Last year, the Equal Employment Opportunity Commission (EEOC) filed its first two cases in federal court charging employers with failing to protect employees from discrimination and harassment based on their homosexuality. The federal agency has already received more than a thousand complaints of this nature, but only recently has the agency taken employers to court. Other cases have been settled, or simply not pursued.

Although the EEOC’s position can be overruled by federal courts, several trial courts have accepted the proposition that “sexual orientation discrimination is, by its very nature, discrimination because of sex.”

And recently, the U.S. Court of Appeals for the Seventh Circuit (which covers Wisconsin, Illinois and Indiana) upheld that view. It did so in an 8 to 3 “en banc” ruling — all of the court’s judges weighed in — after a smaller three-judge panel had taken the opposite point of view.

Whether or not discrimination had occurred wasn’t in question, but merely whether it was illegal.

Key Ruling

In the en banc decision, the court noted that while the U.S. Supreme Court has not yet explicitly ruled on this question, it has “over the years issued several opinions that are relevant to the issue,” including its 2015 decision to prevent states from banning gay marriage. The Supreme Court has also upheld rulings prohibiting discrimination against people on the basis of their failure to conform to gender stereotypes.

“It creates a paradoxical legal landscape in which a person can be married on Saturday and then fired on Monday for just that act,” the appeals court observed.

The Seventh Circuit case involved a part-time professor at a community college who had been with the school for 14 years in that capacity, and never had a negative review. Although she was qualified for several full-time positions that were open, she was consistently turned down, without even being granted an interview. She attributed the college’s refusal to hire her for any of the full-time positions to discrimination based on her sexual orientation.

Note: An executive order signed by President Clinton in 1998 expanded the scope of an earlier anti-discrimination executive order. That order prohibited companies that work under federal contracts from employment discrimination based on sexual orientation. President Obama broadened it again in 2014 to include gender identity.

Two Federal Court Cases

In 2016, when the EEOC announced its first two sexual orientation discrimination federal court cases, it described them as follows:

In one, the supervisor of a gay male employee “repeatedly referred to him using various anti-gay epithets and made other highly offensive comments.” When the employee complained to a more senior manager, he was told that the supervisor “was just doing his job” and failed to take any steps to stop the harassment. The employee resigned. The employer filed a motion to dismiss the EEOC case but the U.S. District Court denied it and agreed with the EEOC that sexual orientation discrimination is a type of sex discrimination.

In the other case, involving similar harassment of a gay female employee, the employee was terminated in what the EEOC alleged was retaliation after she had complained about the harassment and called an employee hotline. That case was settled after the employer agreed to pay $202,200 and provide significant equitable relief.

EEOC Stance

Even before President Obama signed the executive order which banned gender identity discrimination by federal contractors, the EEOC was pursuing such cases. For example, it supported the discrimination case of a transgender federal employee in 2012. On its website, the EEOC lists examples of discrimination allegations it has received that it considers unlawful.

Here are four involving gender identity:

• Failing to hire an applicant because she’s a transgender woman;
• Firing an employee because he’s planning or has made a gender transition;
• Denying an employee equal access to a common restroom corresponding to the employee’s gender identity; and
• Harassing an employee because of a gender transition. For example, by intentionally and persistently failing to use the name and gender pronoun that corresponds to the gender identity with which the employee identifies, and that the employee has communicated to management and employees.

For many employers, it might not even matter how the EEOC could respond to an employee’s allegation of gender identity or sexual orientation discrimination. That’s because about 22 states have their own sexual orientation anti-discrimination laws on the books.

Practical Pointers

Meanwhile, here are four employment practices to consider in light of the evolving legal landscape:

• • If you already conduct — or plan to conduct — anti-discrimination and anti-harassment training, don’t neglect to include sexual orientation and gender identity as examples of discrimination or harassment categories.

• • Be aware that the Occupational Safety and Health Administration (OSHA) has published a “Guide to Restroom Access for Transgender Workers.” This guide states that “all employees, including transgender employees, should have access to restrooms that correspond to their gender identity.”

• • Be cautious about imposing gender-based dress codes that could impact transgender employees, especially when the nature of the job makes such a dress code essential. In a case like this, it’s generally a good idea to apply the dress code of the gender that a transgender employee is transitioning to, for that employee, even before the transition is complete.

• Along similar lines, use names and pronouns for transgender employees suitable for the gender they’re transitioning to.

Obviously these employment issues are complex and the legal sands are shifting. It’s prudent, therefore, to consult with a labor attorney with expertise in these issues when formulating policies or taking actions involving lesbian, gay, bisexual and transgender employees and job applicants.