On February 26, 2018, a majority of the entire U.S. Court of Appeals for the Second Circuit held, in Zarda v. Altitude Express Inc., that Title VII prohibits workplace discrimination on the basis of sexual orientation. With this ruling, the Second Circuit becomes the second federal appellate court to reverse its prior precedent and reach this conclusion.

In 2017, the U.S. Court of Appeals for the Seventh Circuit, also sitting en banc, held that Title VII’s prohibition of sex discrimination also prohibits discrimination based on sexual orientation.¹ All of the other courts of appeal that have considered this issue have ruled that Title VII does not cover sexual orientation discrimination.² In December 2017, the U.S. Supreme Court declined to review a ruling by the U.S. Court of Appeals for Eleventh Circuit that reached a contrary conclusion.³ It is unclear at this point whether this decision will be appealed to the Supreme Court and, if so, whether the Court will resolve this split between the circuits.  

The plurality decision in Zarda relies on the three main arguments developed in this area of law and espoused by the EEOC:

1. Firing a woman who is attracted to women but not firing a man who is attracted to women is on its face discrimination based on sex, because “but for” the employee’s sex, the employer would not have terminated the employee;
2. Firing an employee because of the employee’s sexual orientation is unlawful associational discrimination—discrimination based on who the employee associates with or has a relationship—just as firing an employee for being in an interracial relationship is unlawful associational discrimination; and
3. Firing an employee based on the employee’s sexual orientation is unlawful sexual stereotyping because it is discrimination based on stereotypical notions that men should be attracted to women, not men, and women should be attracted to men, not women.

This case received some attention last summer when the U.S. Department of Justice filed an amicus brief urging the Second Circuit to hold that sexual orientation is not protected under Title VII.⁴  One of the DOJ's principal arguments was that since “sexual orientation” was not explicitly written into Title VII when it was passed or when it was amended in 1991, the court should not interpret it to include sexual orientation.   

The Second Circuit in Zarda noted that Title VII's prohibitions “often go beyond the principal evil to cover reasonably comparable evils.”  The court noted, for example, at one point sexual harassment was thought to be out of the scope of Title VII because it is not explicitly prohibited in the statute.

Employers in the Second Circuit (Connecticut, New York and Vermont) may see an upswing in sexual orientation claims brought under Title VII rather than or in addition to state law.  Employers outside of these states should remember that the EEOC continues to take the view that Title VII prohibits discrimination based on sexual orientation and should anticipate that the EEOC and/or private litigants are likely to continue to pursue these claims even in jurisdictions where the courts have rejected these claims.