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Fifth Circuit Holds Title VII Does Not Protect Against Sexual Orientation or Transgender Status

Published by and on April 16, 2019

Fifth Circuit widens circuit split on controversial issue of Title VII protection against sexual orientation and transgender status.

In its recent decision in Whittmer v. Phillips 66 Co., the Fifth Circuit, which covers Texas, Louisiana, and Mississippi, overturned the Southern District of Texas, in holding Title VII does not protect sexual orientation or transgender status from employment discrimination.

In Wittmer, the plaintiff was a transgender woman who received a job offer as an Instrument and Reliability Engineer after interviewing with the company. Phillips 66 then offered the plaintiff a job contingent on passing a background check. The background check revealed a certain discrepancy, the importance of which was contested by the parties. In any event, Phillips 66 rescinded the offer and the plaintiff alleged discrimination based on her transgender status, which Phillips 66 executives denied knowledge of prior to their decision to rescind the offer.

In contrast to the Second, Sixth, and Seventh Circuits, and the Obama DOJ, that have opined otherwise, the Fifth Circuit, along with the Trump DOJ, determined that Title VII of the Civil Rights Act of 1964 does not prohibit employers from discriminating on the basis of either sexual orientation or transgender status. In doing so, the Fifth Circuit overturned the Southern District of Texas’s determination that Title VII did protect against such discrimination. This was not, however, an issue of first impression for the circuit, according to the Court of Appeals.

The Court of Appeals cited to the case of Blum v. Gulf Oil Corp., a 1979 case in which the Court of Appeals held that Title VII does not prohibit sexual orientation discrimination. The Court of Appeals noted that Blum applies the same analysis to transgender status and sexual orientation and still remains binding precedent. The Court of Appeals also held that the plaintiff’s claims failed to satisfy the prima facie case under the McDonnell Douglas framework and did not present a factual dispute that the reason offered by Phillips 66, that she made misrepresentations later discovered in the background check, was the actual reason for rescinding the job offer, was actually pretext for discrimination.

Welter Insight

Despite the uncertainty in federal and state law regarding sexual orientation and gender identity discrimination, employers must comply with the laws in the place where they do business and where their employees are located. This includes all state and local laws regarding sexual orientation discrimination in the workplace. Employers should be aware that issues related to sexual orientation discrimination may implicate issues of gender discrimination, which is explicitly prohibited under Title VII and many state laws, and employers should adapt workplace anti-harassment and anti-discrimination policies accordingly. It is advisable to seek counsel if you are unsure about your compliance obligations under applicable federal, state, and local laws regarding sexual orientation and gender identity.

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