On Monday, February 26, 2018, the U.S. Second Circuit Court of Appeals issued a landmark ruling in holding that workplace discrimination premised on an employee’s sexual orientation is covered by Title VII’s express prohibition against gender-based discrimination. In so doing, the Second Circuit reversed its own precedent established less than one year ago, and in doing so, offered further judicial support for the protections of the LGBTQ+ community.

In a divided, en banc opinion, the Second Circuit decided the case of Zarda v. Altitude Express.  In its decision, the Court revived a sex bias claim brought by Donald Zarda, a Long Island, New York sky-diving instructor who claimed that his employer, Altitude Express, had terminated his employment based on his sexual orientation.  In its decision, the Second Circuit held that it saw “no principled basis for recognizing a violation of Title VII for associational discrimination based on race, but not on sex.” With its ruling, the case was sent back to the trial court for further proceedings.

The federal lawsuit was brought on Mr. Zarda’s behalf, and against his former employer, by the U.S. Equal Employment Opportunity Commission (EEOC).  Interestingly, during the appeal, the U.S. Department of Justice filed an amicus brief in opposition to Zarda and the EEOC.  In its briefing, the Justice Department stated that “[t]he sole question here is whether, as a matter of law, Title VII reaches sexual orientation discrimination. . . . . It does not, as has been settled for decades. Any efforts to amend Title VII’s scope should be directed to Congress rather than the courts.”  Additionally, the Justice Department noted that the EEOC was “not speaking for the United States.”

For years, LGBTQ+ employees could only advance claims of workplace discrimination under a theory of “sex stereotyping” discrimination—that is, discrimination based on an employee’s failure to confirm to an employer’s perceived gender roles.  In July 2015, the U.S. Equal Employment Opportunity Commission (EEOC) issued its first administrative ruling declaring that Title VII’s use of the word “sex” meant both gender and sexual orientation. However, no federal court immediately adopted or mirrored the EEOC’s guidance.

In fact, the Second Circuit expressly rejected the EEOC’s guidance just last year when it decided the case of Christiansen v. Omnicom Group, Inc.  There, the Second Circuit ruled that employees did possess viable Title VII claims based on the theory of “sex stereotyping.”  However, the Court also expressly stated that Title VII’s definition of “sex” did not cover a person’s sexual orientation—a decision that tracked the historical rulings of other U.S. courts, in holding that the term “sex” within Title VII refers only to a person’s gender—meaning that discrimination had to be premised on whether a worker is male or female.

Then, only nine days after the Christensen ruling, on April 4, 2017, the U.S. Seventh Circuit Court of Appeals became the first federal appellate court to rule that Title VII does extend workplace protections on the basis of their sexual orientation.  In deciding the case of Hively v. Ivy Tech, the Seventh Circuit opted to expand the definition of “sex” under Title VII to include an individual’s “sexual orientation.” With its ruling in Zarda, the Second Circuit is now aligned with both the EEOC and Seventh Circuit, thus ruling that Title VII effectively presents two avenues of recovery for individuals asserting claims on the basis of their sexual orientation.

The Second Circuit’s majority ruling Zarda was written by the Court’s Chief Judge, Robert A. Katzmann. He was joined, either in whole or in part, by nine other judges on the court. The three remaining judges dissented. In addition to Judge Katzmann’s decision, seven judges wrote separate opinions, concurring and dissenting.

Either the Justice Department or Altitude Express could seek review of the decision before the United States Supreme Court. Neither party had any immediate comment on the ruling. In December 2017, the U.S. Supreme Court passed on an initial opportunity to weigh-in on the issue when it declined to hear an appeal from the Eleventh Circuit Court of Appeals, in which that Court held that Title VII did not extend to sexual orientation.

In May 2017, a federal district court judge from the Eastern District of Pennsylvania ruled that the Americans with Disabilities Act (“ADA”) may cover “gender dysphoria,” as well as other conditions related to “gender identity disorder.” Though seen as a departure from previously established law, this ruling could open the door to expanding employment protections to some transgender individuals under the ADA.

What is “Gender Dysphoria”

By now, the term “transgender” is a common term in our national vocabulary.  “Transgender” is an umbrella term for people whose gender identity and/or gender expression is different from cultural expectations placed on them due to their biologically-assigned birth gender. An issue more and more transgender individuals are seeking treatment for is known as “gender dysphoria.” The Human Rights Campaign defines “gender dysphoria” as “clinically significant distress caused when a person’s biologically-assigned birth gender is not the same, or does not match, the gender with which that person “identifies.”

Historical Treatment of LGBTQ Issues under the ADA

Historically, the ADA has not recognized LGBTQ-related conditions as covered disabilities. Specifically, Section 12211 of the ADA contains a number of exclusions—including “homosexuality” and “bisexuality” on the grounds that they are not “impairments” at all. The ADA also excludes “transvestism, transsexualism, pedophilia, exhibitionism, voyeurism, gender identity disorders not resulting from physical impairments, or other sexual behavior disorders; compulsive gambling, kleptomania, or pyromania; or psychoactive substance use disorders resulting from current illegal use of drugs.”

“Transsexualism” and “gender identity disorders not resulting from physical impairments” seem to be 1990s-era terms for the state of being what we call today “transgender.” And based on the other conditions that “transsexualism” and “gender identity disorders” are grouped with, it appears that in 1990, Congress considered these to be “anti-social” behaviors. Other “anti-social” behaviors not covered under the ADA include peeping, child molestation, compulsive stealing, and compulsively setting things on fire.

Recent Third Circuit Ruling – Blatt v. Cabela’s Retail, Inc.

On August 15, 2014, a transgender woman filed Title VII and ADA claims against her former employer, claiming that she had suffered disability discrimination and retaliation based on her “gender dysphoria.” In her case (styled Blatt v. Cabela’s Retail, Inc., No. 5:14-cv-04822-JLS), the plaintiff alleged that her gender dysphoria was characterized by clinically significant stress and substantially limited one or more of her major life activities, including but not limited to, interacting with others, reproducing, and social and occupational functions.

The employer sought early dismissal of the ADA claims on the grounds that gender identity disorders are expressly excluded from coverage under Section 12211 of the ADA. In response, the plaintiff argued that excluding gender dysphoria from ADA protection violated the Equal Protection Clause of the Fourteenth Amendment—a particularly novel argument in light of recent U.S. Supreme Court, including the 2015 gay marriage opinion (Obergefell v. Hodges, 135 S. Ct. 2584 (2015)). However, the district court judge sidestepped this Equal Protection issue altogether.

Instead, the judge ruled that a plaintiff’s “gender dysphoria” could be an ADA-protected disability—despite the language in Section 12211 excluding “gender identity disorders not resulting from physical impairments”— if the dysphoria caused “clinically significant stress and other impairments.” In reaching its holding, the court noted that two categories of conditions are explicitly excluded from protection under the ADA: (1) non-disabling conditions concerning sexual orientation and identity (e.g., homosexuality and bisexuality), and (2) conditions associated with harmful or illegal conduct (e.g., pedophilia and kleptomania). The court then narrowly interpreted these exceptions and found that the ADA does not exclude protection of “conditions that are actually disabling but that are not associated with harmful or illegal conduct” – such as the gender dysphoria affecting the plaintiff.

In other words, the court ruled that a person with an ADA-excluded condition may also have medical conditions that are covered by the ADA. For many commentators, the judge relied on solid ADA-rationale applied to other conditions. For example, pregnancy is not an ADA-protected disability in itself. But if a pregnant woman develops a related condition such as preeclampsia (high blood pressure associated with pregnancy that can result in a stroke or permanent liver damage), she may have a protected disability based on the pregnancy-related medical condition, although not based on the pregnancy itself. Similarly, although homosexuality is not an ADA-protected disability, a gay man with HIV would have a disability based on the HIV condition.

Using the Blatt court’s rationale, a transgender individual with “gender dysphoria” would be no different.  For example, clinical depression caused by discrimination against an individual because he/she was transgender would clearly qualify as an ADA-protected condition under the rationale used in Blatt. Conversely, the individual’s transgender status—in and of itself—would not be entitled to ADA protection, as that is clearly excluded under Section 12211.

The court also noted that its interpretation of the ADA is consistent with the Third Circuit’s mandate that the ADA is “a remedial statute, designed to eliminate discrimination against the disabled in all facets of society. . . [and] must be broadly construed to effectuate its purposes.” Thus, the judge wrote any exceptions in the ADA “should be read narrowly in order to permit the statute to achieve a broad reach.”

This is yet another case in a recent wave of litigation concerning protections for LGBTQ individuals under the federal employment statutes. This ADA challenge represents a different approach to gender equity litigation that will warrant close monitoring to see how it impacts the development of jurisprudence—especially since it remains to be seen if the defendant will appeal the ruling, or if other jurisdictions will apply the Blatt rationale. In the meantime, employers should be mindful of their duties under the ADA to accommodate disabling impairments, even if the underlying condition is arguably not covered by the ADA.