In a landmark ruling and a tremendous step for LGBTQ rights in the workplace, the United States Supreme Court handed down its opinion in Bostock v. Clayton County, Georgia on June 15. The Court held that when Title VII prohibits sex discrimination in employment, the statute, on its face, prohibits discrimination on the basis of sexual orientation and gender identity, as well.

The majority opinion in the 6-3 decision was authored by Justice Gorsuch and focused heavily on the statutory language of Title VII. The Court’s reasoning finds its foundation in textual analysis of Title VII’s straightforward language. The decision’s first paragraph nearly says it all:

Sometimes small gestures can have unexpected consequences. Major initiatives practically guarantee them. In our time, few pieces of federal legislation rank in significance with the Civil Rights Act of 1964. There, in 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.

The Court went on to explain that, for the purposes of this argument, it used a limited, traditional dictionary definition of “sex” from the time of the statute’s drafting: “status as either male or female as determined by reproductive biology.” Notwithstanding the narrow definition, the Court held discrimination on the basis of sexual orientation and gender identity must be discrimination on the basis of sex because it is not possible to discriminate against someone for those characteristics without explicitly including his or her sex in the calculus.[1]

Bostock runs through a high-level analysis of Title VII’s causation standard, starting first by reiterating that the basic standard of causation under Title VII is “but for.” The Court takes pains to explain that “but for” does not mean “solely,” or even “primarily.” Rather, if sex is one basis for an employment decision, Title VII is violated, even if there are other bases. As the Court noted, the amendments to Title VII in the Civil Rights Act of 1991 further confirm this analysis by explicitly recognizing employer liability when sex (or race, color, religion, or national origin) is merely a “motivating factor” in the decision. When analyzing “but for” causation, sexual orientation and gender identity discrimination must necessarily be discrimination on the basis of sex:

Put differently, if changing the employee’s sex would have yielded a different choice by the employer—a statutory violation has occurred. Title VII’s message is “simple but momentous”: An individual employee’s sex is “not relevant to the selection, evaluation, or compensation of employees.” The statute’s message for our cases is equally simple and momentous: An individual’s homosexuality or transgender status is not relevant to employment decisions. That’s because it is impossible to discriminate against a person for being homosexual or transgender without discriminating against that individual based on sex.

Despite the plain language of Title VII, there has been significant disagreement about whether “sex” indeed covers sexual orientation and gender identity. Many states and localities have explicitly added sexual orientation and gender identity to their employment discrimination statutes to ensure coverage. Bostock extends that protection to LGBTQ workers on a federal level, and for that reason, it is, to use its own words, equally simple and momentous.

The majority opinion also addresses the argument that discriminating against both gay men and gay women cannot be sex discrimination because both sexes are equally affected. In so doing, the Court pens an analysis that is likely to be cited in other Title VII contexts as well. Specifically, the majority opinion explains that Title VII’s text prohibits discrimination against individuals, not against groups or classes. The Court notes an employer cannot defend a claim that it fired a woman for refusing sexual advances by arguing it generally treats women better than men; rather, the question is whether this particular woman was treated worse because she is a woman. As the opinion goes on to say, “Nor is it a defense for an employer to say it discriminates against both men and women because of sex. This statute works to protect individuals of both sexes from discrimination, and does so equally. So an employer who fires a woman, Hannah, because she is insufficiently feminine and also fires a man, Bob, for being insufficiently masculine may treat men and women as groups more or less equally. But in both cases the employer fires an individual in part because of sex. Instead of avoiding Title VII exposure, this employer doubles it.”

Beyond the fact that Bostock brings well-deserved protection to millions of workers, the opinion is notable for another reason: it is a 6-3 decision where two typically conservative justices joined with the Court’s more commonly liberal justices. The fact that Justice Gorsuch, a Trump appointee, is the author of the opinion will be surprising to many, but perhaps in a time of division, it is a sign of hope. Indeed, even in dissent, the Court’s newest conservative justice, Brett Kavanaugh, recognizes the enormity of the moment, saying, “Notwithstanding my concern about the Court’s transgression of the Constitution’s separation of powers, it is appropriate to acknowledge the important victory achieved today by gay and lesbian Americans. Millions of gay and lesbian Americans have worked hard for many decades to achieve equal treatment in fact and in law. They have exhibited extraordinary vision, tenacity, and grit—battling often steep odds in the legislative and judicial arenas, not to mention in their daily lives. They have advanced powerful policy arguments and can take pride in today’s result.”

Much will be written about Bostock in the days and years to come, including its potential legacy outside of Title VII. In Bostock,  the defendants argued Congress could not possibly have desired to protect gay and transgender employees in 1964. (Of course, as the opinion notes, the person who inserted sex into the statute in the first place likely never really intended to protect women, either.) The Court, while distinguishing textualism from intentionalism, reminds us that the rule of law should protect everyone:

To be sure, the  statute’s application in these cases reaches beyond the principal evil legislators may have intended or expected to address. But the fact that a statute has been applied in situations not expressly anticipated by Congress does not demonstrate ambiguity; instead, it simply demonstrates the breadth of a legislative command. But to refuse enforcement just because of that, because the parties before us happened to be unpopular at the time of the law’s passage, would not only require us to abandon our role as interpreters of statutes; it would tilt the scales of justice in favor of the strong or popular and neglect the promise that all persons are entitled to the benefit of the law’s terms.

It is so ordered.

[1]           The majority’s opinion holds open the possibility that for some employers, the Religious Freedom Restoration Act could offer a defense to a Title VII claim in this context but notes that such an issue does not appear in this case.

On March 18, 2020, the President signed the Families First Coronavirus Response Act (the “Act”) into law which, among other things, creates new paid leave rights for certain absences related to COVID-19: (1) emergency paid sick leave for certain absences related to COVID-19 and (2) partially paid FMLA leave for employees unable to work due to school closures, daycare closures, or unavailable paid childcare as a result of COVID-19. The Act applies to all employers with fewer than 500 employees, including nonprofits, and goes into effect on April 2, 2020. Regulations addressing aspects of the Act, such as possible exceptions and tax credits, are expected to be issued on an expedited basis. The following is a summary of leave-related provisions of the Act as of March 19, 2020.

Emergency Paid Sick Leave Act

What reasons qualify for emergency paid sick leave?
Emergency paid sick time must be provided to employees who cannot work (or telework) due to a need for leave because:

(1) The employee is subject to a federal, state, or local quarantine or isolation order related to COVID-19.
(2) The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID-19.
(3) The employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis.
(4) The employee is caring for an individual who is subject to an order as described in paragraph (1) or has been advised as described in paragraph (2). (Note, this individual need not be a family member.)
(5) The employee is caring for a son or daughter of such employee if the school or place of care of the son or daughter has been closed, or the child care provider of such son or daughter is unavailable, due to COVID-19 precautions.
(6) The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.

Which employees are eligible to take emergency paid sick leave?
All employees, regardless of when hired, are eligible. However, employers can exclude “health care providers,” as that term is defined in the Family and Medical Leave Act (“FMLA”), and “emergency responders.” The Term “emergency responders” is not defined by the Act or the FMLA but may be defined in the DOL’s forthcoming regulations.

How much emergency paid sick leave are employees entitled to?
Full-time employees are entitled to 80 hours of paid leave. Part-time employees are entitled to the number of hours the employee works, on average, over a 2-week period. If a part-time employee’s hours cannot be determined because the employee worked varying schedules, the employer must calculate the average hours scheduled per day (including hours not worked due to leave of any type) over the 6 month period preceding the emergency paid sick leave. If the employee did not work over this period, the applicable number of hours is determined by the employee’s reasonable expectation at the time of hiring of the average number of hours per day the employee would normally be scheduled to work. The Department of Labor has been ordered to issue further guidelines on calculating the amount of emergency paid sick leave within 15 days.

How much must employees be paid?
If the leave is because the employee is experiencing any of the circumstances listed above in items (1), (2), or (3), the employee must be paid the higher of their regular rate of pay or any applicable minimum wage required by law, subject to a daily cap of $511 and aggregate cap of $5,110. Thus, if an employer normally takes a tip credit, a tipped employee using emergency paid sick leave must be paid the higher minimum wage.

If the leave is for any of the reasons in items (4), (5), or (6), the employee must be paid two-thirds of the higher of their regular rate of pay or any applicable minimum wage required by law, subject to a daily cap of $200 and aggregate cap of $2,000.

Will small employers with fewer than 50 employees be treated differently?

At present, no. However, the Act allows the Department of Labor to issue regulations on an expedited basis that exempt small employers with fewer than 50 employees from the requirement of providing paid leave because an employee cannot work due to the closure of a son or daughter’s school or unavailability of child care if doing so would jeopardize the viability of the business as a going concern.

Does the Act provide tax credits for payments made pursuant to the Act?
Yes, the Act describes certain tax credits for payments made by employers for emergency paid sick leave under the Act. Consult your tax attorney or accountant.

Must employers notify employees about emergency paid sick leave?
Yes, employers must post a notice of rights. The Department of Labor has been ordered to provide a model notice within seven days.

Is there any waiting period before an employee can use emergency paid sick leave?
No, emergency paid sick leave is available immediately, regardless of how long the employee has been employed.

Can employers require that employees use any other paid leave before using emergency paid sick leave?
No.

May employers require employees search for or find a replacement to cover the hours when they are using emergency paid sick leave?
No.

Must employees give notice of their need to use emergency paid sick leave?
After the first day (or partial day) of absence, employers may require employees to follow reasonable notice procedures in order to continue to receive emergency paid sick leave.

Can employers require proof of the reason for the employee’s absence?
The Act does not specifically allow or prohibit requiring proof of an employee’s reason for leave.

When does an employee’s ability to use emergency paid sick leave end?
Emergency paid sick leave shall cease beginning with the employee’s next scheduled work-shift immediately following the end of the need for it.

Does the Act include anti-retaliation provisions?
Yes. The Act states employees are protected only if they (a) take emergency paid sick leave and (b) take actions to enforce the Act or are about to or do testify in an enforcement proceeding. While a literal reading would require an employee to take leave and file a complaint to be protected, employers are cautioned against terminating any employee for taking emergency paid sick leave.

Are employers required to pay employees for unused emergency sick leave upon termination of employment?
No.

Does emergency paid sick leave carry over from year to year?
No. The Act expires on December 31, 2020.

What are the consequences of not paying emergency paid sick leave?
Employers can be sued for back pay, an equivalent amount as “liquidated damages,” and attorney’s fees. Employers can also be assessed a civil penalty of up to $1,100 per violation.

Emergency FMLA for School Closures or Lack of Paid Childcare (EFMLA)

For what reason can employees take EFMLA?
EFMLA is available if an employee cannot work (or telework) due to a need to care for a son or daughter under 18 years of age because the child’s school or place of care has been closed or the paid child care provider is unavailable due to an emergency with respect to COVID-19 declared by a federal, state, or local authority.

Which employees are eligible?
Any employee who has been employed by the employer for at least 30 calendar days is eligible. This is different from the normal FMLA eligibility requirements of 12 months of employment and 1,250 hours worked during the preceding year.
Employers may elect to exclude “health care providers” and “emergency responders.” The Act also allows the Department of Labor to issue regulations on an expedited basis that would exclude “certain health care providers” and “emergency responders” from taking emergency FMLA. Presumably, “health care providers” has the meaning given under the FMLA. The term “emergency responders” is not defined by the Act or the FMLA but may be defined in the DOL’s forthcoming regulations.

Will small employers with fewer than 50 employees be treated differently?
At present, no. However, the Act allows the Department of Labor to issue regulations on an expedited basis that exempt small employers with fewer than 50 employees if requiring compliance would jeopardize the viability of the business as a going concern.

How much EFMLA is available?
Up to 12 weeks.

What portion of EFMLA must be paid?
An employer is not required to pay the first 10 days of EFMLA and cannot require the employee to use available paid time benefits during this initial period. By contrast, the employee has the right to substitute any accrued paid vacation, personal leave, or medical or sick leave, including the emergency paid sick leave described above, if the employee chooses.

How much does the employer have to pay the employee after the first 10 days?
Two-thirds of the employee’s regular rate of pay (as determined under the Fair Labor Standards Act) for the number of hours the employee would otherwise normally be scheduled to work, subject to a cap of $200 per day and $10,000 in the aggregate. If this number of hours cannot be determined because the employee worked varying schedules, the employer should calculate the average hours scheduled per day (including hours not worked due to leave of any type) over the 6 month period preceding the emergency FMLA leave. If the employee did not work over this period, the applicable number of hours is determined by the employee’s reasonable expectation atthe time of hiring of the average number of hours per day the employee would normally be scheduled to work.

Do an employee’s benefits continue while on emergency FMLA?
Yes, employee benefits continue to the same extent as required for other types of FMLA leave.

Does the Act provide tax credits for payments made pursuant to the Act?
Yes, the Act describes certain tax credits for payments made by employers for emergency paid sick leave under the Act. Consult your tax attorney or accountant.

Are employees entitled to reinstatement to the same or an equivalent job?
Generally, yes. The Act does not create a new reinstatement right but instead simply uses the existing reinstatement right created by the FMLA. Notably, the existing reinstatement right created by the FMLA generally does not require reinstatement if an employee’s position is eliminated during an FMLA leave and the employer can show the position would have been eliminated even if the employee had been at work. 29 C.F.R. § 825.216(a)(1).

Strangely, the Act appears to alter this rule only for employers with fewer than 25 employees. More specifically, the Act states reinstatement by an employer with fewer than 25 employees is not required if all of certain conditions are met (including the elimination of the position for reasons caused by a public health emergency during the leave and making attempts to reach the employee if an equivalent position becomes available within a year after the earlier of end of the employee’s 12 weeks of leave or the end of the qualifying need for leave).

What other protections apply to employees who take emergency FMLA leave?
Like other types of FMLA leaves, employees are protected from interference with their rights and retaliation for exercising protected rights. Small employers with fewer than 50 employees are shielded from certain types of damages in the event of lawsuits for such violations.

Can employers require certification of the need for leave?
The Act does not specifically allow or prohibit requiring certification.

Must employees provide notice of the need for emergency FMLA leave?
To the extent the need for leave is foreseeable, employees must give as much notice as is practicable.

Must employers notify employees about the availability of emergency FMLA leave?
The Act does not specifically address this question, but ordinarily the FMLA requires posting and, for most employers, a policy. In addition, the FMLA ordinarily requires that employers provide eligibility notice and other information following an employee’s request for leave. The DOL’s forthcoming notice may provide further guidance.

Does the Act include anti-retaliation provisions?
The Act amends the FMLA, which includes anti-retaliation provisions.

Tax Issues Relating to Both New Types of Paid Leave

We are not tax lawyers! Please consult your tax counsel regarding how to treat payments to employees under Section 7005(a) the Act which includes this statement:
Any wages required to be paid by reason of the Emergency Paid Sick Leave Act and the Emergency Family and Medical Leave Expansion Act shall not be considered wages for purposes of section 3111(a) of the Internal Revenue Code of 1986 or compensation for purposes of section 3221(a) of such Code.

Boulette Golden & Marin Partner and  Co-founder, Jason Boulette, was featured in a February 2020 Austin Business Journal Profile.  Giving the reader a perspective not found on LinkedIn, the Journal Profile seeks to illuminate the interests AROUND work that make business leaders like Jason so successful – in business AND in life.

Read the Full Article here: Austin attorney Jason Boulette opens up – Austin Business Journal