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Second Circuit En Banc Panel "Turns the Tide" to Hold that Title VII Recognizes Sexual Orientation Discrimination

In a groundbreaking en banc decision, the Second Circuit became the second appellate court to hold that Title VII recognizes sexual orientation discrimination claims as impermissible sex discrimination per se. Zarda v. Altitude Express, Inc. also expressly overturned the Circuit's prior holdings in Simonton v. Runyon and Dawson v. Bumble & Bumble, deepening a circuit split over the question.

Plaintiff Daniel Zarda was an instructor for a Long Island skydiving company in which he often carried out tandem skydives requiring close physical proximity to clients. Mr. Zarda voluntarily disclosed his sexual orientation to female clients to reassure them, in one instance disclosing to one that he was gay and "ha[d] an ex-husband to prove it." However, that customer complained about Mr. Zarda to the company, which fired him soon thereafter. Mr. Zarda's colleagues had also routinely referred to his sexual orientation and made sexual jokes about him to clients.

On these facts, the Second Circuit decisively embraced the EEOC's landmark decision, Baldwin v. Foxx, EEOC Dec. No. 0120133080 (July 15, 2015), in which the Commission held that "sexual orientation is inherently a sex-based consideration."

The en banc majority explained that discrimination targeting an employee's sexual orientation is "because of sex," and that it constitutes "associational discrimination." Its analysis builds upon Supreme Court rulings, including L.A. Department of Water & Power v. Manhart, 435 U.S. 702 (1979), in which it held that "traits that operate as a proxy for sex are an impermissible basis for disparate treatment of men and women," and in Price Waterhouse v. Hopkins, 490 U.S. 228 (1989), in which it held that Title VII prohibited sex stereotyping.

Sexual orientation necessarily implicates Title VII's prohibition against discrimination "because of sex," the Court held, because to identify one's sexual orientation, "we need to know the sex of the person and that of the people whom he or she is attracted." Therefore, "sexual orientation is a function of sex."

The Second Circuit had also recognized associational discrimination in the context of unlawful discrimination based upon an employee's interracial marriage in Holcomb v. Iona College, 521 F.3d 130 (2d Cir. 2008), as do five other circuits. The Court reasoned that Title VII reaches "reasonably comparable evils" and is not constrained to the "principal concerns of our legislators," Oncale v. Sundower Offshore Servs., Inc., 523 U.S. 75, 79 (1998), to recognize that an employee can "suffer[] associational discrimination based on his own sex."

The decision comes on the heels of the Seventh Circuit's en banc decision last year, which largely relied on high court precedent to reach the same conclusion in Hively v. Ivy Tech Community College of Indiana. 853 F.3d 339 (2017), and the First Circuit's recent decision to uphold a verdict awarding damages to a plaintiff who asserted the distinct claim of sexual orientation as a "plus factor" to a Title VII sex discrimination claim in Franchina v. City of Providence, No. 16-2401 (1st Cir. Jan. 24, 2018). A month prior to the Hively en banc decision, however, the Eleventh Circuit declined to recognize the claim. Evans v. Ga. Reg'l Hosp., 850 F.3d 1248 (11th Cir.), cert. denied, 138 S. Ct. 557 (2017). Franchina noted that decisions like Hively - and now Zarda - signal that "the tide may be turning."

In the lead dissent, Judge Lynch expressed that despite his personal views on the question, only Congressional action could define the scope of Title VII to reach claims of sexual orientation discrimination.

The Zarda en banc decision advances civil rights by setting a clear, consistent rule for employers to abide by in the workplace: that "sexual orientation discrimination is a subset of sex discrimination." Now, employees can directly allege sexual-orientation discrimination rather than engaging in linguistic "bean-counting" of evidence under the leading theories of sex discrimination per se and sex stereotyping, among others. But until the Supreme Court finally rules on the issue, civil rights litigants would be best served by arguing the alternative, overlapping theories laid out in Zarda as a precautionary measure.

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