As labor lawyers in South Carolina, our attorneys stay informed on all issues that may affect employers in South Carolina. A hot issue in the past several years has been Title VII employment discrimination protections for sexual orientation and gender identity. In May 2016, this Journal addressed whether sexual orientation is a protected class under Title VII, which would protect workers from harassment or negative treatment based on their sexual orientation. To date, three federal courts of appeals have addressed the issue with differing results. Most recently, the Second Circuit ruled on the issue in a rare en banc opinion, potentially setting up the issue for examination by the U.S. Supreme Court. This article will explain how federal regulations are created and enforced and will examine the current status of sexual orientation as a protected class.

Who Are the Players?

Labor laws may seem simple and straightforward, but there is a cadre of players that influence the shape of the landscape that regulates permissible behavior and conduct in an employment atmosphere. These influencers include 1) the laws, regulations, and policies themselves, 2) the federal agencies which are responsible for enforcing the regulations, and 3) the court system which is responsible for interpreting the laws, regulations, and policies when differing interpretations arise.

What is the Difference between Laws, Regulations, and Policies?

Laws, regulations, and policies are the black and white rules that the agencies are to interpret and enforce and employers are to follow. As employment lawyers in South Carolina, we know how important it is to have a masterful understanding of all of these documents and how they may be applied to your particular business. We also know that the regulations and interpretations are constantly changing, so we make it a priority to be aware of the current state of interpretation and enforcement of regulations affecting the workplace.

Laws are created by Congress. Once both the House of Representatives and the Senate pass a law, the president must sign it for it to be enforceable. The broadest federal law that applies to equal employment treatment is Title VII of the Civil Rights Act of 1964, which also contains the Pregnancy Discrimination Act. In short, the law prohibits workplace discrimination and is enforced by the Equal Employment Opportunity Commission (EEOC). The EEOC also enforces:

  • The Equal Pay Act of 1963;
  • The Age Discrimination in Employment Act of 1967 (ADEA);
  • Title I of the Americans with Disabilities Act of 1990 (ADA);
  • Sections 102 and 103 of the Civil Rights Act of 1991;
  • Sections 501 and 505 of the Rehabilitation Act of 1973; and
  • The Genetic Information and Nondiscrimination Act of 2008 (GINA).

Regulations help to implement the federal anti-discrimination laws and are found in the Code of Federal Regulations (CFR). New and proposed regulations are open for public comment after issuance of a Notice of Proposed Rulemaking (NPRM). The EEOC’s significant regulatory actions are approved by the Office of Management and Budget (OMB). Current regulations address everything from employee responsibilities and conduct to debt collection and procedural processes.

Subregulatory guidance documents contain official agency policy and explain how laws and regulations apply to specific workplace situations. The EEOC may hold a public meeting to hear testimony from witnesses and experts on the issue at hand. The EEOC’s subregulatory guidance documents include:

  • A compliance manual that advises staff on matters of law for use during investigations;
  • EEOC enforcement and policy guidance and policy statements that communicate the EEOC’s position on important legal issues; and
  • Management directives that instruct other federal agencies on the administrative procedures for claims of employment discrimination.

All of these documents are used to form commission decisions, memoranda of understanding with other agencies, and EEOC resource documents that aid the public in understanding existing EEOC positions.

What Role do Federal Agencies Play?

Generally, the Equal Employment Opportunity Commission (EEOC) is responsible for enforcing federal laws that make it illegal to discriminate against a job applicant or employee on the basis of a protected class. The EEOC investigates claims of discrimination on behalf of employees or applicants when the employer in issue has more than 15 employees. If the EEOC cannot help to settle the charge, it can bring a lawsuit to protect the rights of individuals and the public. The protected classes have traditionally included race, color, religion, sex, national origin, age, disability or genetic information. More recently, protected classes include sexual orientation and gender identity. The EEOC will enforce its position on what qualifies as a protected class even when contrary state or local laws exist.

The EEOC also acts as a liaison and technical assistance provider to other federal agencies on all aspects of equal employment opportunities policies and programs. Many states, counties, cities and towns have their own laws that prohibit discrimination. Local agencies, collectively referred to as “Fair Employment Practices Agencies,” enforce these local laws. Local prohibitions can be more inclusive (such as marital status or family status), but cannot except federally protected classes from discrimination.

The EEOC sets forth examples of what it considers unlawful treatment of employees, including denying an employee a promotion because s/he is gay or straight or discriminating in the terms, conditions, or privileges of employment because of sexual orientation or denying health coverage because the employee has a same-sex spouse. Since the EEOC began investigating and litigating charges against employers for discrimination on the basis of sexual orientation in 2013, it has collected approximately $6.4 million for individuals.

The Justice Department enforces the law and defends the interests of the United States according to the law. The Office of the Attorney General lies within the Department of Justice. The Attorney General is charged with prosecuting suits in the Supreme Court of the United States where the United States has an interest, advises the president, and advises the heads of any other federal department upon their request. In 2014, the Department of Justice issued a memo stating its position that protections under Title VII would be extended to include a person’s sexual orientation. That is no longer the Justice Department’s position.

What Role do the Courts Play?

The courts are the last resort to resolve language in laws or regulations or to see that the laws are enforced. While federal courts frequently defer to interpretations by federal agencies, that is not always the case. For example, in late February 2018, a federal appeals court in New York ruled that employers are prohibited from discriminating against workers based on the worker’s sexual orientation, despite argument from the Justice Department that the Civil Rights Act of 1964 did not cover sexual orientation discrimination in the workplace.

The Second Circuit’s ruling in New York made it the second circuit to rule in this fashion. The Seventh Circuit out of Chicago was the first to so rule in April 2017. The EEOC has increasingly argued that sexual orientation is a function of a person’s gender. The Second Circuit agreed, stating that one cannot take sexual orientation into consideration without inherently taking sex into consideration: “Sexual orientation discrimination is a subset of sex discrimination because sexual orientation is defined by one’s sex in relation to the sex of those to whom one is attracted making it impossible for an employer to discriminate on the basis of sexual orientation without taking sex into account.”

Three appellate court judges in New York dissented from the 10-judge decision, and the Eleventh Circuit federal court of appeals in Atlanta also ruled in the alternative. The 11th Circuit opinion was appealed to the U.S. Supreme Court, but the court declined to address the case.

What is the Current Status of Discrimination on the Basis of Sexual Orientation?

In 2015, the EEOC decided that discrimination on the basis of sexual orientation was illegal. The ruling, which was reviewed by the Justice Department under President Obama, was not binding on federal courts, although, as previously mentioned, courts frequently defer to federal agencies when the agencies interpret the laws that fall under the courts’ jurisdiction. In 2015, the EEOC received 1,412 charges that included allegations of discrimination on the basis of sexual orientation and/or gender identity. This figure is nearly 30% more than were reported in 2014. It is clear that the incidence of reporting discrimination on the basis of sexual orientation or gender identity is on the rise. South Carolina does not currently have any state laws regarding sexual orientation or gender identity being protected classes. So, how should an employer in South Carolina handle allegations of discrimination on the basis of sexual orientation?

As stated, the EEOC’s position is that sexual orientation is a protected class under Title VII. Despite the current disagreement between federal judicial circuits, employers must be mindful of the EEOC’s position and its enforcement policies and procedures. If an employee in South Carolina were to properly file discrimination charges on the basis of sexual orientation, the EEOC’s position would likely be that the alleged discrimination is unlawful. Additionally, a 2014 executive order signed by President Obama protects federal employees and contractors from sexual orientation discrimination. This order has not yet been undone by the Trump administration.

How Can an Employer in South Carolina Prevent Discrimination on the Basis of Sexual Orientation?

As experienced labor lawyers in South Carolina, Gignilliat, Savitz & Bettis, LLP has a team of attorneys and staff ready to help employers prevent discriminatory conduct from occurring and, in the event of a claim, will help navigate and defend a discrimination claim. The EEOC provides a myriad of training and resources to aid employers in preventing unlawful discrimination. However, for more peace of mind and a plan tailored to your business, contact a seasoned employment attorney at Gignilliat, Savitz & Bettis, LLP to advise in training practices and personnel management to mitigate or eliminate workplace discrimination and make the workplace safer and more comfortable for all employees.