On April 4, 2017, the U.S. Court of Appeals for the Seventh Circuit became the first federal appellate court to hold that Title VII’s prohibition on sex discrimination also covers discrimination on the basis of sexual orientation. With its en banc decision in Hively v. Ivy Tech Community College, the court split from its sister circuits, perhaps setting the stage for the U.S. Supreme Court to resolve the issue. The decision also introduced another element to the current patchwork of conflicting local, state, and federal employment laws facing employers seeking to establish policies relating to discrimination.

The allegations in the case are straightforward. Kimberly Hively began teaching as a part-time, adjunct professor at Ivy Tech Community College in South Bend, Indiana, in 2000. Between 2009 and 2014, she applied for and was rejected from six full-time teaching positions. In July 2014, her part-time contract was not renewed. 

Hively, who was openly lesbian, believed that the college’s actions toward her were based on her sexual orientation. She filed a charge of discrimination with the Equal Employment Opportunity Commission and later a lawsuit against the college in federal court. Hively’s complaint against the college was dismissed by the district court, which followed existing case law. Last year, after Hively appealed, a Seventh Circuit panel affirmed the dismissal 2-1. The entire Seventh Circuit subsequently decided to hear the case to determine whether the court should recognize sexual orientation discrimination as a form of “sex discrimination” under Title VII. By a vote of 8-3, it did, becoming the first federal appellate court to do so.

The Seventh Circuit’s decision was based on two broad arguments. The court first found that sexual orientation discrimination is a natural extension of a gender nonconformity claim, which the Supreme Court recognized as a form of impermissible sex discrimination in its 1989 decision in Price Waterhouse v. Hopkins. The majority reasoned that discriminating against men or women for their sexual orientation is “difficult to extricate” from the already impermissible discrimination of gender stereotyping. Second, the court found that sexual orientation discrimination is a form of associational discrimination, similar to discriminating against someone based on the race of the person or persons with whom they associate. 

The court acknowledged that sexual orientation discrimination was likely not in the minds of the drafters of Title VII. But after examining the continuing expansion of Title VII protections and the evolving body of Supreme Court case law on sexual orientation, the majority declared “the fact that the enacting Congress may not have anticipated a particular application of the law cannot stand in the way of the provisions of the law that are on the books.” In other words, while Congress may not have thought “sex discrimination” included sexual orientation discrimination when Title VII was enacted, that is what “sex discrimination” means now, and the law must reflect the current understanding.

For many employers with employees in the Seventh Circuit (which covers Illinois, Indiana, and Wisconsin), the Hively decision may prove to be largely business as usual. Illinois and Wisconsin state law already prohibit sexual orientation discrimination in employment, and employers operating in those states should already have policies in place addressing sexual orientation discrimination. Employers operating in Indiana, which does not include sexual orientation in its fair employment law, should update their policies and practices accordingly.

Other changes from Hively will take time to develop. Federal law provides for different damages than does state law. For example, the Wisconsin Fair Employment Act does not allow the recovery of compensatory and punitive damages, while federal law does. An uptick in federal litigation of sexual orientation discrimination also can be expected. And as with all new developments in the law, the coming years will see the contours of the legal protections — and the corresponding policies and practices employers should adopt — defined by litigation.

For now, employers should take this as an opportunity to review their current policies and practices to ensure compliance with Hively. Employers with questions on their compliance should consult with experienced legal counsel.