Monday, the Supreme Court in the case of Bostock v Clayton County Georgia put a spotlight on the rainbow that symbolizes the LGBTQ community by ruling that Title VII of the Civil Rights Act covers sexual orientation and gender identity. This puts an end to a deep split amongst the Federal Courts regarding the issue and establishes as Federal Law that employers cannot fire an individual merely for being gay or transgender. Writing for a 6-3 majority, Justice Neil Gorsuch noted that the ruling is based on the plain language of Title VII, which prohibits discrimination on the basis of sex. Because sex is a component of a worker’s gender identity or sexual orientation, an employer that fires a worker on one of these bases “necessarily intentionally discriminate[s] against that individual in part because of sex.”

Broader Impact of Protections for LGBTQ Workers

While the Bostock case dealt specifically with the termination of employment, it will have a much broader impact when the protections are applied to the full scope of employment-related decisions.  Title VII applies to employers in both the private and public sectors that have 15 or more employees. Under Title VII, employers may not discriminate with regard to any term, condition, or privilege of employment. Areas that may give rise to violations include recruiting, hiring, promoting, transferring, training, disciplining, discharging, assigning work, measuring performance, or providing benefits.

The Difference between Friday Night and Monday Morning.

Monday’s ruling throws into question the Federal Department of Health and Human Services’ new rule adopted on June 12th rolling back the Affordable Care Act’s anti-discrimination regulations that specifically applied to health care services for trans people. The roll back is based on the view that “sex discrimination” only applies when someone faces discrimination for being female or male, and does not protect people from discrimination on the basis of sexual orientation or gender identity. Based on the HHS rule adopted on Friday which is scheduled to go into effect in August, many more health plans would be able to discriminate against someone on the basis of gender identity. While the Bostock case is specific to employment, the reasoning applied by the Court raises serious doubt as to the validity of the new regulations. Thus, it is unlikely there will be a rush to amend health care plans to implement the changes contemplated by the new rules.

Impact on Michigan Employers

Michigan is within the Sixth Circuit of the Federal Courts. The Sixth Circuit had already ruled that Title VII protected sexual orientation and so the law applicable to covered Michigan employers has not changed as a result of the ruling in Bostock. However, the ruling may well inject more energy into current efforts to amend Michigan’s Elliot-Larson Civil Rights Act which does not specifically provide protection based on sexual orientation thus giving shelter to small employers not covered under federal law. The Michigan Department of Civil Rights announced in May of 2018 that it was going to apply the Act as if it did provide such protections. Groups that were concerned that the Department’s position would be subject to legal challenge or would be abandoned upon a change in Department leadership have initiated a petition drive to amend the Act to specifically ban discrimination based on sexual orientation. There is also pending legislation in the Michigan House (HB 4688) and Senate (SB 351) to add sexual orientation as a protected category under Michigan Law. In 2019 Governor Whitmer issued an Executive Order prohibiting discrimination based on sexual orientation and gender identity in all areas of state government employment.

A COVID-19 Reminder

Employers who are calling back their employees from a COVID-19 related furlough need to keep in mind that the call backs must be free of discrimination under both state and federal law. With the Bostock ruling removing all uncertainty regarding job protections for the LGBTQ community under Federal Law employers should be particularly attentive to the fact that there remains no category of employee that can be treated differently in the call back process. Small private employers that want to bank on the fact that there is no specific Michigan law that currently prohibits employment-related discrimination based on sexual orientation do so at a pretty significant risk that their conduct will ultimately be found to be unlawful.

While most businesses are consumed with the impact of the pandemic on their operations, the Bostock opinion affirms the necessity of keeping track of new legal developments that impact employers. The Rhoades McKee employment practice group continually monitors significant legal developments in the State of Michigan.

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