On February 26, 2018, the Second Circuit became the second federal appellate court to rule that sexual orientation discrimination is prohibited by Title VII of the Civil Rights Act of 1964, following the Seventh Circuit’s April 2017 decision in Hively v. Ivy Tech Community College, which reached the same conclusion.

In the Second Circuit case, Zarda v. Altitude Express, Inc., a sky diving instructor claimed his former employer terminated him because he told a client he was gay. He brought a sex discrimination claim under Title VII, which prohibits discrimination on the basis of sex, but does not expressly include sexual orientation as a protected category.

Reversing its prior precedent, the Second Circuit explained that “legal doctrine evolves” and determined that Title VII bars sexual orientation discrimination under three theories:

1. Sexual orientation is a “function of sex.” If a woman is fired because she is attracted to women, and men are not fired for being attracted to women, her termination is based on the fact that she is a woman and thus “because of” her sex.
2. Discrimination based on one’s sexual orientation is impermissible sex stereotyping under Price Waterhouse v. Cooper. The notion that an individual should be attracted to members of the opposite sex is rooted in assumptions about the proper roles of men and women.
3. Sexual orientation discrimination is also a form of associational discrimination. It is unlawful for an employer to terminate an employee because of the employee’s relationship with a person of a particular sex, just as it is unlawful to make such decisions based on the race of an employee’s partner.

The Second Circuit’s ruling may signify a change in the tide as to whether Title VII prohibits sexual orientation discrimination. Before Zarda, the EEOC and the Seventh Circuit answered this question in the affirmative, while the Eleventh Circuit and the Department of Justice take the position that Title VII does not cover sexual orientation discrimination. It’s not clear whether Zarda will be appealed, but this issue is certainly ripe for the Supreme Court. In the meantime, the Second Circuit’s decision deepens the circuit split and may influence federal courts in other circuits that confront the question of sexual orientation discrimination under Title VII.

As the interpretation of Title VII continues to evolve, employers should regularly review their policies to ensure compliance with federal, state and local laws. Sexual orientation discrimination is already prohibited by many state and local laws, including laws in the Second Circuit (Connecticut, New York and Vermont), and the EEOC will accept and investigate sexual orientation discrimination claims throughout the US.

For more information, please contact your Baker McKenzie lawyer.