Wal­mart may soon find out if anti-gay dis­crim­i­na­tion is also sex dis­crim­i­na­tion

▶ ▶ Wal­mart’s health ben­e­fits pol­icy be­fore 2014 might be a form of sex dis­crim­i­na­tion ▶ ▶ “Any large em­ployer, they have to worry about their pub­lic im­age”

Bloomberg Businessweek (North America) - - News - �Josh Eidel­son

Is anti-gay dis­crim­i­na­tion a form of sex dis­crim­i­na­tion? Wal­mart Stores, the big­gest pri­vate em­ployer in the U.S., is the tar­get of a law­suit that might soon pro­vide an an­swer to that ques­tion.

Wal­mart didn’t ex­tend spousal health ben­e­fits to em­ploy­ees in same­sex mar­riages un­til Jan­uary 2014, even in states where same-sex mar­riage was le­gal. Be­fore then, when work­ers such as Jackie Cote ap­plied for cov­er­age for their same-sex spouses, Wal­mart re­jected their re­quests, as it has main­tained it had the right to do. Al­though the Supreme Court last year ruled that same-sex cou­ples have the right to marry, the Civil Rights Act of 1964 doesn’t men­tion sex­ual ori­en­ta­tion.

The act does pro­vide pro­tec­tion on the ba­sis of sex, and that’s a premise of the law­suit Cote filed last sum­mer on be­half of her­self and a class of plain­tiffs that lawyers now es­ti­mate to be 1,200 cur­rent and for­mer Wal­mart em­ploy­ees. Cote, who has worked at Wal­mart since 1999, mar­ried Diana Smith­son in Mas­sachusetts in 2004. In 2012, Smith­son, a breast can­cer sur­vivor, was di­ag­nosed with stage 3 ovar­ian can­cer. Within two years, with­out Wal­mart in­sur­ance to cover Smith­son’s treat­ment, the cou­ple racked up more than $150,000 in med­i­cal bills. “I thought that they would re­ally have no choice be­cause I was legally mar­ried in the state of Mas­sachusetts,” Cote says.

Seek­ing com­pen­sa­tion for the ben­e­fits that were de­nied and out- of-pocket med­i­cal ex­penses, the suit al­leges that Wal­mart’s stance was un­law­ful be­cause it’s a form of sex dis­crim­i­na­tion. “The sex of her spouse is the rea­son for treat­ing peo­ple dif­fer­ently— isn’t that dis­crim­i­na­tion based on sex?” asks at­tor­ney Gary Buseck, le­gal di­rec­tor for Gay & Les­bian Ad­vo­cates & De­fend­ers, one of the ad­vo­cacy groups rep­re­sent­ing Cote.

The case, among a re­cent wave of law­suits over the past sev­eral years to grap­ple with this ques­tion, is headed to me­di­a­tion on Feb. 22; if a set­tle­ment isn’t reached, it’s sched­uled for trial in fed­eral court in Mas­sachusetts in Novem­ber. Le­gal ex­perts, civil rights ad­vo­cates spe­cial­iz­ing in anti- gay and gen­der-iden­tity bias, and em­ploy­ment lawyers who de­fend large com­pa­nies say what­ever the out­come, the case against Wal­mart could help set a prece­dent by ex­pand­ing the def­i­ni­tion of sex dis­crim­i­na­tion. That might lead other em­ploy­ers to re­con­sider the risks of dis­crim­i­nat­ing on the ba­sis of sex­ual ori­en­ta­tion. The ar­gu­ment that sex­ual-ori­en­ta­tion dis­crim­i­na­tion is a form of sex dis­crim­i­na­tion can ap­ply to other types of work­place bias as well, such as em­ploy­ees al­leg­ing they were fired or de­nied pro­mo­tions for be­ing gay.

“Be­ing gay or les­bian or bi­sex­ual in­her­ently vi­o­lates the gen­der stereo­type that men and women should be at­tracted to peo­ple of the op­po­site sex,” says Equal Em­ploy­ment Op­por­tu­nity Com­mis­sion mem­ber Chai Feld­blum, a for­mer Ge­orge­town law pro­fes­sor. Last year the EEOC con­cluded that anti-gay dis­crim­i­na­tion is in­her­ently a form of sex dis­crim­i­na­tion.

Judges don’t have to de­fer to the EEOC, but they’ve proved in­creas­ingly re­cep­tive to gay plain­tiffs’ sex dis­crim­i­na­tion ar­gu­ments, al­low­ing cases to pro­ceed against BNSF Rail­way, Sky­west Air­lines, and Pep­per­dine Univer­sity. “We’re see­ing an

evo­lu­tion in ju­di­cial thought and ju­di­cial ac­cep­tance of this ar­gu­ment,” says Steven Su­flas, a part­ner at the law firm Bal­lard Spahr, who rep­re­sents man­age­ment in la­bor and em­ploy­ment mat­ters. “The chance of pre­vail­ing un­der this sex­ual stereo­type the­ory, those per­cent­ages are in­creas­ing.”

Wal­mart de­nies wrong­do­ing and op­poses class-ac­tion cer­ti­fi­ca­tion (the two sides are slated to present briefs on the class ques­tion this sum­mer) but hasn’t ruled out a res­o­lu­tion. “Be­fore the law­suit was filed, we at­tempted to re­solve it, and we’ve said we re­main open to fur­ther dis­cus­sions,” says Randy Har­grove, Wal­mart’s di­rec­tor of na­tional me­dia re­la­tions. He de­clined to elab­o­rate on the com­pany’s le­gal strat­egy.

If the com­pany con­tin­ues de­fend­ing its old pol­icy, that could carry sig­nif­i­cant rep­u­ta­tional risks. Wal­mart boasts a 90 per­cent rat­ing on the Cor­po­rate Equal­ity In­dex com­piled by the LGBT non­profit Hu­man Rights Cam­paign. Last year it drew friendly me­dia at­ten­tion for join­ing LGBT ac­tivists in op­pos­ing a religious lib­erty bill in its home state of Arkansas that would have shielded busi­nesses dis­crim­i­nat­ing against LGBT cus­tomers. Wal­mart didn’t move to dis­miss the Cote case af­ter it was filed in July; ef­forts to set­tle the dis­pute through the EEOC be­fore Cote sued were un­suc­cess­ful.

In 2014, when a for­mer Saks Fifth Av­enue em­ployee filed a law­suit al­leg­ing she was ha­rassed and dis­crim­i­nated against for be­ing trans­gen­der, Saks’s lawyer asked for the case to be dis­missed be­cause “trans­sex­u­als are not a pro­tected class” un­der the Civil Rights Act. That fil­ing, which might have drawn lit­tle at­ten­tion a decade ear­lier, spurred push­back from ad­vo­cacy groups and harsh me­dia at­ten­tion. Within three months, Saks set­tled. The com­pany de­clined to com­ment.

“Any large em­ployer, they have to worry about their pub­lic im­age,” Su­flas says. “Do you want your con­sumer base to think that you are not a good cor­po­rate ci­ti­zen?”

Last July a group of LGBT and la­bor groups urged Wal­mart in an open let­ter to set­tle the case rather than ar­gue in court that anti-lgbt bias is le­gal. Wal­mart could send a pow­er­ful mes­sage to em­ploy­ers by set­tling, says Emily Martin, gen­eral coun­sel of the Na­tional Women’s Law Cen­ter.

“It would be re­ally mean­ing­ful if Wal­mart chose to re­solve the case and rec­og­nize that un­der Ti­tle VII [of the Civil Rights Act], it was bound to pro­vide th­ese ben­e­fits,” Martin says. “When you have a ma­jor cor­po­rate player like Wal­mart ei­ther im­plic­itly or ex­plic­itly rec­og­niz­ing this is what the law re­quired it to do, other em­ploy­ers take no­tice.”

If Cote’s ap­proach is suc­cess­ful, other plain­tiffs could be em­bold­ened to come for­ward and file sim­i­lar claims—help­ing ad­vo­cates fur­ther de­velop the law and more clearly de­fine Ti­tle VII’S pro­tec­tions.

Some ad­vo­cates see an up­side if Wal­mart holds out for a trial. “This is a com­pelling case that could make its way through the fed­eral courts to the Supreme Court and make good law that ap­plies na­tion­wide,” says Tico Almeida, founder of the LGBT ad­vo­cacy non­profit Free­dom to Work. Be­cause the facts of the case are rel­a­tively clearcut, Cote’s case could of­fer LGBT ad­vo­cates a chance to set a prece­dent on the scope of sex dis­crim­i­na­tion. “I think the courts have reached the point where they are more and more ready to ac­cept what has al­ways been straight­for­wardly true,” says Cote’s at­tor­ney, Buseck. “I do think ul­ti­mately this is where the Supreme Court will end up.”

Cote has promised to keep up the fight. “Un­for­tu­nately my wife doesn’t have much time left on earth. … She wants the peo­ple that tried to save her life and tried to ex­tend her life to be paid,” she says.

With the law un­set­tled, de­fense lawyers are urg­ing cau­tion. “If an em­ployer comes to us and asks, ‘Is there a risk that I could be sued un­der the the­ory that Ti­tle VII ex­tends to LGBT in­di­vid­u­als?’ I think the an­swer is yes,” says Cameron Smith, a la­bor and em­ploy­ment part­ner at Sey­farth Shaw. “This is ab­so­lutely go­ing to be a hotly lit­i­gated is­sue, and it’s go­ing to play up through the courts. And if that means that em­ploy­ers and em­ploy­ees get greater clar­ity about what the law pro­vides, that to me seems like a wel­come de­vel­op­ment.”

The bot­tom line A the­ory that sex­ual-ori­en­ta­tion dis­crim­i­na­tion is a form of sex dis­crim­i­na­tion will be tested in a case against Wal­mart.

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