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Article | FINEX Observer

Where are we 50 years post-Stonewall?

Financial, Executive and Professional Risks (FINEX)
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By Talene M. Carter and Alison Miller | November 1, 2019

This year is the 50th anniversary of the Stonewall Uprising and the gay rights movement but discrimination against LGBT+ individuals in the workplace still exists.

This year marks the 50th anniversary of the Stonewall Uprising and the start of the gay rights movement. A lot of progress has been made since then — same-sex marriages have been legalized by the U.S. Supreme Court, the LGBT+ community's voice is being heard, and many states and cities have enacted legislation that specifically prohibits discrimination based on sexual orientation and gender identity.

Despite this progress, discrimination against LGBT+ individuals in the workplace is still prevalent. Twenty percent of LGBT+ individuals have experienced discrimination based on sexual orientation or gender identity when applying for jobs;i 22% have not been paid equally or promoted at the same rate as their peers.ii In 2015, 27% of the transgender population said they were not hired, were fired or were not promoted due to their gender identity or expression;iii and 80% of the transgender population who were employed experienced harassment or mistreatment on the job or took steps to avoid it.iv

Part of the reason for the above may be that the question remains as to whether federal law, Title VII, covers discrimination based on sexual orientation and gender identity. Title VII prohibits hiring or employment discrimination on the basis of an employee's race, color, religion, sex or national origin. The question is: What does "sex discrimination" entail? Specifically, does it include discrimination based on sexual orientation and/or gender identity? The U.S. Supreme Court set the stage for this discussion over 20 years ago in Price Waterhouse and Oncale, but there is still a lack of clarity among the courts, leaving the issue unresolved.

There may soon be less uncertainty as to whether Title VII prohibits sexual orientation discrimination and gender identity discrimination. Lower courts are split on this important issue, which has resulted in contradictory decisions across our country's legal landscape.

Division between courts

In February 2019, the U.S. Circuit Court of Appeals for the Fifth Circuit ruled that discrimination on the basis of sexual orientation it not prohibited by Title VII (Wittmer v. Phillips 66 Company). The Eleventh Circuit had already taken the same position in its 2017 ruling in Evans v. Georgia Regional Hospital.

In contrast, two circuits which have ruled that Title VII prohibits employers from discriminating based on sexual orientation are the Second and Seventh Circuits (Zarda v. Altitude Express and Hively v. Ivy Tech Community College). Likewise, in 2018, the Sixth Circuit held that Title VII protects employees from discrimination on the basis of transgender status (R.G. and G.R Harris Funeral Homes v. EEOC).

Contrasting positions of executive agencies

Adding to the legal divide are the differing positions of the executive agencies. The EEOC's view of the law is that Title VII does apply to sexual orientation and gender identity. In fact, LGBT+-based sex discrimination charges have steadily increased since January 2013 (when the EEOC first started tracking this data). Further, the EEOC has obtained approximately $6.4 million in monetary relief for the claimants, as well as numerous employer policy changes. The Justice Department on the other hand outlined its position in an October 2017 letter from then Attorney General Jeff Sessions stating that Title VII does not prohibit discrimination based on gender identity and transgender status. Further, the Department of Justice filed a brief in the R.G. and G.R. Harris Funeral Homes v. EEOC case arguing that Title VII does not prohibit sexual orientation and gender identity discrimination.

Given this divide, the Supreme Court granted certiorari and will hear arguments on three cases next term: Bostock v. Clayton, Altitude v. Zarda and R.G. and G.R Harris Funeral Homes v. EEOC. The consolidated cases of Bostock v. Clayton and Altitude v. Zarda concern sexual discrimination on the basis of sexual orientation, and involve a child welfare services coordinator and skydiving instructor, respectively, who argued that they were fired due to their sexual orientation. The third case, R.G. and G.R Harris Funeral Homes v. EEOC, involves gender identity where a funeral director alleged she was fired for being transgender.

The Supreme Court is now poised to resolve this issue which has divided the courts and executive agencies when the next term begins in October 2019. However, there is no real consensus as to how they will rule. One of the possible outcomes is that the Supreme Court defers to Congress. To that end, on May 17, the House of Representatives passed the "Equality Act of 2019" which would prohibit discrimination based on sexual orientation and gender identity in employment, housing, public accommodations, education, federally funded programs, credit and jury service. While it has not passed the Senate yet, it is backed by many large organizations.

State-specific legislation

Despite the lack of clarity at the federal level, many states and cities have taken matters into their own hands and passed state-specific legislation addressing this issue. For example, 20 states and the District of Columbia prohibit discrimination based on sexual orientation and gender identity; six states prohibit discrimination against public employees based on sexual orientation and gender identity; and five states prohibit discrimination against public employees based on sexual orientation only.

Embedding a culture of inclusion and diversity throughout organizations

In addition to the legal developments, many organizations are moving beyond diversity-oriented recruiting strategies to embedding inclusion and diversity throughout the entire employee experience and further, establishing healthy company cultures where all employees feel a sense of safety, self-worth, opportunity, acceptance, and can bring their authentic selves to work. The outcome of implementing a healthy company culture is increased productivity, increased brand recognition, risk mitigation (i.e., fewer employment-related claims) and increased talent retention and acquisition.

To attain or maintain an inclusive, healthy culture, below are some best practices that can be implemented:

  • Leadership is in the best position to shape the culture of an organization - ensure that leadership support of inclusion and diversity initiatives is clearly articulated to the entire organization and visible.
  • Ensure that your harassment and discrimination policies and trainings include sexual orientation and gender identity as prohibited forms of discrimination and harassment and remove gendered language from such policies.
  • Ensure that management is trained properly on how to treat all employees in a non-discriminatory manner.
  • Include options beyond male and female on employee surveys and documents and provide opportunities for employees to voluntarily list pronouns on email signatures and name tags.
  • Ensure that all policies, benefits, job offers and promotions apply equally to all employees and applicants.
  • Work with industry experts to review appropriate risk transfer strategies and ensure your employment practices liability insurance policy provides coverage for sexual orientation, gender identity and gender expression discrimination claims.
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FINEX Observer: Fall 2019 Edition PDF 6.7 MB
Authors

Talene M. Carter
Employment Practices Liability Thought & Product Leader


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