Jun 15, 2017

The Diagnosis: Hively v. Ivy Tech Community College of Indiana

The U.S. Court of Appeals for the Seventh Circuit broke with decades of precedent on April 4, 2017, when it recognized sexual orientation discrimination as a form of sex discrimination prohibited by federal law. Title VII of the 1964 Civil Rights Act (as amended by the 1991 Act or Civil Rights Act), makes it unlawful for employers governed by the Act to discriminate based on an employee’s “race, color, religion, sex, or national origin.” 42 U.S.C. §2000(e) – 2(a). The fundamental prohibition against sex discrimination has not changed since the statute was enacted 53 years ago.

The majority opinion authored by Chief Judge Wood will no doubt create controversy. The issue of whether sexual orientation discrimination should be prohibited by Title VII generated a concurring opinion from Circuit Judge Posner, another concurring opinion authored by Circuit Judge Flaum (joined by Circuit Judge Ripple), and a strong dissent written by Circuit Judge Sykes (joined by Circuit Judges Bauer and Kanne).

As of this writing, the Seventh Circuit stands alone among the U.S. Courts of Appeals. There is no other federal Court of Appeals which has recognized sexual orientation discrimination as a form of sex discrimination prohibited by the Civil Rights Act. Accordingly, either Congress will issue legislation to amend the Civil Rights Act, or the U.S. Supreme Court will accept a case involving allegations of sexual orientation discrimination to resolve the circuit split.

Some commentators have questioned the significance of the Hively decision because so many state and municipal statutes ban sexual orientation discrimination. However, the vast scope of federal law should not be underestimated, and the potency of electronic discovery allowed in federal court should be weighed in the balance. The Hively decision also raises the prospect of class action litigation in federal court based on sexual orientation discrimination.

Facts of the case

Kimberly Hively started teaching as a part-time adjunct professor at Ivy Tech Community College’s South Bend (Ivy Tech) campus in the year 2000. She applied for six full-time professor positions between 2009 and 2014, and all of her applications were rejected. Hively alleged in the complaint that she was openly lesbian during her employment at Ivy Tech. She filed a charge with the Equal Employment Opportunity Commission (EEOC) in December of 2013, alleging that she was discriminated against by Ivy Tech because of her sexual orientation. The district court granted the motion to dismiss filed by Ivy Tech, based on the failure to state a claim, due to the unbroken line of cases finding that sexual orientation discrimination is not prohibited sex discrimination.

A three-judge panel of the Seventh Circuit first heard the case in 2016 and affirmed the decision to dismiss the action in Hively v. Ivy Tech Community College, 830 F.3d 698 (7th Cir. 2016). However, in an unusual procedural twist, the majority of the judges on the Seventh Circuit voted to rehear the case en banc, “in light of the importance of the issue . . . .” Hively, 853 F.3d at 343.

Reasoning employed by the majority opinion

The majority opinion noted at the outset that the court did not have the power to amend Title VII of the Civil Rights Act. Instead, the court framed the issue as follows: “We must decide instead what it means to discriminate on the basis of sex and in particular, whether actions taken on the basis of sexual orientation are a subset of actions taken on the basis of sex.” Hively, 853 F.3d at 343.

The Seventh Circuit relied in part on the evolution of U.S. Supreme Court jurisprudence. The court cited the Supreme Court decisions in Oncale v. Sundowner Offshore Services, Inc. 523 U.S. 75 (1998), which decided that Title VII’s protection against sex discrimination applied to harassment in the workplace between members of the same sex. In addition, the majority opinion cited Price Waterhouse v. Hopkins, 490 U.S. 228 (1999), which decided that discrimination based on a person’s failure to conform to certain gender stereotypes constituted sex discrimination in violation of Title VII.

The court rejected Ivy Tech’s argument that the court should not endorse sexual orientation as a form of sex discrimination because Congress has frequently considered this issue, and decided not to add “sexual orientation to the list of prohibited characteristics which should be protected by Title VII” Hively, 853 F.3d at 344. Instead, the majority noted that the EEOC announced in 2015 that it considers sexual orientation discrimination a form of sex discrimination. Id.

The majority opinion accepted both methods of proof submitted by Hively to assert that sexual orientation discrimination constitutes sex discrimination, as follows:

“Hively offers two approaches in support of her contention that ‘sex discrimination’ includes discrimination on the basis of sexual orientation. The first relies on the tried-and-true comparative methods in which we attempt to isolate the significance of the plaintiff’s sex to the employer’s decision: has she described a situation in which, holding all other things constant and changing only her sex, she would have been treated the same way? The second relies on the Loving v. Virginia, 388 U.S. 1, 87 S. Ct. 1817, 18 L.Ed.2d 1010 (1967), line of cases, which she argues protect her right to associate intimately with a person of the same sex. Although the analysis differs somewhat, both avenues end up in the same place: sex discrimination.”

Concurring and dissenting opinions

Circuit Judge Posner submitted a concurring opinion with a more revolutionary basis for finding that sexual orientation discrimination should constitute sex discrimination. None of the other judges joined his opinion. Judge Posner plainly revealed that he had reinterpreted Title VII with “a meaning that infuses the statement with vitality and significance today.” From his perspective, the judiciary has the latitude to reinterpret a statute based on the passage of time and cultural changes, as follows:

“Title VII of the Civil Rights Act of 1964, now more than half a century old, invites an interpretation that will update it to the present, a present that differs markedly from the era in which the Act was enacted. But I need to emphasize that this third form of interpretation – call it judicial interpretive updating –presupposes a lengthy interval between enactment and (re)interpretation. A statute when passed has an understood meaning; it takes years, often many years, for a shift in the political and cultural environment to change the understanding of the statute.” Hively, 853 F.3d at 351.

Circuit Judge Sykes wrote a strong dissent, joined by Circuit Judges Bauer and Kanne. After describing the case as “momentous,” Judge Sykes criticized his colleagues for usurping the authority of Congress by issuing an amendment to Title VII via a judicial opinion:

“The question before the en banc court is one of statutory interpretation. The majority deploys a judge-empowering, common-law decision method that leaves a great deal of room for judicial discretion. So does Judge Posner in his concurrence. Neither is faithful to the statutory text, read fairly, as a reasonable person would have understood it when it was adopted. The result is a statutory amendment courtesy of unelected judges. Judge Posner admits this; he embraces and argues for his conception of judicial power. The majority does not, preferring instead to smuggle in the statutory amendment under cover of an aggressive reading of loosely related Supreme Court precedents. Either way, the result is the same: the circumvention of the legislative process by which the people govern themselves.”

The Diagnosis

Congress certainly has the power to amend the Civil Rights Act and that would end the judicial debate ignited by claims of sexual orientation discrimination. Democrat legislators have introduced the Equality Act of 2017, which would amend the Civil Rights Act and the Fair Housing Act to bar anti-gay discrimination in housing, employment and public accommodations, as well as certain federal programs. However, given the current political climate, it is unclear whether a sufficient number of Republicans will join the bill. If the Equality Act or similar legislation is not passed, then the U.S. Supreme Court will have to resolve the circuit split.

As pointed out by the dissent in Hively, the majority opinion is vulnerable to the assertion that the Seventh Circuit legislated from the courthouse. Nonetheless, there are compelling reasons to include gay bias discrimination in the definition of sex discrimination. If the U.S. Supreme Court is required to resolve the issue, it is likely to generate a contested decision with the Justices divided along political lines. 

This Chuhak & Tecson, P.C. communication is intended only to provide information regarding developments in the law and information of general interest. It is not intended to constitute advice regarding legal problems and should not be relied upon as such.

Client Alert authored by: David J. Tecson, Principal