It Depends on What the Meaning of the Word “Sex” Is

Both cases involve allegations of sexual harassment and hostile work environment against homosexual employees. The first case, EEOC v. Scott Medical Center, was brought against a health care provider in Pennsylvania, alleging that the provider did not take prompt and effective action to prevent or alleviate an intolerable work environment for a gay male employee who is alleged to have been constructively discharged. The second case, EEOC v. Pallet Companies, was brought against a Maryland employer, alleging that a lesbian employee was subjected to continuous harassment by a male superior and that she was terminated in retaliation for complaining about his conduct. In both cases, the harassing comments and conduct were based on the employees’ status as gay or lesbian. The initiation of these lawsuits by the EEOC is historic in that it is the first time the EEOC has brought an action against a private employer for Title VII discrimination on the basis of sexual orientation.

Interestingly, for many years the law has been unsettled as to whether or not Title VII’s prohibition against discrimination “based on sex” included discrimination based on sexual orientation. In fact, since the 1990’s various members of Congress have unsuccessfully attempted to pass some form of federal legislation that would explicitly identify sexual orientation, and more recently, gender identity, as bases for impermissible employment discrimination. In July 2015, however, the EEOC issued an agency decision clarifying that, at least from the EEOC’s point of view, discrimination based on sexual orientation falls within the scope of Title VII. See Baldwin v. DOT, EEOC Appeal No. 0120133080 (Jul. 15, 2015) (http://www.eeoc.gov/decisions/0120133080.pdf). In its 17-page final agency decision, the EEOC engaged in an exhaustive analysis of prior court rulings and their support of the ultimate conclusion that sexual orientation is a basis for discrimination under Title VII. This analysis included the following:

• Title VII’s prohibition against an employer’s reliance on sex-based considerations, or other consideration of gender, when making employment decisions applies equally to claims brought by lesbian, gay, and bisexual individuals under Title VII.
• Sexual orientation discrimination falls within the scope of Title VII sex discrimination “because it necessarily entails treating an employee less favorably because of the employee’s sex.” It further discriminates against employees on the basis of sex because the employee is penalized for associating romantically with a member of the same sex.
• In 1989, the U.S. Supreme Court in Price Waterhouse v. Hopkins established that Title VII prohibits discrimination based on an employee’s noncompliance with sex stereotypes and gender norms.

South Carolina employers who have relied on the uncertainty of the law with respect to whether Title VII covers sexual orientation, or who have not examined this issue in detail when developing non-discrimination policies and procedures, should take note of last week’s filings by the EEOC. The Pallet Companies case should be especially noted by South Carolina employers because it is a Maryland case that could ultimately be considered by the U.S. Court of Appeals for the Fourth Circuit, which also governs South Carolina. In addition, other recent decisions by the Maryland federal district court indicate that transgendered status should also be included within the scope of Title VII. See, e.g., Finkle v. Howard County, 12 F.Supp.3d 780 (D.Md. 2014) (“Plaintiff’s claim that she was discriminated against ‘because of her obvious transgendered status’ is a cognizable claim of sex discrimination under Title VII.”).