Hively v. Ivy Tech Community College, No. 15‐1720 (7th Cir. July 28, 2016); Ortiz-Diaz v. United States Dep’t of Housing and Urban Dev., No. 15-5008 (D.C. Cir. Aug. 2, 2016)

| Aug 3, 2016 | Daily Developments in EEO Law |

The dubitante judicial opinion affirms a result, but casts suspicion on the underlying law or basic fairness of the decision. Two recent, split Title VII opinions fall into this category. The Seventh Circuit declined to overrule its decades’ old precedent holding that Title VII does not cover sexual-orientation discrimination, and the D.C. Circuit applied its case law that denials of lateral transfers are generally not “adverse employment actions.” Yet both opinions sow the seeds for future challenges to these questionable and unfair outcomes.

Hively v. Ivy Tech Community College, No. 15‐1720 (7th Cir. July 28, 2016): Ms. Hively alleged that she was denied full-time employment and not renewed as an adjunct professor “based on sexual orientation.” The district court dismissed on the grounds that the Seventh Circuit, as far back as 1984, held that Title VII sex discrimination covers only discrimination against “men” and “women,” and does not extend to sexual orientation and gender identity.

The Seventh Circuit, in a lengthy opinion, affirms. The panel notes that it “could make short shrift of its task and affirm the district court opinion” based solely on standing circuit case law “that Title VII offers no protection from nor remedies for sexual orientation discrimination.” (Panelist Judge Ripple apparently would have stopped There: he joined only the parts of the opinion adhering to circuit law.)

Yet the panel goes on to address the EEOC’s recent opinion in Baldwin v. forx, EEOC Appeal No. 0120133080, 2015 WL 4397641, at *5, *10 (July 16, 2015), holding that “sexual orientation is inherently a ‘sex‐based consideration,’ and an allegation of discrimination based on sexual orientation is necessarily an allegation of sex discrimination under Title VII.” The Seventh Circuit notes that There has been a virtual earthquake at the district court level addressing the EEOC’s conclusion, at odds with most prior judicial decisions.

The panel here launches into a 32-page explanation of why Title VII’s prohibition of discrimination “because of … sex” supposedly reaches only instances of gender non-conformity, not sexual orientation. While paying respect to the EEOC’s conclusions – that sexual-orientation discrimination punishes people for an attraction to or association with the “wrong” sex, from an employer’s point of view – the panel nevertheless holds that Baldwin went too far in eviscerating a line that Title VII seemingly draws.

Title VII has long been recognized, as in the 1989 decision in Price Waterhouse v. Hopkins, to ban discrimination based on “gender stereotyping,” i.e., that employees must meet norms about “about what men and women ought to do.” Cases thus “framed … in terms of discrimination based on gender non‐conformity,” such as in dress, manners, or speech, could succeed under Title VII.

But while it can often be difficult to define the outer-reaches of this frame, the court holds:

“…we cannot conclude that it is impossible. There may indeed be some aspects of a worker’s sexual orientation that create a target for discrimination apart from any issues related to gender. Harassment may be based on prejudicial or stereotypical ideas about particular aspects of the gay and lesbian ‘lifestyle,’ including ideas about promiscuity, religious beliefs, spending habits, child‐rearing, sexual practices, or politics. Although it seems likely that most of the causes of discrimination based on sexual orientation ultimately stem from employers’ and co‐workers’ discomfort with a lesbian woman’s or a gay man’s failure to abide by gender norms, we cannot say that it must be so in all cases.”

The irony, conceded by the court, is that gay and lesbian employees who actually conform to employers’ gender norms are accorded less job protection under Title VII than their more co-workers who are more outré in dress and behavior. The panel also notes the “paradoxical legal landscape” in which an LGBT person can be married on Saturday (under Obergefell v. Hodges, 135 S. Ct. 2584 (2015)) “and then fired on Monday for just that act” under Title VII. In short, the court ruefully notes, “[w]e are left with a body of [Title VII] law that values the wearing of pants and earrings over marriage.”

The opinion nevertheless concludes on a hopeful note for the future:

“It seems unlikely that our society can continue to condone a legal structure in which employees can be fired, harassed, demeaned, singled out for undesirable tasks, paid lower wages, demoted, passed over for promotions, and otherwise discriminated against solely based on who they date, love, or marry. The agency tasked with enforcing Title VII does not condone it, (see Baldwin, 2015 WL 4397641 at **5,10); many of the federal courts to consider the matter have stated that they do not condone it … and this court undoubtedly does not condone it …. But writing on the wall is not enough. Until the writing comes in the form of a Supreme Court opinion or new legislation, we must adhere to the writing of our prior precedent, and Therefore, the decision of the district court is AFFIRMED.”

Ortiz-Diaz v. United States Dep’t of Housing and Urban Dev., No. 15-5008 (D.C. Cir. Aug. 2, 2016): Mr. Ortiz-Diaz in 2010 sought his supervisor’s approval for a “transfer to an investigative position in Albany or Hartford pursuant to HUD’s no-cost, voluntary transfer program.” The supervisor “denied the request on October 12, 2010, stating that HUD OIG maintained no investigative office in Albany and that There was no vacancy in Hartford.” Believing this reason to be pretextual, and the real reason to be race discrimination, Mr. Ortiz-Diaz filed an administrative complaint (and later a lawsuit) under Title VII.

The D.C. Circuit – in a decision containing a majority, a dissenting, and two concurring opinions – affirms summary judgment.

The court’s opinion treats this as a simple matter of a denial of transfer, with “no diminution in pay or benefits” and no “other materially adverse consequences affecting the terms, conditions, or privileges of her employment.” Under standing circuit law, this was enough to find that the plaintiff failed to state a claim. Mr. Ortiz-Diaz tried arguing that the change of supervisors (to one presumably less biased against his race) was itself material, but the majority regards this as a mere “subjective” preference for a boss that is not protected by Title VII. It also finds no admissible evidence that the transfer would improve his career advancement.

Judge Henderson, the author of the majority opinion, submits a short concurrence to address a disquieting hypothetical posed by plaintiff’s counsel:

“would the court affirm dismissal of a suit challenging an employer’s affixing a ‘whites-only’ sign to a water cooler because ‘not a penny is lost by any worker . . . no one lost supervisory duties . . . [and it is] not in any way related to the actual workplace.'”

Judge Henderson writes that this would present a possible hostile work environment claim, but otherwise “has no relevance” to a straight race discrimination claim.

Judge Kavanaugh, concurring, notes his “skepticism” about the lateral-transfer line of cases, stating that “[i]n my view, a forced lateral transfer – or the denial of a requested lateral transfer – on the basis of race is actionable under Title VII.”

Finally, Judge Rogers in dissent would have reversed summary judgment. This supported on the record (she finds a genuine dispute whether the transfer would have “provide[d] the type of experience that would enable [plaintiff] to advance within the Inspector General’s Office”) and on procedural grounds (plaintiff was denied certain discovery).

Yet she also notes that the lateral-transfer case law simply could not literally mean what it says:

“[T]he court’s conclusion appears to indicate, much as Ortiz-Diaz’s counsel suggested during oral argument, that There can be no material adversity from transfer denials where a supervisor has a policy that, notwithstanding a concrete opportunity for professional advancement, no Hispanics need apply for the no-cost transfer program at the D.C. Office of the Department’s Inspector General’s Office …. Yet no court could condone that result.”

Collectively, this would appear to provide fodder to challenge the lateral-transfer rule frontally in a future case.

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