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In late February 2018, the Second Circuit, sitting en banc (full panel), became the second federal appellate court (joining the Seventh Circuit) to recognize sexual orientation as a protected class under Title VII. Zarda v. Altitude Express, Inc., 883 F.3d 100 (2nd Cir. 2018). We suspect more circuit courts will follow and the issue will likely be decided by the Supreme Court.

In 2010, Donald Zarda, a gay man, worked as a sky diving instructor for Altitude Express, Inc. Zarda’s co-workers routinely referenced his sexual orientation and made sexual jokes about clients. Given the close proximity of instructors and clients during a sky dive (they are strapped together), Zarda would disclose his sexual orientation to some female clients to assuage any concerns they might have about being strapped to an unfamiliar man. One female client claimed that Zarda inappropriately touched her and disclosed his sexual orientation to excuse his behavior. The client reported the incident to Zarda’s boss, who fired Zarda. Zarda denied inappropriately touching the woman and claimed he was fired solely because he disclosed his sexual orientation. A month later, Zarda filed a sex discrimination claim with the EEOC claiming he was discriminated against based on his sexual orientation and his gender, and later filed suit in federal district court claiming sexual orientation discrimination and gender discrimination.

Based on (then) existing case law, the sexual orientation claim was dismissed. The gender discrimination claim went to trial, and Zarda lost. Zarda appealed to the Second Circuit where the initial panel upheld the dismissal of the sexual orientation claim and “declined Zarda’s invitation to revisit our precedent” regarding sexual orientation, which “can only be overturned by the entire Court sitting en banc.” That is exactly what happened: Zarda petitioned for rehearing en banc, and the entire Second Circuit, in a 4-3 split decision, over-turned existing precedent, holding that Zarda’s sexual orientation claim was recognized as a subset of sex discrimination:

We now conclude that sexual orientation discrimination is motivated, at least in part, by sex and is thus a subset of sex discrimination. Looking first to the text of Title VII, the most natural reading of the statute’s prohibition on discrimination “because of…sex” is that it extends to sexual orientation discrimination because sex is necessarily a factor in sexual orientation. This statutory reading is reinforced by considering the question from the perspective of sex stereotyping because sexual orientation discrimination is predicated on assumptions about how persons of a certain sex can or should be, which is an impermissible basis for adverse employment actions. In addition, looking at the question from the perspective of associational discrimination, sexual orientation discrimination – which is motivated by an employer’s opposition to romantic association between particular sexes – is discrimination based on the employee’s own sex.

Zarda, 883 F.3d at 112-13.

What does this mean for employers? With the EEOC and two Federal Circuits recognizing sexual orientation as a protected class, it is likely that employers will continue to see sexual orientation discrimination claims – even in circuits that continue to reject sexual orientation as a protected class (we have seen this in the Tenth Circuit). Employers should have a frank conversation with their management team, HR members, and lawyers to determine how this trend to broaden the scope of Title VII should affect their company’s policies and procedures. At a minimum, this is something all employers should be keeping an eye on because the issue is likely headed to the Supreme Court.