Employers facing sexual orientation discrimination claims under Title VII of the Civil Rights Act of 1964 (“Title VII”) may now use a federal appellate court decision to help defend against such a claim. While the Equal Employment Opportunity Commission (“EEOC”) makes its push to include sexual orientation as a Title VII protection (see related article), the United States Court of Appeals for the Seventh Circuit (the “Seventh Circuit”), which considers appeals from federal courts in Illinois, Indiana, and Wisconsin, rejected the agency’s Title VII interpretation. This article analyzes the Seventh Circuit’s decision and provides practical takeaways for employers.
Seventh Circuit’s Decision
Title VII protects employees based on “race, color, religion, sex, or national origin.” The statute does not expressly protect employees based on sexual orientation, and federal appellate courts that have considered the issue have “been unequivocal in holding that Title VII does not redress sexual orientation discrimination.” Notwithstanding this precedent, the EEOC, which is the federal agency charged with enforcing Title VII, interprets Title VII to provide such protection. Since 2012, the agency has aggressively pursued charges of discrimination based on sexual orientation, and recently began pursuing federal lawsuits against employers arguing that sexual orientation discrimination is prohibited by Title VII.
In Hively v. Ivy Tech Community College, the Seventh Circuit explicitly rejected the EEOC’s Title VII interpretation that Title VII prohibits discrimination based on sexual orientation. In its decision, the court considered the numerous failed attempts in Congress to amend Title VII to include sexual orientation protections, as well as the Supreme Court’s refusal to consider sexual orientation under Title VII. The Seventh Circuit acknowledged the “emerging consensus that sexual orientation [discrimination] in the workplace can no longer be tolerated,” but held that absent Congressional legislation amending Title VII to include sexual orientation or a Supreme Court decision interpreting sexual orientation to fall within the Act’s protection, Title VII does not protect employees on the basis of sexual orientation.
The Seventh Circuit’s Hively decision provides a strong rebuke to the EEOC’s position that Title VII prohibits sexual orientation discrimination. However, the practical impact of the decision on employers is limited for several reasons.
First, employers outside Illinois, Indiana, and Wisconsin (the territory covered by the Seventh Circuit) should expect the EEOC to continue pursuing sexual orientation cases. Second, the Hively decision confirms that employers and employees must look primarily to state and local laws—not Title VII—to determine the scope of protections provided to employees based on sexual orientation. At this time, twenty-two (22) states (including California, Colorado, New Mexico, New York, and Utah) and various municipalities prohibit employment discrimination based on sexual orientation. Third, as the Seventh Circuit addressed in Hively, there is a national trend that employees should be protected from sexual orientation discrimination, and the Equality Act—which would amend Title VII to prohibit sexual orientation discrimination—continues to gather support (see related article), including from Democratic Presidential Nominee Hillary Clinton who stated the bill is her “highest priority.”
In light of the foregoing, employers should consider prohibiting discrimination and harassment based on sexual orientation regardless of where they are located. Companies that have already adopted policies prohibiting sexual orientation discrimination should ensure staff and management are properly trained on the policies to be best equipped to defend potential charges and/or lawsuits. As always, employers should consult with their labor and employment counsel when considering implementing such policies.
 42 U.S.C. § 2000e-2(a).
 Hively v. Ivy Tech Community College, 2016 WL 4039703, at *2 (7th Cir. July 28, 2016) (listing appellate decisions holding Title VII does not redress sexual orientation discrimination).
 See https://www.eeoc.gov/eeoc/newsroom/wysk/enforcement_protections_lgbt_workers.cfm
 See, e.g., EEOC v. Pallet cos., No. 16-cv-00595, consent decree (D. Md. June 23, 2016); EEOC v. Scott Medical Health Cent., P.C. , 16-cv-00225 (W.D. Pa. filed Mar. 1, 2016); see also Evans v. Ga. Regional Hosp., No. 15-15234 (11th Cir. amicus brief filed Jan. 11, 2016); Burrows v. The College of Cent. Fla., No. 15-14554 (11th Cir. amicus brief filed Jan. 6, 2016); Muhammed v. Caterpillar Inc., No. 12-173 (7th Cir. amicus brief filed Oct. 9, 2014); Baldwin v. Foxx, EEOC Appeal No. 0120133080, 2015 WL 4397641 (July 16, 2015).
 Hively v. Ivy Tech Community College, 2016 WL 4039703 (7th Cir. July 28, 2016). Two other appellate courts are also considering the EEOC’s Title VII interpretation. See Christiansen v. Omnicom Group Inc., No. 16-748 (2d Cir filed Mar. 9, 2016); Evans v. Ga. Regional Hosp., No. 15-15234 (11th Cir. amicus brief filed Jan. 11, 2016).
 Id. at *14.
 Id. at *3.
 Julie Furer Stahr, Seventh Circuit: Title VII Offers No Protection Against Sexual Orientation Discrimination, The National Law Review (Aug. 2, 2016) (available at: http://www.natlawreview.com/article/seventh-circuit-title-vii-offers-no-protection-against-sexual-orientation) (last accessed Aug. 4, 2016).
 Kevin McGowan, Title VII Doesn’t Cover Sex Orientation, 7th Cir. Rules, Bloomberg BNA Daily Labor Report (July 29, 2016).