Supreme Court Holds Employers Cannot Discriminate Based on Sexual Orientation or Transgender Status

Supreme Court Title VII

By Kristen R. Kovach & Marc E. Gustafson

On Monday June 15, 2020, the Supreme Court announced its decision in the case of Bostock v. Clayton County, holding that employees cannot be fired because of their sexual orientation or transgender status. Before this decision, Title VII of the Civil Rights Act of 1964 protected employees from sex-based discrimination. This protection, however, was limited to discrimination based on whether the person was a man or a woman. The Bostock decision clarifies that the definition of “sex” as it is used in Title VII necessarily protects sexual orientation and transgender status as well.

At the state level, only 22 states and D.C. prohibited employment discrimination based on both sexual orientation and gender identity before the Bostock opinion. North Carolina was not one of these states. North Carolina’s General Statute § 143-422.2(a) protects employees from adverse action based on sex, but “sex” was limited to gender. Now, as the Supreme Court explains, “sex” unequivocally includes sexual identity and gender identity under Title VII.

Since North Carolina has not historically protected these groups, employers should consider updating policies, handbooks, and anti-discrimination training to reflect this change and inform employees of their rights and expectations in the workplace. Human resources officers should consider updating their practices on addressing internal discrimination complaints based on sexual orientation or gender identity. Employers should also work to prevent a hostile work environment on the basis of sexual orientation or transgender status. Just like with other classes protected under Title VII, such as race, employers must investigate complaints of discrimination based on sexual orientation or gender identity.

A potential gray area in this decision comes in the form of religious liberties. The Civil Rights Act expressly exempts religious organizations from Title VII’s mandates. The Religious Freedom Restoration Act also adds to religious protections by prohibiting the federal government from “substantially burdening a person’s exercise of religion unless it demonstrates that doing so both furthers a compelling governmental interest and represents the least restrictive means of furthering that interest.” The Court left unanswered the question of what effect this exemption and the Religious Freedom Restoration Act have on the Bostock opinion and on employers.

As Justice Gorsuch succinctly said in the Bostock opinion, “An employer who fires an individual merely for being gay or transgender defies the law.” Employers need to ensure that their hiring, firing, and working practices comply with Title VII and this decision.