Currently, sexual orientation and gender identity and expression are not amongst the classes protected by federal laws. Under Title VII of the 1964 Civil Rights Act (“Title VII”), employers are prohibited from discriminating against individuals on the basis of race, color, religion, sex or national origin. There have been several attempts to ban discrimination on the basis of sexual orientation, including Executive Order 13087, signed in 1998 by President Clinton, which prohibited federal workplace discrimination based on sexual orientation. In addition, in 2010, President Obama added language prohibiting discrimination based on gender identity to the federal jobs website. Many states have also taken steps to this end. Currently 17 states and the District of Columbia prohibit employment discrimination based on sexual orientation and gender identity, while four states prohibit such discrimination based on sexual orientation only.
Companies are also increasingly taking steps to adopt inclusive policies. According to the Human Rights Campaign’s 2013 Corporate Equality Index, as of 2012, 88% of Fortune 500 companies include “sexual orientation” and 57% include “gender identity” in their nondiscrimination policies. Additionally, of these companies 62% offer equivalent medical benefits between spouses and partners and 25% offer transgender-inclusive health care benefits, including surgical procedures. Several companies who have not chosen to adopt this growing trend have found themselves faced with shareholder initiatives requesting that they expand their nondiscrimination policies to include sexual orientation and gender identity and expression. In 2013, shareholder proposals went to a vote at the following companies: American Financial Group, Inc, AGL Resources, Leggett & Platt, Inc., TECO Energy Inc., Universal Forest Products, Inc., Exxon Mobil Corporation and Crosstex Energy, Inc. Together, these proposals received average support of 32.8%, the highest average support of any type of socially-related shareholder resolution.
However, these resolutions may quickly become a thing of the past. On November 7, the Senate voted 64 to 32 to approve the Employment Nondiscrimination Act (“ENDA”), which would ban on discrimination in the workplace based on sexual orientation gender identity, in what some are calling a “rare” showing of bipartisanship on a social issue. However, this bipartisanship may not extend to members of the House, where Speaker John Boehner has said he will oppose the measure. Even if ENDA does not pass the House, the passage of this law could have more symbolic meaning than practical effects. In April 2012, the Equal Employment Opportunity Commission (“EEOC”) issued a ruling which stated that “intentional discrimination against a transgender individual because that person is transgender” is illegal under Title VII of the Civil Rights Act of 1964, which prohibits sex discrimination. While this does not make gender identity or gender expression expressly federally protected statuses, it does make it possible for the EEOC to prosecute companies for discrimination on the basis of gender identity or gender expression. In fact, the EEOC states that under Title VII of the Civil Rights Act of 1964, “discrimination against an individual because that person is transgender (also known as gender identity discrimination) is discrimination because of sex ” and that “claims by lesbian, gay, and bisexual individuals alleging sex-stereotyping state a sex discrimination claim.”
Although ENDA may not become law, the threat of EEOC enforcement based on any type of discrimination should be enough to encourage companies to ensure that they have broad policies in place in order to prohibit discrimination on the basis of these issues. Moreover, given the extremely high levels of shareholder support seen for these resolutions in recent years, it may be prudent for those companies whose policies may be lagging relative to their peers to strengthen their internal protections against discriminatory employment practices.