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Jun 30, 2020

Boards urged to review policies after LGBTQ ruling

Supreme Court bars employment discrimination on the basis of sexual orientation and gender identity

Boards of directors have been advised to ensure their company’s anti-discrimination policies are checked following a recent US Supreme Court ruling. 

The court ruled earlier this month in a landmark decision that Title VII of the Civil Rights Act of 1964, which prohibits employment discrimination based on sex, applies to both sexual orientation and gender identity. Roughly 20 states already had such protections of LGBTQ people written into law, but the 6-3 decision extends those protections to the federal level. Sexual orientation or transgender-based discrimination is now barred across the US, regardless of individual states’ laws. 

Ryan Bates, partner with Hunton Andrews Kurth, tells Corporate Secretary that boards should ensure policies are reviewed and updated to reflect the decision. For example, employee handbooks stating that the company does not tolerate discrimination based on race, color, religion, sex or national origin should also explicitly include sexual orientation and gender identity, he says. Boards should also make sure training at the management and employee level includes relevant provisions, he adds.

General counsel should take the lead in this review process, guiding human resources teams on implementing it, Bates advises. If a company has not revised its anti-discrimination policy in years then now is a good time to check that it is in line with both the Supreme Court decision and state and local laws following a ‘tidal wave of changes’ at those levels, he says.

Bates notes that in most cases problems can arise for companies – particularly small and mid-sized issuers – because handbooks are out of date or have not been reviewed by counsel to ensure they are comprehensive. He adds that many companies do not yet specifically mention sexual orientation and gender identity in their materials.

Justice Neil Gorsuch wrote in the opinion: ‘[I]n Title VII, Congress outlawed discrimination in the workplace on the basis of race, color, religion, sex or national origin. Today, we must decide whether an employer can fire someone simply for being homosexual or transgender. The answer is clear. An employer who fires an individual for being homosexual or transgender fires that person for traits or actions it would not have questioned in members of a different sex. Sex plays a necessary and undisguisable role in the decision, exactly what Title VII forbids.’