On July 29, the Seventh Circuit Court of Appeals handed the EEOC a major setback, concluding that Title VII does not protect employees against employment discrimination based on sexual orientation. In Hively v. Ivy Tech Community Coll., the court rejected legal reasoning used by the EEOC last year to conclude that sexual orientation discrimination inherently involves bias based on the person’s sex. The Seventh Circuit’s opinion relied on two grounds: (1) repeated, unsuccessful attempts to amend Title VII to specifically include sexual orientation among its protected classifications; and (2) decades of federal court precedent rejecting sexual orientation claims under Title VII.

The court declined to accept the EEOC’s argument that the earlier precedents be rejected based on current understandings of sexual orientation and its relationship to similar forms of discrimination. While the court expressed its view that public policy arguably should include such prohibitions, it left this step up to Congress.

The EEOC is assisting with similar claims pending before the Second and Eleventh Circuits. A contrary decision from one of these courts could set the stage for an appeal to the U.S. Supreme Court on this issue. The Seventh Circuit noted that its decision has no impact on Title VII claims based on gender identity. Therefore, its reasoning would not apply to claims of discrimination based on transgender status, or discrimination against gay employees based on sex stereotyping instead of their sexual orientation itself.

Most larger employers already voluntarily prohibit discrimination on the basis of sexual orientation. However, if the Seventh Circuit’s reasoning is accepted by other federal appellate courts, employees seeking legal recourse for such bias could not pursue these claims under federal civil rights laws.