Federal Appeals Court Finds That Title VII Prohibits Sexual Orientation Discrimination

Friday, April 21, 2017

In a groundbreaking decision, the Seventh Circuit Court of Appeals ruled earlier this month that Title VII of the Civil Rights Act prohibits discrimination on the basis of sexual orientation. The Seventh Circuit’s decision in Hively v. Ivy Tech Community College of Indiana is significant because it is the first decision by a federal appeals court to hold that sexual orientation discrimination is prohibited under Title VII.

Hively v. Ivy Tech Community College of Indiana

The fundamental question at issue in Hively was whether Title VII’s prohibition against discrimination “because of sex” encompasses discrimination on the basis of sexual orientation.  As noted in our previous posts on this topic (here and here), federal courts have historically answered “no” to that question and excluded sexual orientation discrimination from the protections of Title VII.   Indeed, last summer, a three-member panel of the Seventh Circuit concluded that its prior precedent precluded Hively’s claim for sexual orientation discrimination under Title VII and affirmed a lower court ruling dismissing her case.  In reaching that conclusion, however, the three-member panel questioned the continuing vitality of its previous decisions, particularly given the evolution of the law since Title VII was first passed in 1964, including the Supreme Court’s 2015 decision in Obergefell v. Hodges, which extended constitutional protections to the right of same-sex couples to marry.  As the three-member panel observed, its prior precedent created a “paradoxical legal landscape in which a person can be married on Saturday and then fired on Monday for just that act.” 

Given this landscape, the full panel of the Seventh Circuit voted to rehear argument in Hively and, in its 8-3 decision this month, reversed its position.  The court gave two reasons for its decision.  First, applying a “comparative” method, the court explained that Hively’s primary allegation was that she would not have been terminated if, instead of being a woman, she were a man married to a woman,.  According to the court, this allegation described “paradigmatic sex discrimination” because it alleged differing treatment “because she is a woman.”  The court went on to explain that the line between gender stereotyping claims (which the Supreme Court recognized in Price Waterhouse v. Hopkins) and claims based on sexual orientation is not only “gossamer-thin,” it “does not exist at all.”  Second, the court explained that its decision was guided by a line of cases beginning with the Supreme Court’s 1967 decision in Loving v. Virginia, which prohibited discrimination against a person because of the protected characteristic of the one with whom he or she associates.  According to the Seventh Circuit, because a change in the sex of one partner would change the alleged outcome in this case, that change revealed that the alleged discrimination rested on impermissible “distinctions drawn according to sex.”

The Seventh Circuit’s decision provides new critical context for actions at the Eleventh and Second Circuits, both of which recently held that their prior decisions barred claims for sexual orientation discrimination under Title VII.  Should one or both of those circuits rehear argument and affirm their positions, it will create a circuit split that will certainly find its way to the Supreme Court.

Following Maine's Minimum Wage & Tip Credit: An Update for Employers

Thursday, April 6, 2017

The evolution of Maine wage payment laws continues apace, and a raft of legislative bills are currently undergoing scrutiny in Augusta.   Back in November, Maine voters increased the state minimum wage to $9 per hour and approved phasing-out the “tip credit” by increasing the minimum direct service wage for tipped employees to $5 per hour in 2017 and increasing it by an additional $1 per hour each year until it reaches the state minimum wage.   On Wednesday, April 5th, the Joint Standing Committee on Labor, Commerce, Research and Economic Development held public hearings on a list of bills seeking to modify -- or reverse recent changes to -- Maine’s minimum wage law.

Even though voters ultimately cast their ballots and approved changes to the minimum wage by referendum, fierce debate continues in Augusta as to how Maine businesses ought to be impacted and what modifications, if any, should be made.  High attendance at the April 5 hearing served to demonstrate the contentiousness of the topic.   Representatives from Maine People’s Alliance and Maine Small Business Coalition lined the halls in support of upholding the referendum, while the Maine Restaurant Association, Maine Chamber of Commerce and others business groups rallied members in opposition.   State House metal detectors got a workout – the Legislature saw its busiest public hearing of the year, with testimony extending into the morning hours on Thursday.

During the hearing, the committee heard testimony on the following bills:

  • LD 774, "An Act To Create a Training Wage." This bill provides a minimum hourly training wage of $1 above the federal minimum wage for a person who is 20 years of age or under and is a student at a secondary or postsecondary school.
  • LD 775, "An Act To Prohibit the Minimum Wage from Exceeding the New England Average." This bill provides that the minimum wage may not exceed the average minimum wage paid in the New England states, as determined by the Maine commissioner of labor.
  • LD 778, "An Act To Eliminate the Indexing of the Minimum Wage to Inflation." This bill eliminates the indexing of the minimum wage to inflation, which under current law is scheduled to begin on January 1, 2021.
  •  LD 831, "An Act To Base the Minimum Wage on a New England State Average and To Restore the Tip Credit." This bill provides that starting Jan. 1, 2018, the minimum hourly wage is the average minimum hourly wage in the New England states of New Hampshire, Vermont, Massachusetts, Connecticut and Rhode Island on July 1 of the previous year, as determined annually by the Maine commissioner of labor. It also restores the tip credit.
  • LD 971, "An Act To Exempt Certain Employees from the Minimum Wage Laws." This bill exempts from the minimum wage laws an employee who has not attained 18 years of age, is claimed as a dependent on the income tax return of another person or is employed by a seasonal employer.
  • LD 991, "An Act To Establish a Minimum Wage for Minors." This bill establishes a minimum hourly wage for minors that is 75% of the minimum hourly wage established for persons who are 18 years of age and older.
  • LD 1005, "An Act Regarding Minimum Wage Increases." This bill eliminates the $1 per hour increases in the minimum wage scheduled for each of the next three years and eliminates increases in the minimum wage based on the increase in the cost of living starting in 2021. It also restores the tip credit to the minimum wage laws.

In addition, testimony was heard on the following bills all seeking to restore the "tip credit" used by Maine’s restaurateurs:

  • LD 673, "An Act To Restore the Tip Credit to Maine's Minimum Wage Law." This bill restores the tip credit to the minimum wage laws
  • LD 702, "An Act To Restore the Tip Credit to Maine Employees." This bill also restores the tip credit in the minimum wage laws.
  • A third bill, LD 1117, "Resolve, To establish the commission to study the phase-out of sub-minimum wage," seeks to study the phase-out of the tip credit and have the commission report back to the full Legislature with recommendations in 2019.

Any business operating in the state with at least one employee, including all public and private employers, is automatically covered by Maine labor laws and needs to comply with the updates. The new minimum wage laws went into effect on January 1, 2017, although employers were given a one month grace period to comply with changes in the tip credit or the minimum salary requirement for overtime-exempt workers.

Ultimately, the committee did not vote on the issue on Wednesday, April 5. Still, with further changes inevitably on the horizon, employers should remain attentive to the fate of all bills pending in Augusta. We will offer updates as things progress between now and the end of the legislative session.