The Second Circuit joins the Seventh Circuit as the second U.S. Court of Appeals to hold that Title VII prohibits sexual orientation discrimination. The Equal Employment Opportunity Commission has also recognized sexual orientation as a protected class under Title VII. 

On February 26, 2018, the United States Court of Appeals for the Second Circuit, sitting en banc, held in Zarda v. Altitude Express, Inc. that Title VII of the Civil Rights Act of 1964 prohibits discrimination on the basis of sexual orientation as discrimination “because of… sex.” 

The Second Circuit (with jurisdiction over Connecticut, New York and Vermont) joins the Seventh Circuit (with jurisdiction over Illinois, Indiana and Wisconsin) as the second U.S. Court of Appeals to hold that Title VII prohibits sexual orientation discrimination. The Equal Employment Opportunity Commission (EEOC) has also recognized sexual orientation as a protected class under Title VII. To date, only the Eleventh Circuit (with jurisdiction over Alabama, Florida and Georgia) has rejected Title VII protections on the basis of sexual orientation. It is unclear whether the Supreme Court will address this issue in the near future, although the Second Circuit’s opinion in Zarda deepens the circuit split and could increase the likelihood of Supreme Court review.   

Case Background

Donald Zarda, a gay man, was a skydiving instructor at defendant Altitude Express who participated in tandem skydives with customers. A female customer claimed that Zarda touched her in an inappropriate manner and “disclosed his sexual orientation to excuse his behavior.” After the customer’s boyfriend complained to Zarda’s supervisor, he was fired. Zarda denied inappropriately touching the customer, and claimed he was terminated because of his reference to his sexual orientation. 

The trial court rejected Zarda’s Title VII sexual orientation discrimination claim because then-binding Second Circuit case law provided that a gender stereotype could not be grounded on one’s sexual orientation. A three-judge panel of the Second Circuit affirmed because it, too, was obliged to apply then-binding case law. The Second Circuit granted a rare hearing en banc (meaning a case heard before all judges of the court) to potentially revisit controlling law. 

The Court’s Analysis

The wide-ranging majority opinion in Zarda expressly overrules prior decisions rejecting Title VII protection on the basis of sexual orientation. Among the justifications proffered by the court for its holding, which in many respects mirror the EEOC’s position on the issue, are:  

• “[S]exual orientation discrimination is a subset of sex discrimination because sexual orientation is defined by one’s sex in relation to the sex of those to whom one is attracted, making it impossible for an employer to discriminate on the basis of sexual orientation without taking sex into account [emphasis in original].”
• “Sexual orientation discrimination is also based on assumptions or stereotypes about how members of a particular gender should be, including to whom they should be attracted.”
• “[S]exual orientation discrimination is associational discrimination because an adverse employment action that is motivated by the employer’s opposition to association between members of particular sexes discriminates against an employee on the basis of sex.” Zarda v. Altitude Express, Inc., No. 15-3775, 2018 WL 1040820, at *19 (2d Cir. Feb. 26, 2018).

Accordingly, the court found that Zarda’s Title VII sexual orientation discrimination theory was recognized by the law and could proceed.

What This Means for Employers

Zarda is a reminder that sexual orientation is a protected class under Title VII in at least six states (Connecticut, Illinois, Indiana, New York, Vermont and Wisconsin) and under numerous state and local laws (independent of federal law). 

Even in jurisdictions where the issue is unsettled, employers who do not prohibit sexual orientation discrimination likely are at a greater risk of being sued for sexual orientation discrimination. Therefore, employers should consider revising their policies and practices—particularly their Equal Employment Opportunity, Anti-Discrimination, Anti-Harassment, and Complaint Reporting policies and procedures—to clearly prohibit sexual orientation discrimination. Employers should also consider revising or supplementing any anti-harassment/anti-discrimination trainings they have previously developed or offered.

Zarda also offers several additional lessons that should not be overlooked by employers:

• Employers should be familiar with EEOC guidance and enforcement positions and craft employer policies and practices in light of this guidance. It is anticipated, for example, that the EEOC will soon release new unlawful harassment guidance. Employers should monitor the EEOC’s position on harassment and other matters, especially in light of the #MeToo movement’s momentum.
• Employers should not forget about state and local anti-discrimination laws that already prohibit sexual orientation discrimination (and other forms of discrimination that may not be prohibited under federal law). Although Zarda’s Title VII sexual orientation claim was rejected by the trial court originally, he nevertheless was permitted to proceed to trial on his state law sexual orientation discrimination claim. Notably, some state and local laws may provide for individual liability against co-employees and supervisors that generally is not available under federal anti-discrimination law.
• Even though Zarda did not complain that a customer was discriminating against him, employers whose employees are client-facing (or who interact with other nonemployee members of the public) may encounter such employee complaints about customer or third-party conduct. These employers would have an obligation to respond to such complaints of discrimination even though the alleged perpetrator is not a supervisor or co-employee.

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