Supreme Court Title VII Ruling

On June 15, 2020, the Supreme Court ruled 6-3 that employers may not discriminate against employees on the basis of sexual orientation or transgender status. Specifically, the Court held in Bostock v. Clayton County that Title VII of the Civil Rights Act of 1964 (“Title VII”), which prohibits discrimination on the basis of “sex,” also logically prohibits discrimination on the basis of sexual orientation or gender identity.

While many state and local laws (including, for example, Maryland, Washington D.C., New York, New Jersey, Connecticut, and—effective July 1, 2020—Virginia) already prohibit discrimination in employment on the basis of sexual orientation and gender identity, many states have not adopted these prohibitions. At this time, all employers with 15 or more employees should review their practices, policies and procedures to ensure that these new protections are clearly communicated to supervisors and employees.

We anticipate that this historic ruling may have a particularly significant impact on religious organizations. Many (but not all) of the established state and local laws protecting LGBTQ workplace rights contain robust exceptions for religious employers. Title VII contains a somewhat limited exception that exempts religious organizations from the application of Title VII “with respect to the employment of individuals of a particular religion to perform work connected with the carrying on by such [religious organization] of its activities.”

This has generally been interpreted to mean that: (1) religious organizations can discriminate with respect to religion, but cannot discriminate with respect to protected classes other than religion, such as race, sex, or national origin; and (2) religious organizations can only discriminate with respect to hiring, firing, and other “employment” decisions, but cannot discriminate with respect to the terms, conditions, or privileges of employment (including employee benefits). For example, a Christian organization could lawfully choose to hire only Christians, but it could not lawfully choose to pay Christian employees more than non-Christian employees. Nor could it lawfully choose to pay men more than women, even if it claimed that the practice was required by its religious tenets.

Because the Supreme Court has held that the term “sex” includes sexual orientation and transgender status, we expect employees to challenge those codes of conduct of religious employers that prohibit employees from engaging in homosexuality or transitioning from one’s natal gender, on the purported basis that such codes of conduct unlawfully discriminate against “sex” as opposed to “religion”. We also anticipate that employees will challenge restrictions in employee benefits plans based on sexual orientation or gender identity, such as a health plan’s exclusion of gender transition treatment. Indeed, the Supreme Court acknowledged that its decision would raise significant legal questions regarding the interplay between religious freedom and civil rights, and signaled that such decisions would have to be decided through future litigation or legislation.

In addition to the religious organization exception in Title VII, there may be other defenses available to religious employers that face a Title VII discrimination lawsuit, including a “ministerial” exemption or a defense based on the Religious Freedom Restoration Act. (The ministerial exemption requires a very careful factual analysis. While in most instances it will apply to rabbis, imams, priests, pastors and other clerics, it can also include such lay positions as a music worship leader or a teacher. Religious organizations that have traditionally sought to exempt an employee from labor and employment law protections on the basis of the ministerial exemption should ensure that reliance on this exemption is reasonable in this ever-evolving legal landscape.)

Religious organizations and other employers should carefully consider the impact of Bostock v. Clayton County on their employment policies, practices, and employee benefits plans. The attorneys at Smith & Downey are standing by to address any questions or concerns that employers may have and to provide training regarding all of these issues. Please contact us for further information.

Categories: Legal Update