. If the complaint is against your company president or another high-ranking individual, you still must investigate it in the same vigorous manner you would for any other employee accused of the misconduct. Consider whether you need to hire outside counsel or a third-party investigator to preserve privilege and to avoid allegations that the investigator was biased because he or she reports to the person accused of misconduct. Take time now to make sure you have an investigation process in place so that when a report of harassment comes in, you don’t waste time determining who does what. 

Take Prompt, Appropriate Action

As you receive a sexual harassment complaint and begin an investigation, you need to determine what action, if any, should be taken pending the investigation’s outcome. You may need to place the alleged harasser on leave, or you may need to separate workers so that they work on separate shifts or in different locations. Your duty is to stop any harassment from occurring, so take whatever steps may be necessary to do that. Then, when you have sufficient facts about the alleged harassment, determine what action is warranted to resolve it. If you conclude that harassment likely occurred, you need to impose consequences. Depending on the severity, that could mean immediate termination of employment. Remember, zero tolerance means no unlawful harassment goes unpunished.

Preventing and Resolving Sexual Harassment Should Help Keep You Out of the News

Because the topic of sexual harassment is so hot right now, take the time to recommit your organization to preventing and resolving workplace harassment by following the steps above. Your efforts now will go a long way in avoiding surprise allegations in the future.

July 5, 2017

New Nevada Employment Laws – Part 1: Pregnancy Accommodations and Nursing Mothers

By Dora Lane 

The Nevada Legislature was very busy this year, passing several significant employment-related bills that will affect Nevada employers. Here is my first summary of new Nevada employment laws you’ll need to know about, addressing protections and accommodations for pregnant applicants and employees, and break times and suitable facilities for expressing breast milk.

Nevada Pregnant Workers’ Fairness Act

Senate Bill 253 created the Nevada Pregnant Workers’ Fairness Act, which applies to employers with 15 or more employees (for at least 20 weeks in the current or preceding year). This new law makes it unlawful for an employer to do any of the following (except when the action taken is based upon a bona fide occupational qualification):

  1. Refuse to provide a reasonable accommodation to a female employee or applicant, if requested, for a condition of the employee or applicant relating to pregnancy, childbirth or a related medical condition, unless the accommodation would impose an undue hardship on the business (as discussed below);
  2. Take an adverse employment action against a female employee because the employee requests or uses a reasonable accommodation for a condition of the employee related to pregnancy, childbirth or a related medical condition, such as failing to promote the employee, requiring the employee to transfer to another position, declining to reinstate the employee to the same or equivalent position after the employee comes back to work, or taking “any other action which affects the terms or conditions of employment in a manner which is not desired by the employee.”
  3. Deny an employment opportunity to a qualified female applicant or employee based on their need for a reasonable accommodation for a condition related to pregnancy, childbirth, or a related medical condition;
  4. Require a female applicant or employee who is affected by a condition related to pregnancy, childbirth, or a related medical condition to accept an accommodation that the employee or applicant did not request or chooses not to accept; and
  5. Require a female employee who is affected by a condition related to pregnancy, childbirth, or a related medical condition to take leave from employment if a reasonable accommodation for any such condition of the employee is available that would allow the employee to continue to work.

The law defines a condition related to pregnancy, childbirth, or a related medical condition as a physical or mental condition intrinsic to pregnancy or childbirth that includes, without limitation, lactation or the need to express breast milk for a nursing child. “Related medical condition” is further defined as any medically recognized physical or mental condition related to pregnancy, childbirth, or recovery from pregnancy or childbirth, such as mastitis or other lactation-related medical condition, gestational diabetes, pregnancy-induced hypertension, preeclampsia, post-partum depression, loss or end of pregnancy and recovery from loss or end of pregnancy.

Pregnancy Accommodations 

In the event an applicant or employee seeks a reasonable accommodation for a pregnancy-related condition, the new law requires the employer and employee to engage in a timely, good-faith interactive process to arrive at an effective, reasonable accommodation for the applicant or employee. Examples of reasonable accommodations include: (1) modifying equipment or providing different seating; (2) revising break schedules (as to frequency or duration); (3) providing a space in an area other than a bathroom that might be used for expressing breast milk; (4) providing assistance with manual labor if the manual labor is incidental to the primary work duties of the employee; (5) authorizing light duty; (6) temporarily transferring the employee to a less strenuous or hazardous position; or (7) restructuring a position or providing a modified work schedule.

An employer is not, however, required to create a new position as an accommodation (unless the employer has created or would create such a position to accommodate other classes of employees). An employer is also not required to fire another employee, transfer any employee with more seniority, or promote any employee who is not qualified to perform the job (unless the employer has taken or would take such an action to accommodate other classes of employees).

An employer seeking to show that a requested accommodation is an undue burden has to demonstrate that the accommodation is significantly difficult to provide or expensive, considering, without limitation: (1) the nature and cost of the accommodation; (2) the overall financial resources of the employer; (3) the overall size of the employer’s business with respect to the number of its employees, and the number, type, and location of available facilities; and (4) the effect the accommodation would have on the employer’s expenses and resources or on the employer’s operations. Evidence that the employer provides or would be required to provide a similar accommodation to a similarly situated applicant or employee creates a rebuttable presumption that the accommodation does not impose an undue hardship on the employer.

Notice Requirements 

SB 253 also requires employers to provide a written or electronic notice of the rights conferred by the Nevada Pregnant Workers’ Fairness Act to employees, including the right that a female employee is entitled to a reasonable accommodation for a condition related to pregnancy, childbirth, or a related medical condition. The notice must be provided upon commencement of employment and within 10 days after the employee notifies her supervisor that she is pregnant. The notice must also be posted in a conspicuous place at the employer’s business location, in an area accessible to employees.

No Retaliation 

SB 253 provides anti-retaliation protections for employees or applicants who oppose any practice made unlawful by the Nevada Pregnant Workers’ Act, or who have made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing related to the Act.

Licensed Contractors Exempt From Certain Provisions 

Employers who are licensed contractors under NRS Chapter 624 are not subject to the requirement to provide suitable breast milk expression facilities (other than a bathroom) if the employee is performing work on a construction site located more than 3 miles from the employer’s regular place of business. Such employers are, instead, encouraged to provide suitable breast milk expression facilities to the extent practicable. In addition, these employers are exempt from the requirements of Sections 4 and 5 above (requiring undesired accommodations or requiring leave) if the employee’s work duties include manual labor.

Considerations For Nursing Mothers 

Under AB 113, public and private employers in Nevada are required to provide an employee who is a mother of a child under one year of age with (1) reasonable break time, with or without pay, to express breast milk as needed; and (2) a place (other than a bathroom), which is reasonably free from dirt and pollution, protected from the view of others and free from intrusion by others, where the employee may express breast milk. If break time must be compensated because of an existing collective bargaining agreement, then any break time taken to express milk must also be compensated.

This new law does not apply to private employers who employ fewer than 50 employees if the requirements it imposes would constitute an undue hardship on the employer, considering the size, financial resources, nature, and structure of the employer’s business. If a private employer determines that providing reasonable break time and suitable breast milk expression facilities will cause an undue burden on the employer, the employee and the employer may meet to agree on a reasonable alternative. If the parties cannot reach an agreement, the employer can require the employee to accept the reasonable alternative selected by the employer.

Both public and private employers are prohibited from retaliating or encouraging another to retaliate against an employee for (i) taking the time to express breast milk or using the facilities designated for such expression; or (ii) taking any action to require the employer to comply with the AB 113 requirements, including filing a complaint, testifying, assisting, or participating in any manner in an investigation, proceeding, or hearing to enforce the provisions of AB 113.

Contractors licensed under NRS Chapter 624 are not required to comply with AB 113 with regard to employees who perform work at a construction jobsite located at least 3 miles from the employer’s regular place of business.

For purposes of AB 113, “public body” means:

  • The State of Nevada or any of its agencies, instrumentalities, or corporations;
  • The Nevada System of Higher Education; or
  • Any political subdivision of the State of Nevada or any public or quasi-public corporation organized under the laws of the State of Nevada, including counties, cities, unincorporated towns, school districts, charter schools, hospital districts, irrigation districts, and other special districts.

AB 113 does not, however, apply to the Department of Corrections, which is encouraged to comply with the provisions of AB 113 to the extent practicable.

More To Come

Stay tuned for more information about additional significant employment-related laws passed in this year’s legislative session in Nevada. If you have questions about these new laws, please be sure to reach out to your Nevada employment counsel.

 

April 19, 2017

Retroactive Leniency Is Not A Reasonable Accommodation

By Brad Cave

Is an employer required to excuse misconduct that was the result of the employee’s disability? The Tenth Circuit Court of Appeals recently looked at this issue and came to an interesting conclusion.

Janna DeWitt has Type I diabetes and is insulin dependent. Beginning in 1997, DeWitt worked for Southwestern Bell Telephone Company (SW Bell) as a customer service representative in its Wichita, Kansas call center. Recognizing that DeWitt had a disability covered by the Americans with Disabilities Act (ADA), SW Bell permitted her to take breaks as needed to eat or drink in order to raise her blood sugar level. SW Bell also granted DeWitt FMLA leave which she took intermittently for health issues related to her diabetes.

Last Chance Agreement

In 2010, DeWitt made an error by failing to shut down service on a customer’s account after the customer cancelled service. Failure to remove a service plan after cancellation was known as a cramming violation under SW Bell’s Code of Business Conduct and was a terminable offense. DeWitt was suspended following her cramming incident until she could address the issue with her supervisors in what the company called a “Day in Court.” Her Second and Third Line Supervisors decided to place DeWitt on a Last Chance Agreement under which any additional failure to perform satisfactorily could lead to further discipline, up to and including termination.

Terminated For Hanging Up On Customers

Two months after the cramming incident, DeWitt suffered a severe drop in blood sugar at work which she stated caused her to experience disorientation, confusion, and lethargy, making her unable to communicate with anyone. After DeWitt found that she was locked out of her computer, she contacted her First Line Supervisor, Tom Heumann, for assistance. Heumann did not address her locked computer but instead told the Center Support Manager, Beth Kloxin, that  he had been monitoring De Witt’s calls and found that she had hung up on at least two customers. Kloxin responded by saying “I finally got that bitch” and did a little dance.

Later that day, Heumann and Kloxin met with DeWitt for a suspension meeting because of her two customer hang-ups. A union steward also attended the meeting. DeWitt explained that she did not remember taking the dropped calls and that she had been experiencing very low blood sugar levels at the time. Although they reviewed recordings of the dropped calls, DeWitt still did not remember them and asked if they were sure that the calls were hers. Heumann then told DeWitt that she was suspended and that a “Day in Court” would be held at a later date. In response to a request from Kloxin and the union steward, DeWitt provided her blood sugar levels for that afternoon.

About a week later, SW Bell held DeWitt’s “Day in Court.” DeWitt again explained that she did not remember taking the calls due to a severe drop in her blood sugar. Five days later, SW Bell terminated DeWitt for hanging up on two customers in violation of the company’s Code of Business Conduct and her Last Chance Agreement.

ADA and FMLA Claims

DeWitt filed discrimination charges with the Equal Employment Opportunity Commission (EEOC) and after receiving her notice of right to sue, filed a lawsuit against SW Bell in federal court. She alleged that the company failed to accommodate her disability and terminated her because of her disability in violation of the ADA, and retaliated against her for taking FMLA leave. After the district court ruled in favor of SW Bell on all of her claims on summary judgment, DeWitt appealed to the Tenth Circuit Court of Appeals (whose decisions apply to Colorado, Utah, Wyoming, Oklahoma, Kansas, and New Mexico).

Employer Need Not Excuse Or Overlook Misconduct 

DeWitt asserted that SW Bell failed to accommodate her disability by not excusing her dropped calls which she says were caused by her disability. The Court disagreed, stating that the ADA does not require employers to reasonably accommodate an employee’s disability by overlooking past misconduct, even when the misconduct is caused by the disability. Instead, the Court cited the EEOC’s ADA Enforcement Guidance which states that reasonable accommodations are “always prospective.”

The Court found that DeWitt had not requested a reasonable accommodation to address concerns that her diabetes could cause her to drop calls. Using a disability as an “after-the-fact excuse” for workplace misconduct is unreasonable and employers need not ignore or overlook past misconduct. Therefore, because asking for retroactive leniency is not a reasonable ADA accommodation, DeWitt’s accommodation claim failed.

Decision-Maker’s Honest Belief In Termination Reasons

On DeWitt’s ADA termination claim, the Court assumed (without deciding) that DeWitt had established that she was a disabled person under the ADA, and was qualified to perform the essential functions of her job. The Court also accepted that SW Bell had provided a legitimate, non-discriminatory reason for terminating DeWitt, namely that she had hung up on at least two customers while on a Last Chance Agreement. To prevail, DeWitt needed to show that SW Bell’s stated reasons for her termination were pretext for discriminating against her.

DeWitt argued that dropping the calls was not intentional but instead, was a result of her disability – her severely low blood sugar at the time. The Court said that didn’t matter. Instead what mattered was whether the decision-maker, Kimberly Baskett-McEnany, who was DeWitt’s Third Line Supervisor, honestly believed that the hang-ups were intentional and acted on that belief in good faith. Finding no evidence to undercut Baskett-McEnany’s belief, the Court ruled that DeWitt’s ADA discrimination claim failed.

FMLA Retaliation Claim Also Fails

DeWitt also argued that SW Bell terminated her in retaliation for her use of FMLA leave. She offered evidence from a former manager at the call center who stated that employees who used FMLA leave were targeted as employees that should be terminated and that the company would look for other reasons to terminate such employees. DeWitt also pointed to Kloxin’s response to Heumann’s revelation that DeWitt had hung up on customers, saying “I finally got that bitch,” as evidence that SW Bell terminated her for using FMLA leave.

Again, the Court rejected DeWitt’s arguments and her FMLA retaliation claim. The Court stated that the former manager’s comments about the company targeting employees who used FMLA leave was no more than speculation, as that person had no knowledge of and was not involved in the company’s decision to terminate DeWitt. In addition, the Court determined that Kloxin’s subjective beliefs were irrelevant as she was not the person who decided to terminate DeWitt. Finding no evidence to send DeWitt’s claims to a jury, the Court upheld the grant of summary judgment in favor of SW Bell on all claims.

Key Lessons

This case highlights some significant management practices that can help defeat discrimination and retaliation claims. First, hold all employees accountable to your standards of conduct. SW Bell terminated DeWitt for violating its code of conduct, providing the necessary legitimate, non-discriminatory reason for actions. In addition, because DeWitt could not provide evidence that other employees who similarly violated the conduct rules were treated more favorably than she was treated, she was unable to show pretext. Second, if a supervisor has a potentially unlawful animus or bias against an employee, take that person out of the decision-making process. Although Kloxin appeared to express animosity against DeWitt (although it is not clear that her animosity was driven by an unlawful motive), she was not involved in the decision to terminate DeWitt and that distinction drove the Court to reject DeWitt’s claims. Finally, remember that a reasonable accommodation applies prospectively. You need not excuse poor performance or misconduct for which no accommodation was requested. That said, when dealing with an employee with a known disability, weigh all employment decisions very carefully and make sure your actions are well supported by your policies and past practices.

April 6, 2017

Seventh Circuit: Title VII Prohibits Sexual-Orientation Discrimination

By Dustin Berger

Sexual orientation discrimination is discrimination on the basis of sex for the purposes of Title VII. So ruled the majority of federal judges for the Seventh Circuit Court of Appeals on April 4, 2017. This groundbreaking ruling is the first time that a federal appellate court has held that Title VII protects workers against discrimination due to their sexual orientation. Hively v. Ivy Tech Cmty. Coll., No. 15-1720 (7th Cir. April 4, 2017).

Title VII Prohibits Discrimination Because of Sex

Title VII of the Civil Rights Act of 1964 makes it unlawful for employers to discriminate on the basis of a person’s “race, color, religion, sex, or national origin … .”  The question before the Seventh Circuit was whether discrimination on the basis of sexual orientation is a form of discrimination on the basis of “sex,” and, therefore, prohibited by Title VII.

In 2015, the Equal Employment Opportunity Commission (EEOC) began to assert the position that Title VII does indeed prohibit sexual orientation discrimination. But, the EEOC’s position is not binding law. The U.S. Supreme Court has not ruled on this question, but all eleven federal courts of appeal, including the Seventh Circuit, had previously ruled that Title VII does not protect employees against sexual orientation discrimination. The full panel of regular judges on the Seventh Circuit, however, agreed to address this issue anew, with the majority concluding that sex discrimination includes discrimination on the basis of a person’s sexual orientation.

Lesbian Professor Claimed Discrimination Based on Her Sexual Orientation

To put a face to the case before the court, we look to Kimberly Hively, a part-time adjunct professor at Ivy Tech Community College in South Bend, Indiana. Hively is openly gay. She began teaching at Ivy Tech in 2000. Between 2009 and 2014, she applied for at least six full-time positions but was not selected for any of them. In late 2013, Hively filed a charge with the EEOC, alleging that she was being discriminated against on the basis of her sexual orientation in violation of Title VII for being denied a full-time position. Then, in July 2014, Ivy Tech did not renew Hively’s part-time contract.

After receiving her right to sue letter, Hively filed her discrimination lawsuit in federal district court. Ivy Tech sought to dismiss the lawsuit on grounds that Title VII did not protect against sexual orientation discrimination. The district court agreed, and dismissed Hively’s lawsuit. On appeal to a three-judge panel of the Seventh Circuit, the dismissal was upheld, but the panel wrote that it was bound by earlier Seventh Circuit precedent to so rule. That panel, however, criticized the circuit’s precedent as inconsistent and impractical and opined that the “handwriting was on the wall” to recognize that sexual orientation discrimination was a subset of sex discrimination under Title VII.

The full panel of Seventh Circuit judges then agreed to hear Hively’s case en banc. They concluded that Title VII’s prohibition on sex discrimination also prohibited sexual orientation discrimination for two reasons. First, discrimination on the basis of sexual orientation is impermissible “sex stereotyping.” Second, discrimination on the basis of sexual orientation is a form of associational discrimination based on sex.

Ultimate Case of Sex Stereotyping

In its discussion of “sex stereotyping,” the Court relied on the Supreme Court’s 1989 ruling in Price Waterhouse v. Hopkins, 490 U.S. 228, which recognized that discrimination based on an employee’s failure to act in a manner that was stereotypical of his or her sex was prohibited as sex discrimination under Title VII. In that case, Hopkins had alleged that her employer was discriminating only against women who behaved in what her employer viewed as too “masculine” by not wearing makeup, jewelry, and traditional female clothing. The Seventh Circuit stated that Hively “represents the ultimate case of failure to conform to the female stereotype (at least as understood in a place such as modern America, which views heterosexuality as the norm and other forms of sexuality as exceptional): she is not heterosexual.”  Finding that Hively was not conforming to a stereotype based on the sex of her partner, the Court ruled that employment discrimination based on Hively’s sexual orientation is actionable under Title VII.

Associational Discrimination

Hively also argued that discrimination based on sexual orientation is sex discrimination under the associational theory. After Supreme Court cases, including the Loving case in which the Court held that laws restricting the freedom to marry based on race were unconstitutional, it is accepted law that a person who is discriminated against because of the protected characteristic of a person with whom he or she associates is being disadvantaged because of her own traits. In Hively’s case, if the sex of her partner (female rather than male) led to her being treated unfavorably in the workplace, then that distinction is “because of sex.” The Seventh Circuit stated: “No matter which category is involved, the essence of the claim is that the plaintiff would not be suffering the adverse action had his or her sex, race, color, national origin, or religion been different.”

What This Ruling Means For Employers

For employers located in Indiana, Illinois, and Wisconsin, the Seventh Circuit’s decision is binding precedent. Employers with fifteen or more employees (and hence covered by Title VII) in those states should update their policies and practices immediately to ensure that they do not permit discrimination, harassment, or retaliation on the basis of sexual orientation.

For employers located outside of those three states, existing court rulings denying application of Title VII to sexual orientation employment discrimination claims still apply. That said, the tide is turning. Indeed, as Judge Posner explained in his concurrence, as the courts have continued to grapple with the scope of Title VII’s prohibition on sex discrimination, they have failed “to maintain a plausible, defensible line between sex discrimination and sexual-orientation discrimination” and begun to realize that “homosexuality is nothing worse than failing to fulfill stereotypical gender roles.” Other courts are beginning to reach the same conclusion. The Chief Judge of the Second Circuit Court of Appeals, in a recent concurrence, noted significant merit to the arguments that sexual-orientation discrimination was a form of impermissible sex discrimination and invited his court to reconsider the issue: “I respectfully think that in the context of an appropriate case our Court should consider reexamining the holding that sexual orientation discrimination claims are not cognizable under Title VII.” Christiansen v. Omnicom Group, No. 16-748 (7th Cir. Mar. 27, 2017).

Beyond the judicial realm, many state and local anti-discrimination laws explicitly cover sexual orientation discrimination and the EEOC continutes to take the position that Title VII prohibits sexual-orientation discrimination. Should the U.S. Supreme Court take up the issue or Congress pass legislation amending Title VII, we may get a uniform nationwide interpretation of “sex discrimination” under Title VII. Until that occurs, employers are on notice that they cannot safely rely on existing case law to conclude that sexual-orientation discrimination is permissible under Title VII.