Labor & Employment Alert: Executive Order Highlights Legal Protections Against Discrimination Based on Gender Identity or Sexual Orientation

On January 20, 2021 (also known as “Day 1” in political campaigns), among the first Orders of priority, the President issued Executive Order 13988¹, “Preventing and Combatting Discrimination on the Basis of Gender Identity or Sexual Orientation.” If you have any involvement at all in employing people, you need to be aware of this latest wave in employment law.

It’s not news that federal (and Ohio) law has long been that an employer may not refuse to hire, discharge, or otherwise discriminate against an individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s race, color, religion, sex, or national origin². But there has been a debate, at least until recently, concerning the extent or parameters to what “because of … sex” actually means -- inasmuch as it was almost universally conceded that, when this law was enacted back in 1964, no one contemplated that it was addressing employment issues about gender identity or sexual orientation. Over time, the Equal Employment Opportunity Commission (EEOC) came to adopt the position that, regardless of anyone’s conception about the original intent, the words “because of sex,” “obviously” would include gender identity or sexual orientation. As the point was litigated, some federal appellate courts came to agree as well.

The point was finally resolved last summer, when the U.S. Supreme Court, in a decision called Bostock v. Clayton County³ written by Justice Gorsuch, held that: “An employer who fires an individual merely for being gay or transgender defies the law.” One ramification of such a ruling was demonstrated in a case before the Sixth Circuit Court of Appeals in Cincinnati (which has authority over Ohio federal courts). In the case of Kilpatrick v. HCA Human Resources⁴, issued just last month, an employee disclosed to the employer that he was gay; and, he contended, thereafter, he was harassed and, ultimately, discharged. When he filed suit, the trial court threw out his claim, asserting that the federal law did not authorize claims for discrimination based on sexual orientation. But the Court of Appeals reinstated the claim (holding that he was at least entitled to a chance to have his day in court and see what he could prove), because, as a result of the Bostock decision, such claims are now viable.

In other words, before Bostock, employment decisions that implicate gender identity or sexual orientation might well escape any court review at all; since Bostock, such claims will be entitled to the same type of oversight and court review as employers have long faced where other types of discrimination have been alleged. For example, the EEOC announced⁵ last fall that it had filed suit on behalf of an employee who had been harassed by coworkers to the point that the employee quit. The initial claim was based on race and disability discrimination; after Bostock was announced, the claim was amended to add sexual orientation discrimination. The case was settled by way of a consent decree in which the employer was not only ordered to pay $100,000, but to also implement a hotline for employee complaints, institute training for all employees (including management), and to require specific one-on-one training for the manager who did not respond to the plaintiff’s complaints of harassment in the first place.

The Executive Order confirms the new Administration’s full commitment to enforcement of the Bostock decision – and does more. For one thing, there are over a hundred other federal laws which prohibit discrimination “because of sex.” The Order asserts that, although Bostock was an employment case, the government intends to apply its reasoning in interpreting those other laws. For example, with respect to education⁶, the government will assume that the old rules against discrimination now extend to claims asserting gender identity or sexual orientation -- some of the issues frequently mentioned in this regard involve access to bathrooms, locker rooms, and sports teams or competitions, where a dividing line between men and women facilities has now become blurred.

Additionally, the Order directs all federal agencies to now reevaluate the regulations which they enforce to assess whether they need revision to account for Bostock and the Administration’s commitment to it, and to, within 100 days, come up with a plan as to how they will proceed. For example, OSHA previously issued, under the category of “Best Practices,” a “Guide to Restroom Access for Transgender Workers.”⁷ Citing to its existing standard, 1910.141, that employers are required to provide their employees with toilet facilities, it asserted a “Core Principle”: “all employees, including transgender employees, should have access to restrooms that correspond to their gender identity.” OSHA could now easily take this Executive Order directive as an opportunity to attempt to transform its “best practices” into “mandatory requirements.”

Suffice it to say that this issue will obviously become a priority whenever government agencies are engaged in investigation and enforcement actions. And it will likely be a subject that gains heightened attention in the media.

Regardless of how the scope of Bostock may evolve in the months ahead, within employment law, it already is clear and binding law. Employers need to be aware that, for example, their internal policies prohibiting discrimination, as well as their directives to employees on what grievances to report and how to do it, may well not include wording that clearly encompasses this issue. If that is the case, an employee who tomorrow, or the day after, files a complaint alleging discrimination based on gender identity or sexual orientation may well be able to say that the employer didn’t even have a policy against it or indicate to me how I should address it – so I was left no choice but to file a legal complaint. Similarly, past training of employees as to what kind of conduct is forbidden, or of managers as to how to respond to employee complaints, may well have omitted any mention of this issue – so when a future suit is filed, the unhappy employee may be able to argue that they endured bad conduct, with no one stopping it or responding to a complaint.

The takeaway is this: Bostock has fundamentally changed the underlying legal obligation; and the Executive Order provides employers with fair notice that the government will now be fully enforcing these new types of claims. Employers should take the opportunity to review existing policies, protocols, and training now to anticipate these issues and take actions to head off future legal problems before they arise.