On April 4, 2017, the 7th Circuit in Hively v. Ivy Tech Community College issued a landmark opinion extending the protections of Title VII of the Civil Rights Act of 1964 (“Title VII”) to individuals who are discriminated against on the basis of their sexual orientation.

The Hively decision is a significant milestone in a journey that began in 1989 with the United States Supreme Court (“Supreme Court”) decision in Hopkins v. Price Waterhouse, which recognized sex stereotyping as a form of prohibited gender discrimination. As other federal appellate courts have ruled differently on this same issue, the precedent set in Hively makes Supreme Court review more likely. For now, all employers in Illinois, Indiana and Wisconsin (the states within the 7th Circuit's jurisdiction) should take note that federal law prohibits sexual orientation discrimination. In other jurisdictions, the issue may or may not be resolved at this point.

The Facts of Hively

The Hively case was brought by plaintiff Kimberly Hively, a part-time, adjunct professor at Ivy Tech Community College (“College”) in Indiana. Ms. Hively is openly homosexual. During her employment, she applied for at least six full-time positions at the College. She had never received a negative evaluation and had the degree and grades required for the full-time positions. Each of her six applications was unsuccessful, and after 14 years at the College, her part-time contract was not renewed. Believing the College’s decisions were made because she is lesbian, Ms. Hively brought a Title VII action against the College in the United States District Court for the Northern District of Indiana, alleging that she was denied full-time employment and promotions based on her sexual orientation. The College successfully moved to dismiss the action on the basis that Title VII does not prohibit sexual orientation discrimination but rather only gender discrimination.

The 7th Circuit’s Holding

Initially, the 7th Circuit agreed with the District Court, finding the current state of the law did not recognize sexual orientation as a protected class. But, in reaching their initial decision, the court reviewed Hopkins and its progeny, explaining that “sex stereotype” discrimination was a common vehicle for individuals seeking redress for sexual orientation discrimination.

The 7th Circuit’s initial Hively decision commented on the “odd state of affairs in the law” that Title VII protects gay, lesbian and bisexual employees only to the extent that those employees meet stereotypical norms, while those same employees who otherwise conform to gender stereotyped norms “mostly lose their claims for sex discrimination under Title VII.” Additionally, the 7th Circuit explained how the Supreme Court has been “inform[ing] the legal landscape” by expounding upon the rights of lesbian, gay and bisexual persons in a constitutional context. Having established a roadmap for Ms. Hively, the 7th Circuit agreed to rehear her case en banc, i.e., in front of its entire judiciary panel. By doing so, the 7th Circuit was able to overrule prior precedent and bring the law into conformity with “the Supreme Court’s teachings.”

Reversing the lower court, the 7th Circuit recognized Ms. Hively’s allegations were “paradigmatic sex discrimination.” She alleged if she was a man married to a woman (or dating or living with a woman) and everything else was the same, the College would have acted differently. In other words, Ms. Hively’s sexual orientation did not allow her to conform to the gender-based stereotype that she should be attracted to members of the male sex. This, according to the 7th Circuit, is precisely what Congress meant when it prohibited the College from discriminating against Ms. Hively because she is a woman. Under this lens, the 7th Circuit concluded, “a person who alleges that she experienced employment on the basis of her sexual orientation has put forth a case of sex discrimination for Title VII purposes.”

Takeaway for Employers

The Hively decision is now binding law in Wisconsin, Illinois and Indiana. This decision allows employees in these states to bring sexual orientation discrimination claims based on federal law, in addition to state remedies.

Hively does not pose a fundamental change for employers in Wisconsin and Illinois, who already have to comply with state law prohibiting sexual orientation discrimination. For example, the Illinois Human Rights Act prohibits discrimination based on “actual or perceived heterosexuality, homosexuality, bisexuality, or gender-related identity, whether or not traditionally associated with the person's designated sex at birth.” The 7th Circuit’s reasoning in Hively could similarly be read to cover not only discrimination against homosexuals but also those with non-conforming gender identities.

The biggest change may be for employers in Indiana, as the Indiana Civil Rights Law (unlike the state laws of Illinois and Wisconsin) does not presently prohibit discrimination on the basis of sexual orientation. Many Indiana municipalities already prohibit sexual orientation discrimination.

Employers should follow best practices to ensure their workplaces respect equality and prohibit discrimination based on an employee’s sexual orientation or gender identity. Training is also recommended concerning LGBT issues. Taft attorneys are available to consult with employers as to best practices for the workplace and the status of discrimination laws across the country.

This law update was authored by Taft attorneys Rachel Schaller and Dan Saeedi, with contributions from Taft’s Zachary Clark.