[co-author: Sarah Riskin]

In what could be labeled a landmark decision, a federal circuit court extended Price Waterhouse v. Hopkins to hold that, as a matter of law in every case, a claim of sexual orientation discrimination is a claim of sex discrimination under Title VII.

Since the Supreme Court’s 1989 Price Waterhouse decision, courts have recognized that Title VII’s prohibition on sex discrimination extends to claims of “sex stereotyping,” meaning that discrimination because an individual fails to conform to generally-accepted (and expected) gender norms is a form of sex discrimination. In Price Waterhouse‘s wake, plaintiffs have sought an extension of the holding to sexual orientation discrimination claims, but courts have declined the invitation, generally relying on the theory that Congress meant “sex” when it enacted Title VII, and sex is categorically different than sexual orientation. This position has been reaffirmed twice in the past month alone:

• On March 10, 2017, a three-judge panel from the Eleventh Circuit held in Evans v. Georgia Regional Hospital that sexual orientation discrimination is not covered by Title VII (though it gave the plaintiff leave to amend so she could state a Price Waterhouse-style “gender nonconformity” claim).
• On March 27, 2017, a panel from the Second Circuit likewise ruled that Title VII does not protect individuals from discrimination on the basis of sexual orientation. Again, the Second Circuit pointed to Price Waterhouse‘s sex stereotyping theory as a means for redress.

Then, on April 4, 2017, the Seventh Circuit became the first federal appeals court to rule that Title VII protects against sexual orientation discrimination, not only under Price Waterhouse but by analogizing sexual orientation discrimination claims to the race discrimination claim in Loving v. Virginia, as well.  In Hively v. Ivy Tech Community College of Indiana, the full court ruled 8-3 following rehearing en banc. The decision effectively nullified decades-old case law in the circuit and could open the door to plaintiffs who have otherwise tried—and largely failed—to assert sexual orientation discrimination claims under Title VII. (To be clear, LGBT plaintiffs have not been entirely without recourse; when artfully pled, some have sufficiently stated claims for sex stereotyping, and many state anti-discrimination laws prohibit sexual orientation outright.)

Hively’s reach will become clear in the near future. Only five days before the Seventh Circuit’s decision, the plaintiff in Evans asked the Eleventh Circuit to rehear her case en banc. The Eleventh Circuit may therefore be one to watch, though perhaps the more influential decision will come from the Supreme Court itself, since Hively has now created a circuit split.

We will continue to monitor these cases and advise employers on how they should address this ruling in the workplace.