Federal law now protects LGBTQ workers from discrimination; what does it mean for Madison employers?

SCOTUS decision mostly reaffirms existing Wisconsin law, though local employers may still need to revamp policies, especially if they do business in multiple states.
Feature Supremecourtrulingonlgbtqworkerrights Panel

In the wake of the U.S. Supreme Court’s landmark June 15 decision in Bostock v. Clayton County, which grants gay, lesbian, and transgender workers the same protections under the law as other protected classes, many Madison-area employers may be wondering how the ruling now affects them. The answer is the federal ruling enhances many of the same protections that were already in place locally and throughout Wisconsin.

Wisconsin was the first state to prohibit sexual orientation discrimination in employment in both the private sector and public sector back in 1982, so key employment protections and rights have been in place for Wisconsin employees for decades under the Wisconsin Fair Employment Act (WFEA), notes Michael Gotzler, an attorney with Littler in Madison. That said, the WFEA differs in significant ways from Title VII, the federal antidiscrimination law under which yesterday’s SCOTUS decision was brought.

“Perhaps most notably, Title VII authorizes the award of compensatory damages like pain and suffering and also punitive damages, while the WFEA does not,” Gotzler explains. “Employees have also long pursued class action discrimination claims under Title VII, making it a known path for group claims of mistreatment. This decision will therefore provide Wisconsin employees with an important additional option for pursuing their claims.”

Additionally, the city of Madison’s ordinances already prohibited discrimination on the basis of both sexual orientation and gender identity, as well, says Brenna McLaughlin, an attorney with Boardman & Clark LLP.

Michael Gotzler

Brenna McLaughlin

Jessica M. Kramer

As a practical matter, there should be little to no change for many Wisconsin employers, notes Jessica M. Kramer, partner at Madison-based Kramer, Elkins & Watt LLC. However, fewer than half of the states explicitly include sexual orientation and/or gender identity in their state employment laws, and the federal circuit courts have been inconsistent in determining whether sexual orientation or gender identity came under the purview of Title VII.

“Now, there is no room for such inconsistency anymore,” says Kramer. “Federal law (Title VII) — to which employers with 15 or more employees are subject — protects employees from discrimination on the basis of sex, sexual orientation, and gender identity. What this means for Wisconsin employers is that, for employers that have employees nationwide, or even in multiple states, the way that employer operates company-wide might need to change.

“Employers that operate nationwide or have employees in multiple states will want to consider whether any of their policies, practices, or training of management do not consider sexual orientation or transgender identity to be just as protected as an employee’s sex,” Kramer continues. “The protections extend to termination of employment, as well as other adverse actions, such as discipline and being passed over for a promotion.

“Anytime there is a change in employment law, though, it is a good time for all employers to review their policies and determine whether anything needs revising,” Kramer adds. “Even if the policies themselves are in good shape, employers might wish to consider updated training of managers and others who make decisions regarding employment status of employees.”

One thing the decision does not change is the standard of proof necessary to prevail on Title VII discrimination claims. It also leaves intact the burden-shifting analysis followed in such claims. In short, a discrimination claimant will still need to prove discrimination either with direct evidence, or more commonly, with indirect evidence, Gotzler explains.

“To do so, the claimant must show he was in a protected group, the employer knew of his status in the group, the employer took adverse action (a demotion, termination, failure to hire, etc.), and similarly situated employees outside the group were treated differently,” says Gotzler. “If the employee is able to preliminarily prove each such element, the burden of proof shifts to the employer to show it took the challenged action based on a legitimate, nondiscriminatory reason.

“At this stage, employers often rely on documentation to support their action,” adds Gotzler. “While not unlawful, employers that instead rely only on vague justifications like ‘he didn’t seem to be a good fit’ will be at a significant disadvantage defending a claim because the claimant is then given the chance to demonstrate that the employer’s stated reason is simply a pretext for discrimination. Here, claimants can succeed if they can point to other evidence or documentation that undercuts or casts doubt upon the employer’s stated reason, leaving a judge or jury to conclude that prohibited discrimination was the real reason.”

The “not a good fit” defense is a risky position for employers to take whenever an employee that is being terminated is in any protected class (sex, age, disability, etc.), advises Kramer. While an employee bringing a discrimination claim usually has the burden to prove that the employee’s membership in a protected class was a reason for the termination, it need only be a reason and not the sole reason.

“This means that the employer could even have a more specific reason than fit — for example, the employee was subordinate to a supervisor or habitually showed up late,” Kramer states. “If evidence put forth by the employee demonstrates that the employer was motivated at all by the employee’s sexual orientation (for example), an employee might be able to prevail on a claim of sex discrimination.”

Ultimately, while the SCOTUS decision in Bostock v. Clayton County doesn’t represent a seismic shift for Madison-area employers, for some employees this might mean being more comfortable expressing their sexual orientation or gender identity in the workplace, says McLaughlin. “LGBTQ+ employees should be aware of their companies’ employment policies and promptly report any potential discriminatory or harassing conduct as provided by these policies.”

In addition, LGBTQ+ applicants and employees now have access to federal employment law remedies based on both sexual orientation and gender identify, McLaughlin notes. “Federal law remedies tend to be more favorable to employees than the remedies available under state law and can include emotional damages such as for pain and suffering,” she states. “This means that the stakes have gone up for employers that engage in LGBTQ+ employment discrimination. Employers should take this opportunity to review their policies and consider whether any training for their workforce is appropriate in light of the Bostock decision.”

“It is important to keep in mind that, as the Supreme Court pointed out, the decision does not extend to issues like bathrooms in the workplace, locker rooms, and dress codes,” notes Kramer. “Whether sex-segregated bathrooms or locker rooms or dress codes might violate Title VII ‘are questions for future cases,’ Justice Neil Gorsuch, who authored the Supreme Court’s majority opinion, wrote. These issues are likely now even more ripe for legal challenges, given the Supreme Court’s decision, so employers should be thinking about whether any of their policies — whether related to an employee’s individual employment status or not — might be seen as discriminatory toward people who are lesbian, gay, bisexual, or transgender. I expect we’ll continue to see litigation surrounding policies that impact the LGBTQ+ community, both within the employment setting and elsewhere.”

The Supreme Court’s decision also left open the question of what the interplay is between Title VII and the Religious Freedom Restoration Act of 1993 and other protections for religious beliefs, adds Gotzler. “As a result,” he says, “we can expect to see future cases seeking to clarify the scope of this decision.”

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