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EEOC Enters First Settlement in Sexual Orientation Case


The Equal Employment Opportunity Commission (EEOC) will require an employer to provide extensive training to resolve one of the first two cases it has ever filed alleging that discrimination based on sexual orientation violates Title VII of the Civil Rights Act of 1964. 

Pallet Cos., doing business as IFCO Systems—which entered a consent decree on June 23 with the EEOC—will hire a subject matter expert on sexual orientation, gender identity and transgender training to develop a training module on sexual orientation and sexual identity issues in the workplace. The EEOC intends to use this training module in future settlements. 

Requiring training on sexual orientation when there were no classwide allegations of harassment based on sexual orientation is an aggressive step.   This step probably reflects the EEOC’s view that sexual orientation harassment and discrimination was widespread within the company. 

The employer agreed not to continue to defend the case in court when it could have sought to challenge the EEOC’s expanded interpretation of Title VII.  I can only surmise that the employer chose to settle this case because the facts alleged in the complaint put the employer in a highly unfavorable light and could have potentially alienated many jurors, as well as the public. 

The LGBT training will be presented as part of an hourlong equal employment opportunity and harassment session to the company’s general manager, vice president of operations, regional operations directors, plant managers, assistant plant managers, HR directors and HR regional field operations managers nationwide. LGBT training will be provided to all employees in the company’s north region in Baltimore; Barrington, N.J.; Martinsburg, Va.; Scarborough, Maine; Suffolk, Va.; and Wilmington, Mass.


The Sexual Orientation Claim: 

The EEOC sued under Title VII on behalf of Yolanda Boone, a forklift operator at IFCO’s Baltimore facility. After Boone, who is a lesbian, started working night shift hours, the night shift manager allegedly began harassing her on a weekly basis, making comments such as “I want to turn you back into a woman,” “I want you to like men again,” “You would look good in a dress,” “Are you a girl or a man?” and “You don’t have any breasts.” He quoted biblical passages stating that a man should be with a woman and not a woman with a woman. On several occasions, he would grab his crotch while staring at Boone.

After weeks of enduring the manager’s comments and behavior, Boone complained to a supervisor. Nothing was done, and the harassment purportedly continued. She complained to the general manager and HR following more harassment. On her next scheduled workday, she was discharged.

The EEOC claimed sex discrimination based on sexual orientation earlier this year.

In addition to the training, the settlement includes payment of $182,200 to Boone and a total of $20,000 to the Human Rights Campaign, an advocacy group for the LGBT community.

Developing Law

This settlement indicates that the EEOC is taking an aggressive stance in broadening the judicial interpretation of discrimination because of sex to prohibit discrimination on the basis of sexual orientation.  The courts will most likely be receptive to this interpretation, but only if the alleged discrimination can be tied to sexual stereotyping in the workplace. 

In the Supreme Court case of Price Waterhouse v. Hopkins, 490 U.S. 228 (1989), that a female employee had been discriminated against on the basis of her sex when she was denied promotion to partnership. Some partners had preconceived notions, based on sexual stereotyping, that she should conduct herself in accordance with outdated views of how a woman should act.

After the Supreme Court’s ruling, courts became receptive to sexual stereotyping claims, even where they remained skeptical about sexual orientation claims.  Courts have long recognized that discrimination against lesbian, gay and bisexual employees often includes sex-based harassment and evaluations about how people look and behave.  In one recent case, a female hotel employee was told she was not a ‘good fit’ for the front desk because she had what her supervisor characterized as ‘an Ellen DeGeneres kind of look.’ Circuit courts routinely find that this kind of discrimination against gay people is actionable, even where the same courts have wrongly concluded that federal law does not prohibit sexual orientation discrimination in all its forms. 

Courts are becoming more receptive to sexual orientation claims under Title VII, more 
This is particularly true at the district court level. For example, the U.S. District Court for the Southern District of New York said in a March 9 decision that in light of the EEOC’s stance on Title VII’s scope “and the demonstrated impracticality of considering sexual orientation discrimination as categorically different from sexual stereotyping, one might reasonably ask—and, lest there be any doubt, this court is asking—whether that line should be erased” (Christiansen v. Omnicom Group Inc., 2016 WL 951581). 

The number of district courts recognizing sexual orientation discrimination as sex discrimination is increasing.   The appeals courts haven’t yet adopted the EEOC’s stance that Title VII prohibits discrimination based on sexual orientation as part of its prohibition on sex discrimination.  That may soon change however. 

The 2nd, 7th and 11th all currently have cases pending that present an opportunity to revisit and correct outdated and unworkable interpretations of the scope of Title VII’s protections.  More updates to follow!