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State and Local Laws Against Sexual Orientation and/or Gender Identity Discrimination – Is My Business Covered?

By Katharine Sangha

An estimated nine million people in the United States identify as lesbian, gay, bisexual, or transgender, and many of these individuals are in the workforce.  Despite Americans’ growing acceptance and support for LGBT rights, many LGBT individuals risk facing discrimination in the workplace.  Title VII of the Civil Rights Act of 1964, which protects employees from discrimination based on sex, race, color, national origin, and religion, does not explicitly protect employees from discrimination based on sexual orientation or gender identity.  The United States Equal Employment Opportunity Commission, however, has advanced the position that Title VII’s prohibitions on employment discrimination encompass sexual orientation and gender identity discrimination (and has instituted multiple lawsuits targeting LGBT discrimination pursuant to a strategic enforcement plan).

Although the status of employment discrimination protections for LGBT individuals is not settled under federal law, employers should be aware of the many state laws and local ordinances that do explicitly protect LGBT individuals from employment discrimination.  In many cases, these state laws and local ordinances apply to a greater number of employers than Title VII, which applies to employers with fifteen or more employees.  For example, the California Fair Employment and Housing Act protects California employees from discrimination based on sexual orientation and gender identity and applies to employers with five or more employees in the state.  

Over 200 cities and counties prohibit discrimination based on sexual orientation and/or gender identity in private employment. These local ordinances provide protection to employees, even in states that have traditionally been hostile to LGBT individual rights.  For example, in Texas, where the state legislature recently considered over 20 bills that would have curtailed LGBT rights in some fashion (none of which were actually passed), the cities of Austin, Dallas, Fort Worth, Houston, and Plano have passed ordinances protecting employees from discrimination based on sexual orientation and gender identity.  These city ordinances protect approximately 21% of the Texas population.  Although employees generally cannot institute lawsuits against employers based on violations of local ordinances, an employer can be subject to fines and even jail time for such violations.   

Even though federal law does not explicitly prohibit sexual orientation and gender identity discrimination in employment, employers should be cognizant of the state laws and local ordinances that apply to them.  Employers may consider adding “gender identity” and “sexual orientation” as protected categories in employee handbooks and other employment policies to ensure compliance with any applicable state and local law.