Small businesses are bracing for costly new legal battles born of this month’s Supreme Court ruling that expands workplace sex discrimination claims to include lesbian, gay and transgender employees.
The decision threatens to hit some small businesses with litigation in an area that they haven’t had to deal with until now.
Most big corporations — several of which backed the LGBT employees in the legal battle at the high court — already have LGBT protections cemented in contracts since they typically operate in multiple states. Nearly two dozen states, the District of Columbia, Guam and Puerto Rico already have laws on the books that prohibit sexual orientation and gender identity discrimination in the workplace.
Major companies such as Amazon, AT&T, Bank of America, American Airlines, American Express, CVS and Coca-Cola filed a brief with the high court ahead of the opinion arguing on behalf of the employees.
“When workplaces are free from discrimination against LGBT employees, everyone can do their best work, with substantial benefits for both employers and employees,” they argued.
Robert Tuttle, a law professor at George Washington University, said it is likely the big national companies would face a public relations problem if they hadn’t lobbied on behalf of the LGBT employees.
“The market pressure that would be placed on them would be enormous,” he said. “I would have been surprised to see too many employers with recognizable names line up in support of the government policy,” Mr. Tuttle said.
Ilya Shapiro, director of the Cato Institute’s Center for Constitutional Studies, said large companies aren’t concerned about increasing litigation.
“One more regulation is just the cost of doing business,” he said.
National companies have large human resources departments, compliance policies and budget lines for the associated costs. But the small businesses in states where gay, lesbian or transgender employees weren’t previously protected might not be ready for lawsuits from prospective LGBT workers who don’t get hired and claim discrimination.
The landmark legal battle that rewrote Title VII of the Civil Rights Act of 1964, which previously limited sex discrimination to matters of biological sex, involved a trio of lawsuits.
One was brought by a county employee in Georgia, Gerald Bostock, who was fired after he began playing in a gay softball league. Donald Zarda, a skydiving instructor, also brought suit in New York after he was fired from his job for mentioning he was gay. Likewise, Aimee Stephens was fired from a funeral home in Michigan after she decided to begin presenting herself as a woman instead of as a man, as she had when she was hired.
Zarda died in 2014 in a wingsuit accident, and Stephens recently succumbed to kidney failure. But their families continued to defend their cases through the courts ahead of this month’s ruling.
The decision is viewed as a major victory for more than 8 million LGBT employees in the U.S.
LGBT workers had been protected during the Obama administration, which had the Equal Employment Opportunity Commission interpreting civil rights laws to include discrimination against gay, lesbian, and transgender people in the workplace.
The Trump administration reversed course to strictly follow Title VII.
Conservatives have argued Congress, not the courts, should change the law. But efforts by lawmakers to expand the federal workplace protections for LGBT workers have failed.
The high court ruling, though, left several unanswered questions about how it could affect other legal conflicts moving through the courts.
Justice Samuel A. Alito Jr. disagreed with the decision, writing in a dissent that the majority of the court overlooked how the pro-LGBT civil rights ruling could affect legal battles over locker room and bathroom policies, health care benefits, housing rules and women’s sports.
Just one week after the decision was issued, the LGBT advocacy legal organization Lambda Legal filed a lawsuit against the Department of Health and Human Services for a proposed rule that would overturn the Affordable Care Act’s requirement that healthcare providers and insurance companies not discriminate against LGBT patients who are making medical decisions, such as gender-affirming care.
Josh Blackman, a professor at South Texas College of Law, said the high court’s decision will open a floodgate of lawsuits against federal laws and administration policies.
“The Affordable Care Act prohibits ‘sex’ discrimination. Religious hospitals will now be required to perform certain procedures for transgender patients. In addition, various challenges to sex-separated athletics and sex-separated bathroom policies will now proceed,” he said.
