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Supreme Court Affirms LGBTQ+ Workplace Rights

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In a 6-3 decision this week, the U.S. Supreme Court ruled that federal anti-discrimination laws cover LGBTQ+ people and that they cannot be legally fired for their sexual orientation and gender identity, ensuring protection under Title VII of the Civil Rights Act of 1964. Justice Neil Gorsuch wrote in the majority opinion that, “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.”

The decision was based on two separate cases brought before the Court. In 2013, Aimee Stephens was fired from her job as a funeral home director when she revealed her gender identity to her colleagues. Her former boss testified that he had fired Stephens based on the fact that she was “no longer going to represent himself as a man.” The case was the first before the Supreme Court regarding transgender rights. The second case was that of Gerald Bostock and Donald Zarda, who claimed that they were fired from their jobs as a child welfare services coordinator and a skydiving instructor, respectively, for being gay. Both Stephens and Zarda passed away before seeing their cases decided by the Supreme Court.

According to an April 2020 report from UCLA School of Law’s Williams Institute, 8.1 million LGBT workers age 16 and older live in the United States, and before the Court’s ruling, 3.9 million lived in the 28 states where it was legal to fire someone based on their sexual orientation or gender identity. In 2019, the U.S. Equal Employment Opportunity Commission (EEOC) brought more than 1,800 charges of LGBT-based workplace sex discrimination. Additionally, a 2017 survey showed that 20% of LGBTQ Americans reported facing discrimination when applying for a job, and 22% were not paid equally or promoted at the same rate as their colleagues who were heterosexual and cisgender. Advocacy organization Out Leadership also reported that, in 2020, “less than 0.3% of Fortune 500 board directors” were openly LGBTQ+.

These factors contribute to workplaces where LGBTQ+ workers do not feel comfortable being themselves, and are more likely to leave, according to Human Rights Campaign (HRC). A 2019 HRC report noted that 46% of LGBTQ+ workers had hidden their sexual preference and/or gender identity at work, and 10% had left jobs because their workplace did not accept LGBTQ+ people.

In the article “The Benefits of Diversity & Inclusion Initiatives,” Risk Management reported that encouraging diversity and inclusion helps all workers and their organizations. Allowing employees to bring their whole selves to the task can be beneficial. As the articled noted, “Often, the outsider believes he or she must bend to the norms of this dominant culture. When this occurs, it mutes creative friction—or creative abrasion, as it is also called—wherein ideas can be challenged productively.” D&I initiatives can encourage employees to more freely innovate and collaborate, can help boost worker retention, and may help minimize the risk of discrimination lawsuits.

But these programs may not be enough to create a working environment that is free of bias and discrimination. Even when companies “fostered an inclusive workplace,” 64% of employees in a 2019 Deloitte survey said that they had experienced or witnessed workplace bias in the past year, and over 50% of LGBT respondents experienced bias at least once a month. Employers can work to address the specific concerns of their LGBT+ workers, including allowing transgender employees to use bathrooms that correspond to their gender identity, regularly updating and reassessing company policies and requiring all employees to review them, and making clear that any form of workplace discrimination is unacceptable and will incur consequences.

Some legal experts worry that workplace discrimination will still take place under the guise of other factors like performance, noting that discrimination based on sexual preference and gender identity is very difficult to prove. The Supreme Court’s decision also left open the possibility that employers could still use a religious exemption to discriminate against LGBTQ+ workers. However, the decision is a critical step forward for LGBTQ+ civil rights and an important moment for workplace diversity and inclusion.

The Business Impact of the Supreme Court’s Travel Ban Decision

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In one of its most anticipated cases in decades, the U.

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S. Supreme Court on June 26 upheld President Trump’s latest “travel ban,” delivering a key win to the Trump administration and one of its strict immigration enforcement stances. The Court concluded the president’s executive order—which largely targeted individuals from predominately Muslim countries—did not violate the Constitution’s Establishment Clause by favoring one religion over another, ruling that the order was a lawful exercise of the authority granted to the president by Congress.

The Supreme Court’s action now permits immediate enforcement of one of the president’s signature immigration policies that began in January 2017 and included repeated trips to the federal judiciary. Employers with workers from the affected countries—Iran, Libya, Syria, Yemen, Somalia, North Korea and Venezuela—now need to ensure proper protocols are put into place to spare employees from unnecessary risk and to preserve smooth business operations.

Given that the travel ban can be enforced immediately, employers should:

  • Identify employees who are nationals of banned countries. The effect of the ban differs between the seven countries, so consult immigration counsel to be sure you understand how the ban applies to the country of origin for your employees.
  • Instruct any affected employees who are abroad and have not previously been affected by the prior travel bans to return immediately.
  • Caution workers from the affected countries not to travel outside the United States.
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    While the underlying litigation surrounding the travel ban will continue in the lower courts, assume the ban will be in effect for the foreseeable future.

  • Tell foreign national employees to carry originals or clear copies of legal authorization to be in the U.
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    S. at all times and to consult with an immigration attorney before signing any paperwork presented by the Department of Homeland Security or the Department of State.

  • Instruct employees to cooperate and present evidence of their U.S. immigration documentation and legal status if they are stopped by an Immigration and Customs Enforcement agent.
  • Advise employees that if their temporary work visas are expiring, they should take immediate steps to extend those visas.
  • Consider whether to sponsor employees who are here on soon-to-expire temporary work visas for permanent residency, if they are eligible.

Supreme Court Upholds Health Care Law

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In one of the most closely-watched decisions in recent years, the Supreme Court upheld the Affordable Care Act, including the controversial individual mandate requiring most Americans to purchase health insurance or face a financial penalty. SCOTUS Blog posted a succinct one paragraph summary of the decision:

The Affordable Care Act, including its individual mandate that virtually all Americans buy health insurance, is constitutional. There were not five votes to uphold it on the ground that Congress could use its power to regulate commerce between the states to require everyone to buy health insurance. However, five Justices agreed that the penalty that someone must pay if he refuses to buy insurance is a kind of tax that Congress can impose using its taxing power. That is all that matters. Because the mandate survives, the Court did not need to decide what other parts of the statute were constitutional, except for a provision that required states to comply with new eligibility requirements for Medicaid or risk losing their funding. On that question, the Court held that the provision is constitutional as long as states would only lose new funds if they didn’t comply with the new requirements, rather than all of their funding.

The 5-4 decision was seen as a victory for the Obama Administration and will certainly become a key issue in the upcoming November election as Mitt Romney has already vowed to repeal the law should he win the presidency. In fact, this division was likely anticipated by Chief Justice John Roberts in his majority opinion:

We do not consider whether the Act embodies sound policies. That judgment is entrusted to the Nation’s elected leaders. We ask only whether Congress has the power under the Constitution to enact the challenged provisions.

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Roberts did conclude, however, with regard to the constitutionality of the individual mandate:

The Affordable Care Act is constitutional in part and unconstitutional in part. The individual mandate cannot be upheld as an exercise of Congress’s power under the Commerce Clause. That Clause authorizes Congress to regulate interstate commerce, not to order individuals to engage it. In this case, however, it is reasonable to construe what Congress has done as increasing taxes on those who have a certain amount of income, but choose to go without health insurance.

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Such legislation is within Congress’s power to tax.

Regardless of its ultimate fate, the Affordable Care Act stands, much to the benefit of the some 30 million Americans without health insurance.

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To illustrate where these uninsured are concentrated, the Atlantic offered the following map.

 

The Supreme Court’s Sarbanes-Oxley Ruling in Plain English

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If you’re like me, you’re not that smart. And when you read complicated articles like this New York Times breakdown of Monday’s Supreme Court decision involving Sarbanes-Oxley, your head starts to hurt a little. Wait? What exactly happened? Will this change anything for companies?

Fortunately, Anand Rao, partner at Diamond Management & Technology Consultants, is an expert in the history of and the controversy surrounding Sarbanes-Oxley and can clearly explain exactly what you need to know about the Supreme Court’s ruling.

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Jared: What was the main controversy about Sarbanes-Oxley that the Supreme Court was ruling on?

Rao: Sarbanes-Oxley was passed in 2002 as a response to some of the accounting issues related to Enron and Worldcom. The law created the Public Company Accounting Oversight Board (PCAOB) to regulate the accounting industry. The five board members were accounting specialists appointed by the Securities and Exchange Commission. The SEC could remove board members if there was a good cause to do so.

Free Enterprise Fund, a nonprofit advocacy group, along with a small Nevada accounting firm Beckstead and Watts challenged the creation of the PCAOB in Sarbanes Oxley, specifying that the removal of board members by the commission for just cause contravened the separation of powers in the U.S. Constitution as it gave wide-ranging executive power to board members without subjecting them to presidential control.

Jared: Why did the Court rule against this structural set-up?

Rao: With a 5-4 majority ruling, the Supreme Court declared that the act “not only protects Board members from removal except for good cause, but withdraws from the President any decision on whether that good cause exists.” It claimed that “by granting the Board executive power without the Executive’s oversight, this Act subverts the President’s ability to ensure that the laws are faithfully executed.” To remedy this situation the Supreme Court has ruled that the SEC now may remove the Board members at will, without the need to demonstrate a good cause.

However, the Supreme Court made it very clear that this had no bearing on the remaining aspects of the Sarbanes Oxley Act by stating that the “unconstitutional tenure provisions are severable from the remainder of the statue.” So for all practical purposes, there will be no change to the way PCAOB operates.

Jared: Will the change have any effect on companies? How about risk and compliance employees? Insurance companies?

Rao: Although the Supreme Court ruling impacts how board members may be removed, it has no impact on what public companies need to do. All public companies will continue to be subject to the same requirements as before under the Sarbanes Oxley Act and there will be no change to the operational functioning of the public companies. Similarly, there will be no impact to risk and compliance employees or insurance companies – it’s just a re-validation that the act is here to stay.