In a landmark decision, the 2^nd Circuit Court of Appeals in Zarda v. Altitude Express, Inc., en banc, became the second federal appellate court to hold that Title VII of the Civil Rights Act of 1964 (42 U.S.C. § 2000e-2(a)), which makes it unlawful for employers to discriminate on the basis of sex, also prohibits discrimination on the basis of a person’s sexual orientation. It appears that the defendant does not intend to seek Supreme Court review. Therefore, employers subject to Title VII, particularly those in the Second Circuit (i.e., Connecticut, New York and Vermont), should know about this opinion and consider how and whether it may apply to them.

Last week’s decision came too late for plaintiff Donald Zarda, who died in a sky-diving accident in 2014. Mr. Zarda had filed suit in 2010 against his employer, Altitude Express, alleging that he was fired from his job as a sky-diving instructor because of his sexual orientation. The lower court dismissed Mr. Zarda’s Title VII claim but allowed him to try a state-law claim for sexual orientation discrimination that required a higher burden of proof. After losing on that claim at trial, Mr. Zarda (and subsequently his estate) appealed the dismissal of his Title VII claim. A three-member panel of the 2^nd Circuit applied existing law and affirmed dismissal of the claim. But the Second Circuit took the rare step of agreeing to hear the case en banc, and all 13 judges heard oral argument last fall. On Feb. 26, 2018, ten of those judges held that Title VII prohibits employers from discriminating on the basis of sexual orientation, and voted to overturn their prior cases to the contrary. Eight judges wrote separate opinions.

Writing for the plurality, Chief Judge Katzmann observed that for many years, the U.S. Equal Employment Opportunity Commission (EEOC) and federal appellate courts had agreed that Title VII’s prohibition of discrimination “because of … sex” did not protect employees from discrimination based on their sexual orientation. But, he noted, the EEOC reversed its position in 2015 in its Baldwin v. Foxx decision and the 7^th Circuit reversed its position in 2017 in its en banc decision in Hively v. Ivy Tech Cmty. College of Ind. (holding that Title VII bars sexual orientation discrimination). Because these new decisions raised arguments not previously considered by the Second Circuit, the judges agreed to revisit the issue of whether Title VII bars sexual orientation discrimination.

Chief Judge Katzman described three reasons for concluding that Title VII supports claims for sexual orientation discrimination despite longstanding precedent to the contrary. First, Title VII is violated whenever sex is a motivating factor for an employment practice (42 U.S.C. § 2000e-2(m)) – sex need not be the only motivating factor – and “sexual orientation discrimination is motivated, at least in part, by [the employee’s] sex.” Second, the U.S. Supreme Court in Price Waterhouse v. Hopkins held that Title VII bars gender stereotyping, and discrimination based on sexual orientation violates the gender stereotype that men and women should be heterosexual. Third, Title VII bars discrimination based upon an employee’s decision to associate with someone of a particular race and the same rationale applies when an employer discriminates based on an employee’s decision to associate with someone of a particular sex.

Following the Hively and Zarda decisions, more employees in the LGBT community are likely to pursue claims seeking protection under Title VII – not only in the 2^nd and 7^th Circuits, but elsewhere in an effort to expand this federal trend. Courts across the country may reach different conclusions about the viability of these claims until (and if) the issue reaches the Supreme Court, but many states and municipalities already include sexual orientation as a protected class in their discrimination laws. For now, therefore, employers should be aware of these decisions and, at least in the 2^nd and 7^th Circuits, should modify their workforce training initiatives to include a focus on sexual orientation and related issues. Those employers will also want to instruct their HR staff and operations supervisors and managers regarding the potential legal implications of treating employees differently based on their sexual orientation.