On November 30, 2016, all of the judges of the Seventh Circuit Court of Appeals (covering Illinois, Indiana, and Wisconsin) reheard a case that could change the way federal courts treat sexual orientation-based discrimination claims. As is typical for the federal appeals courts, the case (Hivey v. Ivy Tech Community College) had already been decided by a three judge panel. However, in a relatively unusual step, the court has now vacated that opinion, and the matter will be determined by all 12 of the current judges.

Federal appeals courts throughout the country have consistently ruled that Title VII’s protections against sex discrimination do not extend to claims of discrimination based on one’s sexual orientation. However, courts have ruled that an employee who is disciplined or harassed for not abiding by the employer’s concept of gender norms (such as a woman who is seen as acting “mannish” or refuses to wear makeup) may have a sex discrimination claim under Title VII. Those types of claims have successfully been brought by transgender and, in some cases, gay or lesbian employees.

The Hivey case involves a college instructor’s claim that she was denied promotions and ultimately terminated because she is a lesbian. In the original Seventh Circuit decision, the three-judge panel ruled against the instructor and found that Title VII does not apply to claims that a plaintiff was discriminated against on the basis of her sexual orientation. The three-judge panel could have simply cited prior precedent from its own cases, as well as other courts of appeal in coming to its decision. Instead however, the panel released a 42-page opinion (link:) that discussed the difficulty of drawing lines between cases based on what the court called “sex stereotyping” or not living up to gender norms, and those based on sexual orientation. For example, if a gay man is harassed at work because others see him as effeminate, is that discrimination based on sex stereotyping or based on his sexual orientation? The three-judge panel noted that courts often have a difficult time drawing the line in such cases.

The original Hivey opinion also discusses a 2015 Equal Employment Opportunity Commission (EEOC) decision, which found that Title VII protection extends to claims of sexual orientation discrimination. In that decision, which only applies to federal government employees, the EEOC found that sexual orientation discrimination is sex discrimination because employers could discriminate against gay, lesbian, or transgender employees based on who they date or marry (that is, a man would not be disciplined for marrying a woman, but another woman may be). The EEOC also determined that sexual orientation discrimination was a form sex stereotyping discrimination as well. Though the three-judge panel did not adopt the findings of the EEOC, it did note that other courts were adopting the EEOC’s rationale.

After the original Hivey opinion was issued, the instructor filed a motion, requesting that the case be heard again by all of the judges in the Seventh Circuit. Though this is somewhat unusual, the court granted the motion for rehearing. The full panel of the Seventh Circuit may simply agree with the three-judge panel and find that, in keeping with its own prior rulings, Title VII does not cover claims of sexual orientation discrimination. If, however, the Seventh Circuit determines that such claims are covered by Title VII, it would be a significant shift in the employment law landscape. It would also be the first Court of Appeals to rule that such claims are covered, and would likely prompt additional appellate litigation and, ultimately, a Supreme Court decision, if there is a split among the Courts of Appeal throughout the country.