The US Supreme Court’s recent decision recognizing a constitutionally protected right for same-sex couples to marry, Obergefell et al. v. Hodges, was an important step forward for lesbian, gay, bisexual, and transgender (LGBT) rights, but it did not address other types of potential discrimination against LGBT individuals. Specifically, in the absence of a federal law that expressly protects employees from discrimination based on sexual orientation, and in the absence in many places in the United States of any similar state laws or municipal ordinances, employees who marry their same-sex partners arguably can still be subjected to workplace discrimination without remedy, thus burdening their newly protected right to marry. A proposed federal law that would bar sexual orientation discrimination in the workplace, the Employee Non-Discrimination Act (ENDA), is languishing in Congress, and its passage is uncertain.

As many expected it would, the Obama administration has stepped into this regulatory vacuum. On July 15, in Complainant v. Anthony Foxx, Secretary, Department of Transportation (Federal Aviation Administration), the Equal Employment Opportunity Commission (EEOC) reversed a prior decision based on timeliness, and determined that an air traffic controller’s allegations of discrimination based on sexual orientation against his employer, the Federal Aviation Administration, stated a valid claim of discrimination based on sex under Title VII of the Civil Rights Act of 1964, as amended. This decision builds on a prior decision from 2012 in which the EEOC determined that transgender employees were protected from discrimination under Title VII. In Foxx, the EEOC analyzed Title VII and relevant case law and concluded that discrimination against an employee based on the gender of his or her spouse or partner is discrimination based on sex, which is prohibited by Title VII: “[W]e conclude 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. A complainant alleging that an agency took his or her sexual orientation into account in an employment action necessarily alleges that the agency took his or her sex into account.”

The EEOC’s decision gives it broad authority to investigate, conciliate, and litigate on behalf of LGBT individuals. This will change the landscape of employment law throughout the United States but will have a particularly significant effect on employers outside the 21 states and the District of Columbia that already prohibit employment discrimination on the basis of sexual orientation. We expect the EEOC to take an insistent approach to its new authority. Indeed, it forecasted its focus on this population, listing protection of LGBT employees as one of its target priorities for 2013–2016.

The EEOC’s position will likely be subject to challenge in the courts, and many will very likely argue that the EEOC is overstepping its authority by attempting to bootstrap protection for sexual orientation into Title VII. In addition, religiously affiliated employers may argue that prohibiting them from discriminating based on sexual orientation abridges their right to free exercise of their religious beliefs under the First Amendment, as well as under the federal Religious Freedom Restoration Act (and similar state laws). Nevertheless, employers that treat employees differently based on sexual orientation will now almost certainly face challenges under Title VII.

The EEOC’s enforcement position will have a potential effect on employee benefit plan design. Because Title VII is not preempted by ERISA, self-insured health and welfare plans that do not provide the same coverage for employees’ same-sex spouses as they do for opposite-sex spouses will likely be subject to challenge. In fact, one such class-action challenge has already been filed against Wal-Mart (Jacqueline A. Cote v. Wal-Mart Stores Inc.).

We will publish a LawFlash in the near future with a more detailed discussion of the EEOC decision and its implications from both an employment and a benefits standpoint. For now, we recommend that employers carefully consider taking the step of including sexual orientation in their antidiscrimination policies. Likewise, employers across the country should now include sexual orientation in their antiharassment training programs and adopt appropriate prohibitions on LGBT slurs, similar to those applied to other protected classes.