SEXUAL ORIENTATION DISCRIMINATION IN THE WORKPLACE: A LEGAL REFERENCE GUIDE*

CONTENTS

I. Sexual Stereotyping

A. The Use of Sexual Stereotypes B. Sexual Stereotyping and Sexual
Orientation II. Domestic Partnership Benefits

A. Legal Recognition of Domestic Partnerships B. Developments in the Law
Regarding Domestic Partner

Benefits C. Creating A Domestic Partner Benefits Plan III. Employment
Discrimination Based on Sexual Orientation

A. Introduction ------------National Journal of Sexual Orientation Law, Vol.
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B. Federal Law C. State, County and Municipal Laws D. Remedies Under Other
Legal Theories E. Public Employees: Constitutional Standards F. Public
Employees: Government Interests IV. Sexual Orientation Harassment

A. Overview B. Harassment of Men and Women is Prohibited C. Same-Sex
Harassment D. Same-Sex Harassment: Quid Pro Quo Cases E. Same-Sex
Harassment: Hostile Work Environment F. Same Sex Harassment: Hostility Based
on Sexual

Orientation Does not Create Environmental Harassment Claim

G. Harassment of Both Sexes H. Local Laws Prohibiting Sexual Orientation

Harassment V. Domestic Partnership Benefits: Samples Policies and

Related Information

*Robert B. Mison (San Francisco), Steefel, Levitt & Weiss and Walter
Cochran-Bond (Los Angeles), Bettina B. Plevan (New York) and Paul Salvatore
(New York), Proskauer Rose Goetz & Mendelsohn.

This Outline contains updated excerpts from Avoiding and Defending Against
Claims of Gender and Sexual Orientation Discrimination in the Workplace
originally presented by Proskauer Rose Goetz & Mendelsohn on October 6, 1993
at its annual Law and the Workplace seminar and is reprinted here with
permission.

I. Sexual Stereotyping

The use of stereotypical assumptions about men and/or women in employment
decisions is a form of gender discrimination prohibited by law. Recent case
law has addressed the issue in the context of professional organizations,
frequently regarding promotion decisions.

A. The Use of Sexual Stereotypes

1. In 1989, the Supreme Court ruled that dis-

crimination on the basis of sex stereotyping violates Title VII. Price
Waterhouse v. Hopkins, 490 U.S. 228 (1989). Hopkins, a senior manager at an
accounting firm, was denied consideration for partnership because she was
not deemed "feminine" enough by the partners who were evaluating her. The
evaluation committee solicited evaluations from the entire partnership.
Among the subjective evaluations were comments describing Hopkins as
"macho," and "overcompensating for being a woman," and suggesting that she
take "a course in charm school" and "walk more femininely, talk more
femininely, dress more femininely, wear make-up,

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have her hair styled and wear jewelry." Id. at 235. The U.S. Supreme Court
held that the consideration of these comments in the evaluation process was
impermissible sex discrimination:

An employer who objects to aggressiveness in women but whose positions
require this trait places women in an intolerable and impermissible Catch
22: out of a job if they behave aggressively and out of a job if they do
not. Title VII lifts women out of this bind.

Id. at 251.

The district court on remand awarded Hopkins admission to partnership,
backpay in the amount of

$371,000.00 and attorney's fees. Hopkins v. Price Waterhouse, 737 F. Supp.
1202 (D.D.C.), aff'd, 920 F.2d 967 (D.C. Cir. 1990).

1. Ezold v. Wolf, Block, Schorr and Solis-Cohen,

751 F. Supp. 1175 (E.D. Pa. 1990), rev'd, 983 F.2d 509 (3d Cir. 1992): At
the District Court level, the court held that a law firm denied a female
associate partnership while it granted partnership to a number of less
qualified male associates. In reaching the conclusion that the firm had
discrim- inated, the district court considered that the firm had criticized
the female associate for being: "too involved with women's issues in the
Firm," 751 F. Supp. at 1192; and "'very demanding'" and insufficiently
"nonassertive and acquiescent to the predominantly male partnership." Id. at
1189.

The Court of Appeals, however, disagreed and held that the District Court
had erred by substituting its judgment for that of the firm's evaluation
committee. The proper analysis should not have been whether in the court's
view the lack of legal analytical ability was crucial to success as a
partner. Rather, the court should have analyzed whether male associates who
were granted partnership had been similarly criticized.

1. Bruno v. City of Crown Point, 950 F.2d 355

(7th. Cir. 1991), cert. denied, 120 S. Ct. 2992 (1992): During a job
interview for the position of paramedic on an ambulance, the employer asked
the sole female applicant questions relating to child care, her spouse's
feelings about her seeking the job and her spouses's job, which the employer
did not ask male applicants. The Court of Appeals stated: "While family
questions are

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important, an interviewer should not single out women and focus on them as
if they were the only sex concerned about how family responsibilities may
affect the demands of the job." 950 F.2d at 362.

2. Drinkwater v. Union Carbide Corp., 904 F.2d

853 (3d Cir. 1990): In attempting to establish a sexual harassment claim
based on a hostile environment, a female market research employee alleged
that her employer made impermissible demands upon her concerning her makeup,
eyeshadow and clothing. Although finding that there was insufficient
evidence to sustain the claim, the Court of Appeals stated that:

Undue preoccupation with what female employees look like is not permissible
under anti-discrimination laws if the same kind of attention is not paid to
male employees. Traditional ideas about what a woman should look like are
not legitimate criteria for evaluating women in the workplace.

Id. at 862-63.

1. Vincenti v. Hilliard-Lyons, Inc., 1991 U.S.

App. LEXIS 29376 (6th Cir. 1991): An employer terminated a female trader
after she became engaged to the son of one of its competitors because the
employer was concerned that the female employee would divulge proprietary
information. The female employee alleged that although a number of male
traders were married to women who worked at competitors none of them were
terminated because the employer believed that women were more likely than
men to engage in "pillow-talk."

In upholding the decision in favor of the employer, the Court of Appeals
acknowledged that existence of the stereotype, but held that the employee
had presented no directed evidence that the employer had relied on the
stereotype in reaching its decision to terminate her. See id. at *10.

A. Sexual Stereotyping and Sexual Orientation

1. Although sexual orientation was not an issue

in Price Waterhouse, gay plaintiffs who can show similar gender stereotyping
may also have a cause of action. Note, Sex(ual Orientation) and Title VII,
91 Colum. L. Rev. 1158, 1180 (1991) (hereinafter Sexual Orientation)).

2. A few courts have rejected arguments that

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discrimination against homosexual male employees because they are
"effeminate" violates Title VII. See, e.g., Smith v. Liberty Mutual Ins.
Co., 569 F.2d 325 (5th Cir. 1978); DeSantis v. Pacific Tel. & Tel. Co., 608
F.2d 327 (9th Cir. 1979).

3. Employers can claim in their defense that the

employee was treated differently because of sexual orientation (which is
currently permissible under Title VII) and not on the basis of gender
stereotyping. (But protection is available under some state discrimination
laws. See infra Part III(c)).

a. The Sixth Circuit rejected on two

grounds a Price Waterhouse claim by a homosexual employee whose co-workers
harassed him by describing the sexual acts they presumed that he performed.
Dillon v. Frank, 1992 U.S. App. LEXIS 766, 58 Empl. Prac. Dec. (CCH)  41332
(6th Cir. 1992).

First, the court held that the co-workers would have objected to the sex
acts regardless of whether a woman or man had performed them, so no gender
discrimination was involved.

Second, the court said that whereas in Price Waterhouse the plaintiff was
placed in a "Catch-22" situation because the "male" traits such as
aggressiveness for which she was penalized were also traits she needed to be
promoted, Dillon's supposed activities or characteristics were irrelevant in
the workplace and thus did not place him in such a Catch-22. Dillon, 1992
U.S. App. LEXIS 766, at *28-29.

1. A claim of gender stereotyping may be the

only potential claim available to gay men and lesbians under Title VII. In
fact, some commentators have suggested that gay people are discriminated
against because they do not conform to an expectation of gender roles, and
thus all discrimination on the basis of sexual orientation is actually
impermissible gender stereotyping. See, e.g., Sexual Orientation, supra, at
1183; Developments -- Sexual Orientation and the Law, 102 Harv. L. Rev.
1508, 1580-1581 (1989) (hereinafter Sexual Orientation and the Law).

Although this argument has not been adopted in the Title VII context, courts
and legislatures have considered it in other contexts. For example, the
Minnesota sexual orientation anti-discrimination law includes in its
protected class definition

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anyone "having or being perceived as having a self-image or identity not
traditionally associated with one's biological maleness or femaleness." 1993
Minn. Ch. Law 22 (1993).

I.Domestic Partnership Benefits

Most benefits available to the legal spouses of employees are not available
to unmarried domestic partners of employees. Unmarried workers in long-term
relationships, both opposite-sex and same sex relationships, are
increasingly asserting that they are not being compensated equally to
similarly situated married co-workers. Domestic partnership benefits raise
many legal issues relating to discrimination based on marital status and
sexual orientation, tax law treatment, and COBRA rights.

Federal, state and local laws do not expressly require an employer to
provide domestic partnership benefits. Nevertheless, an increasing number of
employers and law firms are offering domestic partnership benefits to their
employees.

Advocates of domestic partnership rights focus on two arenas of change: (1)
legal recognition of or registration for non-traditional relationships, and
(2) the extension of employer-provided benefits to non-married domestic
partners.

Generally, a "domestic partnership" refers to "two persons who reside
together and who rely on each other for financial and emotional support."
Robert L. Eblin, Domestic Partnership Recognition in the Workplace:
Equitable Employee Benefits for Gay Couples (and Others), 51 Ohio St. L.J.
1067, 1069 n.11 (1990). Though often included in the definition, a sexual
relationship is not necessarily a requirement of a domestic partnership. Id.

A. Legal Recognition of Domestic Partnerships

1. State Law Provisions

Currently, no state recognizes marriages between two persons of the same
sex. Attempts have been made to enact statewide registration of domestic
partnership registration, but to date they have been unsuccessful.

Recently, the Hawaii Supreme Court ruled that denying same-sex couples the
right to marry may violate the Equal Protection Clause of Hawaii's
Constitution. Baehr v. Lewin, 852 P.2d 44 (Haw. 1993). A plurality of
Hawaii's Supreme Court found the state's marriage statute to be a prima
facie violation of Hawaii's equal protection guarantee. Since "sex" (or
gender) is a protected class in the Hawaii Constitution, and marriage is a
civil right protected by Hawaii's Equal

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Protection Clause, the plurality required the state on remand to show that
its policies limiting marriage to opposite-sex couples serve a compelling
state interest and are narrowly drawn to serve those interests without
unnecessarily abridging constitutional rights. The presumptively
unconstitutional discrimination was viewed as being based on the plaintiffs'
sex, not on their sexual orientation. Although this opinion raises the
prospect that Hawaii might become the first state to recognize same-sex
marriages, the outcome is by no means certain. But see, Dean v. District of
Columbia, 653 A.2d 307 (D.C. App. 1995) (D.C.'s Human Rights Act did not
require D.C.'s marriage statute to include same-sex marriages).

1. Municipal Ordinances

Several municipalities have passed measures allowing unmarried couples to
register as domestic partners. See, e.g., Ann Arbor, Mich., Code  9:85 -
9:95 (1991); Atlanta, Ga., Ordinance 93- 0-0776 (1993); Berkeley, Cal.,
Admin. Proc. No. 2- 37 (1988); Ithaca, N.Y., Ordinance No. 91-5 (Jan. 28,
1991); Madison, Wis., Code  7.1 - 7.8 (1991); Minneapolis, Minn., Code ch.
142 (1991); New York City, N.Y., Executive Order No. 48; (Jan. 7, 1993); San
Francisco, Cal., Code ch. 62 (1990); West Hollywood, Cal., Code  4220 -
4228 (1985).

a. New York City, New York: A domestic

partnership is defined as two people, both of whom are 18 years of age or
older, neither of whom is married or related by blood in a manner that would
bar their marriage in New York State, of a close and committed personal
relationship, who live together and have been living together on a
continuous basis, and have executed a registration certificate as domestic
partners with the City Clerk.

b. San Francisco, California: Domestic

partners are defined as two adults who have chosen to share one another's
lives in an intimate and committed relationship with mutual caring, who live
together, and have agreed to be jointly responsible for basic living
expenses incurred during the domestic partnership. A declaration of domestic
partnership form must be registered with the County Clerk.

Although some municipalities provide for the extension of benefits (some
including healthcare packages) to the domestic partners of municipal
employees (see, e.g., Los Angeles, New York City,

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San Francisco and Seattle), none of the registration ordinances require that
private employers provide such benefits.

A. Developments in the Law Regarding Domestic Partner

Benefits

Domestic partner advocates have attempted to obtain benefits from public and
private employers through the collective bargaining process, by invoking
statues prohibiting marital status discrimination and sexual orientation
discrimination, and/or by reliance on employer policies against
discrimination. Although employees have been unsuccessful to date,
litigation continues, and in the future anti-discrimination laws might be
extended by amendment or incorporation to cover domestic partner benefits.

1. Marital Status Discrimination Claims

Gay men and lesbians have argued that the granting of employment benefits to
only an employee's legally recognized spouse is unlawful marital status
discrimination. Because gay men and lesbians cannot marry, as no state
currently recognizes same-sex marriages, domestic partnership advocates
argue that treating non-married people differently is discrimination.

a. Federal Law does not prohibit marital

status discrimination.

The Equal Employment Opportunity Commission ("EEOC"), however, has stated in
its guidelines that employer rules that forbid or restrict the employment of
married women unlawfully discriminate against women if those rules do not
also apply to married men. (29 C.F.R.  1604.4(a) (1992)).

a. State law:

i. Many states include marital status dis- crimination among the enumerated
categories upon which an employer may not discriminate. See, e.g., Alaska
Stat.  18.80.220 (1986); Cal. Gov't Code  12940(a) (West 1980); Conn. Gen.
Stat. Ann.  46a-60 (West 1986); Del. Code Ann. tit. 19,  711 (1979); D.C.
Code Ann.  1-2512 (1987); Fla. Stat. Ann.  760.10(2) (West 1986); Haw.
Rev. Stat.  378-2 (1985); Ill. Ann. Stat. ch. 68, para. 2-102 (Smith-Hurd
1989); Md. Ann. Code art. 49B,  16 (1979); Mich. Comp. Laws Ann. 
37.2202(1) (West 1985); Minn. Stat. Ann.  363.03 Subdiv. 1 (West Supp.
1991); Mont.

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Code Ann.  49-2-303 (1989); Neb. Rev. Stat.  48-1104 (1988); N.H. Rev.
Stat. Ann.  354- A: 8 I-III. (1984); N.J. Stat. Ann.  10:5- 12 (West
1976); N.Y. Exec. Law  296 U (McKinney 1982); Or. Rev. Stat  659.030
(1989); Wash. Rev. Code Ann.  49.60.180 (West 1990); Wis. Stat. Ann. 
111-321-322 (West 1988).

ii. State and local prohibitions against marital status discrimination are
designed primarily to ensure that an individual's status as a married person
or as a single person is not the basis for providing employee benefits or
making other employment decisions. To date, courts have not generally held
that these state and local laws require employers to offer benefits to
unmarried partners.

1. A few courts have recognized that the

granting of domestic partnership benefits to only the legally recognized
spouses of employees violates local marital status and sexual orientation
discrimination laws.

a. Gay Teachers Ass'n v. Board of Educ. of

the City of New York, N.Y.L.J., Aug. 23, 1991, at 21 (Moskowitz, J.): The
New York Supreme Court held that the Gay Teachers Association had alleged a
cause of action under Executive Order No. 28 which prohibits discrimination
based on sexual orientation and under the New York Human Rights Law based on
marital status discrimination. The case has thus far survived a motion to
dismiss and is still pending.

b. Anglin v. Minneapolis, Minneapolis

Commission on Civil Rights, No. 88180-EM-12 (Nov. 17, 1992): The Minneapolis
Commission ruled that the denial of benefits to the same-sex partners of
three librarians violated the City's ordinance which prohibits
discrimination based on affectional preference. The commission also held
that the refusal to grant benefits to the domestic partners of the
librarians had a disparate impact upon lesbians. But see, Lilly v. City of
Minneapolis, 527 N.W.2d 107 (Minn. App. 1995) (city ordinance granting
health benefits to domestic partners of municipal employees is ultra vires
and without legal force).

2. A number of courts have recently

reinterpreted state law definitions of family, ------------National Journal
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extending to unmarried cohabitants rights that have historically been
reserved for "traditional families." Although not addressing domestic
partnership benefits directly, a new definition of terms such as "family"
and "spouse" may affect the manner in which marital status statutes are
applied.

a. Braschi v. Stahl, 74 N.Y.2d 201, 543

N.E.2d 49, 544 N.Y.S.2d 784 (1989). The New York Court of Appeals extended
the definition of "family" under New York City's rent control law to include
same-sex couples living together in a committed relationship. The court held
that determining what constituted a family under the statute required "an
objective examination of the relationship of the parties . . . including the
exclusivity and longevity of the relationship, the level of emotional and
financial commitment, the manner in which the parties have conducted their
everyday lives and held themselves out to society, and the reliance placed
upon one another for daily family services." 74 N.Y.2d at 212-13, 542 N.E.2d
at 55, 544 N.Y.S.2d at 790.

It is possible that the court could redefine "spouse" in a similar fashion
and thus require that domestic partners be accorded the same benefits as
traditional spouses.

a. Reep v. French, Civil No. 89-4229 (Mass.

Dist. Ct., Northampton Div. July 9, 1990), appeal filed, No. A.C. 91-P-392
(Mass. App. Ct. July 25, 1990). The court held that a woman who left a job
to follow her unmarried partner left for "good cause," and was consequently
entitled to unemployment insurance benefits.

b. In re Michael D., SF 24774, Cal. Unempl.

Ins. App. Bd. (Sept. 13, 1985). A state appeals board held that a gay man
who left work to care for his lover who was dying of AIDS had left for "good
cause" and was entitled to benefits. Though the men were not related by
blood or marriage, they were "family members" within the meaning of the
statute. Similarly, unmarried partners have been found to be "good faith"
family members for workers' compensation purposes.

c. But see, Ross v. Denver Department of

Health and Hospitals, 1994 Colo. App. LEXIS 97 (April 7, 1994). A Colorado
appeals court denied family sick leave benefits to a

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lesbian employee for the time she took off to care for her domestic partner.
The statute covering public employees contains an exhaustive list defining
who is a family member for purposes of sick leave benefits, including
husbands and wives, but not domestic partners. Id. at *3. The court strictly
adhered to the letter of the statute, emphasizing that domestic partners are
not covered.

1. Employer Policies

Many employers have voluntarily adopted non-dis- crimination policies that
prohibit, among other things, discrimination in compensation on the basis of
sexual orientation and/or marital status.

In those situations when employers have a such an internal policy, an
employee may contend that the denial of domestic partnership benefits is a
violation of that policy. See, e.g., Gay Teachers Assoc. v. Board of Ed. of
the City of New York, N.Y.L.J., Aug. 23, 1991, at 21 (Moskowitz, J.).

Employees bringing such a claim would have to prove that: the employers'
internal employment policies are applicable and binding, and benefits are a
form of compensation to which the employee is entitled.

a. In Newport News Shipbuilding & Dry Dock

Co. v. EEOC, 462 U.S. 669, 682 (1983), the Supreme Court held that health
insurance and other fringe benefits are "compensation, terms, conditions, or
privileges of employment." The Court in that case found that a health plan
that provided more generous pregnancy benefits to female employees then to
wives of male employees, was unlawfully discriminatory.

1. Collective Bargaining

Unions have begun to pressure employers to provide domestic partner
benefits, particularly if their collective bargaining agreements contain
non-dis- crimination clauses covering marital status and sexual orientation.

a. In 1981, District 65 UAW Writers,

Editorial and Clerical Workers Union negotiated a compromise agreement with
the Village Voice, under which the newspaper's unofficial policy of
extending benefits to unmarried straight couples was extended to all
employees. Martha McDonald, Domestic

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Partner Benefits Changes, Business & Health 11, 11-12 (Oct. 1990).

b. In 1986 employees of the city of Santa

Cruz, represented by the Service Employee International Union, brought the
issue of domestic partner benefits to the bargaining table, and negotiated
it into their contracts. Santa Cruz Action Network, Volume IX, No. 1 (1990).

1. Tax Law

Unlike health benefits provided to married partners, which are not taxable,
health benefits provided to domestic partners are in most instances taxable
to the employee. Although the IRS has not issued formal guidance on this
issue, it has issued four private letter rulings reciting this principle.
See Priv. Ltr. Rulings 90-34-048, 91-11-018, 91-09-060, 92-31-062. Because
domestic partner benefits are taxed, qualified employees might be reluctant
to take advantage of the benefits when they are available. One city found
that the number of domestic partners choosing coverage under its health care
plan dropped fifty percent when the city began withholding taxes on the
imputed income attributable to the benefit.

a. Coverage:

Generally, benefits available to an individual in connection with someone
else's employment are taxable to the employee. A significant exception to
this rule is health care coverage for spouses or dependents. Under current
tax rules, domestic partners generally would not qualify for this exclusion.
Consequently, the employee will be taxed on the fair market value of the
benefit.

An employee with a domestic partner might qualify for the exclusion if he or
she can demonstrate that his or her domestic partner is either a common law
spouse under state law or a dependent for tax purposes.

a. Other tax issues might arise if an

employer provides domestic partnership benefits in the following contexts:
medical expense reimbursements, alternative health plans such as cafeteria
plans or flexible spending accounts and COBRA.

A. Creating A Domestic Partner Benefits Plan

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Because lesbians and gay men may not marry their partners, some employers
have concluded that it is unfair to deny benefits to lesbians and gay
employees who are involved in long-term, "marriage-like" relationships.

Employers considering offering domestic partner benefits to their employees
must determine: who will be eligible, what benefits will be offered, and how
the benefits will be administered.

1. Who will be eligible

a. Opposite-Sex Partners

Most domestic partnership benefits plans offer coverage to same-sex and
opposite-sex partners. See, e.g., Plan for Ben & Jerry's Homemade Inc., Levi
Strauss & Co., City of San Francisco, Ziff-Davis Publishing, International
Data Group, and Xerox Corp..

a. Same-sex partners

Some employers such as Home Box Office, Milbank, Tweed, Hadley & McCloy,
Lotus Development Corp., Montefiore Medical Center, The Walt Disney Company
and Stanford University, limit their plans to same-sex partners only.

The most common reason given for this policy is that opposite-sex partners
have the option to marry and receive spousal benefits, while lesbians and
gay men do not.

Another reason for limiting benefits to same- sex partners is cost. For
example, while Stanford University's task force recommended extending
benefits to opposite sex couples, it acknowledged that if resources allowed
for an extension of benefits to only one of the two groups, a stronger case
existed for benefits for same-sex than for opposite-sex couples.

i. The New York State Insurance

Department recently concluded that extension of domestic partner benefits to
only same-sex couples would be lawful. In a letter date June 9, 1994, the
Department cited as a rational basis for its conclusion of the fact that
heterosexual partners are not prevented from receiving insurance benefits
through the normal channels of marriage.

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Additionally, the Department recognized the cost of extending benefits to
opposite sex partners. (Letter from Donna Freireich, Deputy Superintendent
and General Counsel, State of New York Insurance Department, to Joseph
Bress, Director, New York State Governor's Office of Employee Relations of
6/9/94, at 2-3.)

Nonetheless, heterosexual employees who are in stable and committed
relationships arguably should receive benefits for their partners for the
same reasons that lesbian and gay employees do.

In addition, unmarried opposite-sex couples in benefit plans along with
same-sex couples avert charges of discrimination, and often make the
proposal more palatable to unions, fellow employees and the public.

a. Children of partners

Many employers provide the same benefits to children of the domestic
partners of employees as to children of spouses of employees.

1. What benefits to offer

The most significant benefit that can be offered to domestic partners is
health insurance. However, many employers also extend other, less costly
benefits, in addition to -- or in lieu of -- health insurance.

a. Health Insurance:

i. Large Employers

Because many insurance companies will not provide coverage for domestic
partners, large employers that are self-insured often find it easier to
offer domestic partner benefits than do small employers relying on outside
insurance.

Nevertheless, larger employers might have trouble procuring stop-loss,
minimum premiums or other excess coverage, or coverage through HMOs. HMOs
have taken a wait-and-see attitude, to see if other carriers are willing to
provide coverage. Linda M. Laarman, Employer Health Coverage for Domestic
Partners--Identifying the Issues, 18 Employee Relations L.J. 567, 570 (1993)

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(hereinafter "Laarman").

i. Small employers

Small employers, which are typically not self-insured, might have a more
difficult time obtaining coverage for domestic partners, especially if their
carrier engages in individual underwriting (assessing the health of each
potentially insurable individual).

Some small employers might opt to subsidize the cost of individual policies
purchased by domestic partners--rather than adding them to the existing
plan. Laarman, supra, at 570-71.

Buying pools might allow small employers to band together to purchase
insurance thereby decreasing risk and reducing cost. Moreover, if "community
rating" becomes mandatory, insurers will not be able to raise costs based on
the risk associated with one individual. Laarman, supra, at 571.

Over time the experience of most companies has been that domestic partner
coverage does not add significantly to the cost of providing benefits.
Hence, insurers may become more willing to insure domestic partners.

a. COBRA Benefits:

Even though no employer is required by law to extend domestic partner
benefits under COBRA, some employers voluntarily choose to offer COBRA-like
benefits. Several entertainment companies, such as MCA, Inc., Viacom, Inc.,
Home Box Office and Warner Bros., have constructed plans that provide
continuation of coverage to "spousal equivalents" and their dependents upon
the termination or death of the employee.

a. Death/Bereavement Leave Policies:

In accordance with the policy behind recognizing the family like nature of
non- married couples, extensions of death and/or bereavement leave to
employees in the event of the death of a domestic partner, a parent or child
of a domestic partner, is a fairly inexpensive method of acknowledging those
relationships.

Apple Computer, Inc., for example, provides

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medical and dental benefits to same-sex partners only, but grants family
leave and bereavement benefits for both same- and opposite-sex partners.

a. Family and Medical Leave:

Although the Family & Medical Leave Act of 1993, does not require that
employers extend leave to employees to care for their unmarried domestic
partners, (Interim Final Regulations reprinted in Daily Lab. Rpt. (BNA)
Special Supplement at S-37 (June 4, 1993)), some employers grant family
leave to employees to care for their domestic partners as well as the
children of their partners.

1. How to Administer the Plan

a. Clearly Define Who is Covered

For example:

Two adults of the same sex [or two adults who are not legally married] who
have chosen to share their lives in an intimate and committed relationship,
reside together and share a mutual obligation of support for basic
necessities of life.

a. Establish a Process for Verifying the

Relationship

i. An employer may require that employees provide proof that (s)he lives
with and is financially interdependent with the person for who domestic
partnership benefits are being claimed.

ii. An employee may be asked to sign an affirmation which states that the
employee and the domestic partner are:

(1) not related by blood to a degree of closeness that would prohibit legal
marriage;

(2) mutually responsible for costs of basic living expenses;

(3) both at least the age of consent in the state in which they reside;

(4) in a committed relationship which has been in existence for at least one
year,

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(5) residing together and intend to do so permanently; and,

(6) not married to anyone else.

iii. Documentation and Waiting Periods:

(1) Registration

An employer may require that an employee register as domestic partners with
the county or city clerk if applicable.

(1) Waiting Period

An employer may require that benefits for a domestic partner do not become
effective for 90 days or six months following the application for benefits.

A waiting period is a very practical, easily verifiable requirement,
offering no difficult problems of proof or administrative inconvenience to
either employers or insurance companies. It is one of the most effective
ways to combat adverse selection--an employee will usually not try to obtain
benefits for a sick friend or relative when he or she would be forced to
wait a significant time before receiving coverage. Of course, a waiting
period also means that significant health needs of a bona fide partner may
go unmet.

a. Consider Tax Consequences

Employers should plan to withhold the fair market value of the cost of the
benefit to the employee and comply with the tax code as outline above. See
Section II(B)(6) supra.

iv. Employers should consider whether any

process they establish for verification is anymore burdensome for same-sex
couples than for marries couples.

1. Other Legal Considerations:

a. Homosexual sodomy is still illegal in

half the states. Although there is no known case, theoretically an employer
could be held liable for "aiding and abetting" illegal cohabitation. Linda
M. Laarman, Employer Health Coverage for Domestic Partners-- Identifying the
Issues, 18 Employee Relations L.J. 567, 578 (1993).

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b. Coverage of domestic partners might create unintended consequences for
the employee in states such as California, where palimony is a possibility.

c. Employers should carefully consider

whether it is wise to offer domestic partnership benefits to only same-sex
partners. It is possible that employees with opposite-sex domestic partners
could maintain an action for marital status or sexual orientation
discrimination under state and local ordinances.

I. Employment Discrimination Based on Sexual Orientation

A. Introduction

Sexual orientation discrimination law is one of the most rapidly growing and
changing areas affecting employers. A national gay rights bill is currently
pending in Congress. On the local level, the number of states, counties and
cities with laws prohibiting such discrimination has multiplied rapidly in
the last decade.

The effects of these laws can be significant for employers and employees
alike. Employees have won substantial awards in sexual orientation
discrimination cases, and employers have been forced to make substantial
changes in their recruitment, hiring, education, and workplace conduct and
policies.

A. Federal Law

No federal law prohibits discrimination on the basis of sexual orientation.
Every circuit that has considered such cases under Title VII of the Civil
Rights Act of 1964, 42 U.S.C.  2000e et seq., has held that the Title VII
does not prohibit such discrimination.

1. "Sex" Does Not Include Sexual Orientation

The Civil Rights Act of 1964 was enacted primarily to bar discrimination on
the basis of race. There is little legislative history regarding the
prohibition on discrimination on the basis of sex.

Holloway v. Arthur Andersen & Co., 566 F.2d 659 (9th Cir. 1977). In the
absence of legislative history courts have relied on the 1972 Amendments to
Title VII and the fact that all attempts to amend the Act to include sexual
orientation have failed, concluding that the "because of...sex" language in
the Act was intended to benefit women and to refer only to gender. Id. at
662-3

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(construing 42 U.S.C.  2000e-2(a)(1), (2)(19)). Consequently, courts have
not interpreted "sex" as including sexual orientation.

a. DeSantis v. Pacific Tel. and Tel. Co.,

608 F.2d 327, 329-30 (9th Cir. 1979) ("[W]e conclude that Title VII's
prohibition of `sex' discrimination applies only to discrim- ination on the
basis of gender and should not be judicially extended to include sexual
preference such as homosexuality") (footnotes omitted).

b. Dillon v. Frank, 1992 U.S. App. LEXIS

766, *11-12, 58 Empl. Prac. Dec. (CCH)  41332 (6th Cir. 1992) ("The
circuits are unanimous in holding that Title VII does not proscribe
discrimination based on sexual activities or orientation," because only dis-
crimination "based on being male or female is prohibited by Title VII").

c. Williamson v. A.G. Edwards & Sons, Inc.,

876 F.2d 69, 70 (8th Cir. 1989) ("Title VII does not prohibit discrimination
against homosexuals"), cert. denied, 493 U.S. 1089 (1990).

d. Blum v. Gulf Oil Corp., 597 F.2d 936,

938 (5th Cir. 1979) ("Discharge for homosexuality is not prohibited by Title
VII or Section 1981").

e. Kelley v. Vaughn, 760 F. Supp. 161, 163

(W.D. Mo. 1991) ("However, the term 'sex' as it is used in the Act refers to
gender, not to sexual orientation. Because homosexuality pertains to sexual
preference, and not to gender, 'Title VII does not prohibit discrim- ination
against homosexuals'") (citations omitted).

1. Other Arguments Under Title VII Rejected By

the Courts

A number of plaintiffs have attempted to borrow reasoning and arguments that
have been successful in discrimination suits based on sex and race and apply
those arguments to sexual orientation dis- crimination. Plaintiffs have
claimed that gay men are more numerous than lesbians, that they are more
likely to be discovered, and therefore, that discrimination on the basis of
sexual orientation has a disparate impact on men. Plaintiffs also argued
that by hiring women who prefer men as sexual partners while discriminating
against men who prefer men as sexual partners, employers use

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different criteria for men and women. At least one plaintiff has argued that
just as discrim- ination against employees because of the race of their
friends may violate Title VII's proscription of race discrimination (see
EEOC Dec. No. 71- 1902 (1971), 1971 EEOC LEXIS 73), discriminating against
employees because of the gender of their friends constitutes impermissible
sex discrim- ination. These arguments have so far been unsuccessful. See,
e.g., DeSantis v. Pacific Tel. and Tel. Co., 608 F.2d 327 (9th Cir. 1979).

1. Gay and Lesbian Civil Rights Bills

There are currently two bills before Congress proposing to extend Title VII
coverage to gay men and lesbians. These identical bills were simultaneously
introduced in the Senate and the House of Representatives. See S. 2238,
103rd Cong., 2d Sess. (1994); H.R. 4636, 103rd Cong., 2d Sess (1994).

a. The proposed Employment Non-

Discrimination Act of 1994 ("the ENDA") would extend most of the protections
of Title VII to individuals on the basis of sexual orientation. S. 2238 and
H.R. 4636. The ENDA is modeled on Title VII with similar definitions,
enforcement procedures, and posting requirements. The ENDA would be
administered by the Equal Employment Opportunity Commission.

The ENDA prohibits discrimination in employment or employment opportunities
based on lesbian, gay, bisexual, or heterosexual orientation, real or
perceived.

While the ENDA would apply to private employers and state and federal
employees, it would not apply to the military or religious organizations.

Unlike Title VII, there is no "disparate impact" claim available to a
plaintiff under the ENDA. S. 2238  5.

The ENDA does not apply to the provision of employee benefits to an
individual for the benefit of his or her partner, thus precluding mandatory
benefits to same-sex couples.

The ENDA prohibits employers from adopting or implementing quotas on the
basis of sexual orientation. S. 2238  6.

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a. Over the past two decades gay rights

advocates have repeatedly attempted to amend Title VII of the Civil Rights
Act of 1964 to cover sexual orientation. See, e.g., H.R. 5452, 94th Cong.,
1st Sess. (1975); H.R. 1454, 97th Cong., 1st Sess. (1982). None of these
attempts has succeeded, but the current attempts seem likely to generate
more attention due to large support already amassed in Congress in favor of
the ENDA (29 Senators and 108 Representatives sponsored the ENDA).

In October 1995, President Clinton endorsed the ENDA and became the first
sitting president to endorse a piece of major legislation to secure equal
rights for gay men and lesbians. See Steven A. Holmes, Clinton Backs Bill to
Protect Homosexuals from Job Bias, N.Y. Times, Oct. 20, 1995, at A1.

A. State, County and Municipal Laws

1. State and Local Laws Prohibiting Sexual

Orientation Discrimination

a. Eight states and the District of Columbia currently prohibit sexual
orientation discrimination in private and public employment: California,
Cal. Lab. Code  1101, 1102, 1102.1 (West 1993); Connecticut, Conn. Gen.
Stat.  46a-60, 46a- 81a (1992); Hawaii, Haw. Rev. Stat.  378 et seq.
(1992); Massachusetts, Mass. Gen. L. ch. 151b,  3(6), 4 (1989); Minnesota,
Minn. Stat.  363.01; New Jersey, N.J. Rev. Stat.  10:5-4, 10:5-5, 10:5-12
(1992); Vermont, Vt. Stat. Ann. tit. 21,  495(a) (1992); Wisconsin, Wis.
Stat. Ann.  111.31-.395 (West 1988); and District of Columbia, D.C. Code
Ann.  1-2501, 1-2503, 1-2512 (1981).

b. In at least ten other states sexual

orientation employment discrimination bills are currently pending: Illinois,
Maine, New Hampshire, New Mexico, New York, Oregon, Rhode Island, Texas,
Washington, and West Virginia.

c. Additionally, eleven states prohibit

discrimination based on sexual orientation in public employment only:
Illinois, Louisiana, Maryland, Michigan, New Mexico, New York, Ohio,
Pennsylvania, Rhode Island, and Washington.

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d. Over the past decade, numerous cities

and counties also have passed laws prohibiting discrimination by private
employers on the basis of sexual orientation.

As of April 1993, there were at least 115 such laws including Atlanta, Ga.,
Ordinances 86-0-0190 & 86-0-0308; Boston, Mass., Code Tit. 12, Ch. 40;
Chicago, Ill., Mun. Code, Ch. 199 et seq.; Philadelphia, Pa., Fair Prac.
Ordinance, Ch. 9-1100 (1982); New York City, N.Y., N.Y.C. Admin. Code 
8-102(20) (1991); Los Angeles, Cal., Code, Ch. IV, Mun. Code (1979); and San
Francisco, Cal., Code, Art. 33  3301 (1992).

e. In October 1995, the United States Supreme

Court heard oral arguments in Romer v. Evans.

At issue in Romer is a Colorado constitutional provision adopted by popular
referendum that bars all state and local government entities from providing
legal protection against discrimination based on gay, lesbian or bisexual
identity. Similar referendums have been offered in other states and
localities, usually under the rubric of denying "special rights" to gays and
lesbians. The Supreme Court's decision in Romer will have an effect on
several pending cases and referendums. See, e.g., Equality Found. v. City of
Cincinnati, 54 F.3d 261 (6th Cir. 1995) petition for cert. filed (Aug. 10,
1995).

1. Coverage

a. In General

State statutes barring sexual orientation discrimination in private
employment generally prohibit the consideration of sexual orientation in any
employment decision including hiring, barring or discharging from
employment, compensation, and terms, conditions, or privileges of
employment. See, e.g., Conn. Gen. Stat.  46a-81c.

Most state statutes also prohibit employers from advertising for employees
on the basis of sexual orientation and from asking job applicants questions
regarding their sexual orientation. See, e.g., N.J. Rev. Stat.  10:5-12.

a. Definitions of Protected Class

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Definitions of the protected class vary, but they are generally broad. Most
states define the prohibited discrimination as encompassing both actual and
perceived homosexuality.

Therefore, it is no defense to an allegation of sexual orientation
discrimination to show that the plaintiff is not actually gay. See, e.g.,
Cal. Lab. Code  1102.1.

Several states explicitly include heterosexuality and bisexuality in the
protected class, making it illegal to prefer homosexuals. See, e.g., D.C.
Code  1- 2502(28).

Minnesota, for example, has expanded the protected class to include anyone
"having or being perceived as having a self-image or identity not
traditionally associated with one's biological maleness or femaleness."
Minn. Stat.  363.01.

a. Religious Groups

Most states exempt religious groups from sexual orientation employment
discrimination laws. See, e.g., Wis. Stat. Ann.  111.337(2). (Note that in
some states the exemption applies to all kinds of discrim- ination, not only
sexual orientation. See, e.g., Mass. Gen. L. ch. 151B,  3(6) and 4.

i. Definitions

The standard definition includes any "religious or denominational
institution or organization, or any organization operated for charitable or
educational purposes, which is operated, supervised, or controlled by or in
connection with a religious organization." Vt. Stat. Ann. tit. 21, 
495(a)(7); see also Haw. Rev. Stat.  378-3(5). The groups exempted vary
slightly from state to state, however, and the definitions tend to be vague
and open to interpretation.

i. Effect of Exemption

Generally, employers meeting the criteria for the religious exemption may
limit employment both to members of their own religion and to people whose
employment is in accord with the tenets of the religion. For example, the
Massachusetts Fair Employment Practice Act allows religious employers to
give preference to employees of the same religion and to take

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employment actions "which are calculated by such organization to promote the
religious principles for which it is established or maintained." Mass. Gen.
L. ch. 151B,  1.

These statutes could be construed to allow religious employers whose
religion disallows homosexuality to refuse to hire people on the basis of
sexual orientation.

i. First Amendment Concerns

The First Amendment may require that religious organizations be exempted
from sexual orientation discrimination laws even where they are not
specifically exempted by state statute.

Courts analyzing such claims must first assess the extent to which the law
imposes a burden upon the group's practice of religion by determining
whether the group's objection to the law is truly religious, whether it is
central to the religion, and whether the beliefs are sincere. Shelley
Wessels, The Collision of Religious Exercise and Governmental
Nondiscrimination Policies, 41 Stan. L. Rev. 1201, 1204-1205 (May 1989). The
court must then decide whether the government's interest in
antidiscrimination is a compelling interest that overrides the group's
interest and, if so, whether the law is the least restrictive means to
accomplish the state's interest. Id. at 1205.

Since sexual orientation discrimination laws are relatively new, there is
little case law specifically concerning the conflict between the First
Amendment and sexual orientation discrimination laws. In several old cases,
the right of a religious organization to freedom of religion was found to
outweigh any interests of the state or of gay male and lesbian plaintiffs.

1) In an early case, a California court found that forcing a church to
violate its beliefs by hiring a gay organist would be a substantial burden
on its right to free exercise of religion. Walker v. First Orthodox
Presbyterian Church of San Francisco, 22 Fair Empl. Prac. Cas. (BNA) 762
(Cal. Super. Ct. 1980). The court held that the state's interest in
protecting gay men and lesbians against discrimination did not outweigh the
church's First

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Amendment interest and thus the San Francisco Police Code which prohibited
discrimination in employment on the basis of sexual orientation did not
apply to the church. Id.

2)3) Several years before Massachusetts enacted its statute prohibiting
discrim- ination on the basis of sexual orientation, a state court found
that the right of the Christian Science Church to free exercise of religion
outweighed any rights that a lesbian employee might have. Madsen v. Erwin,
395 Mass. 715, 481 N.E.2d 1160 (1985).

In light of recent judicial and legislative support for civil rights on the
basis of sexual orientation, however, courts may find that the state has a
more compelling interest in protecting the rights of gay men and lesbians.
Several recent cases support this prediction.

(1) In 1987 the D.C. Court of Appeals found that the government's compelling
interest in eradicating sexual orientation discrimination includes "the
fostering of individual dignity, the creation of a climate and environment
in which each individual can utilize his or her potential to contribute to
and benefit from society, and equal protection of the life, liberty and
property that the Founding Fathers guaranteed to us all." Gay Rights
Coalition of Georgetown Univ. Law Ctr. v. Georgetown Univ., 536 A.2d 1, 37
(D.C. App. 1987).

The court noted that the D.C. Council clearly regarded its interest in the
matter as compelling and that sexual orientation has "most or all of the
characteristics that have persuaded the Supreme Court to apply strict or
heightened constitutional scrutiny to legislative classifications under the
Equal Protection Clause." Id. at 36.

The court held that this compelling interest outweighed any slight burden
Georgetown University would suffer in giving a group of gay law students
equal access to benefits that it provided to all student groups.

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(1) In 1992 a federal court in New Jersey weighed the interests of a group
of churches who claimed that New Jersey's Law Against Discrimination
infringed on their First Amendment rights against the interests of New
Jersey in protecting gay men and lesbians from discrimination. Presbytery v.
Florio, 60 Fair Empl. Prac. Cas. (BNA) 805 (D.N.J.), aff'd without op., 983
F.2d 1052 (3d Cir. 1992).

In denying plaintiffs preliminary injunction, the court found that it should
be deferential "to the legislature's efforts to establish the public's
interest in protecting persons of a minority sexual orientation," and it
warned of the harm which might be created if the state's exercise of its
police power was impeded. 60 Fair Empl. Prac. Cas. at 808.

In recent developments in this case, the District Court dismissed
plaintiffs' case finding it was not ripe, based on the state's affidavit
that it would not enforce the Act against the institutional plaintiffs as
churches or the pastor plaintiff in his capacity as a clergyman. The Third
Circuit affirmed the dismissal against the institutional plaintiffs as not
ripe, but reversed as to the individual pastor since the state has expressly
refused to offer any assurances it will not prosecute the pastor if he
violates the Act outside his church. Presbytery of N.J. of Orthodox Church
v. Florio, 40 F.3d 1454 (3rd Cir. 1994).

(1) A California appellate court, however, recently upheld a Boy Scout
troop's denial of a homosexual applicant to become a scoutmaster based on
the organization's belief that homosexuality is unclean and immoral. Curran
v. Mount Diablo Council of the Boy Scouts, 23 Cal. App. 4th 1307, 29 Cal.
Rptr. 2d 58 (1994), review granted, 1994 Cal. LEXIS 3108 (June 2, 1994). The
appellate court reversed the trial court's determination that the Boy Scouts
were a business organization for purposes of the operative Unruh Act on
civil rights.

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23 Cal. App. 4th at 1341-1345.

The court acknowledged the organization's firm stand against homosexuality
and recognized the organization's First Amendment right to associate based
on that stand. Id. at 1324-1329. Forcing the Boy Scouts to accept an
applicant whose homosexual status is openly contrary to a basic tenet of the
organization would violate the organization's constitutional right to choose
the members of its association. Id. at 1326-1329. The California Supreme
Court has granted review of this case.

1. Analysis of Selected State and Local Statutes

a. New York

The New York State Human Rights Law does not prohibit sexual orientation
discrimination. Under 21 v. New York City, 65 N.Y.2d 344, 492 N.Y.S.2d 522
(1985); see also Petri v. Bank of New York Inc., 153 Misc. 2d 426, 582
N.Y.S.2d 608, 610 (Sup. Ct. N.Y. County 1992).

However a bill prohibiting sexual orientation discrimination in private
employment in New York is pending in the state legislature. New York
Assembly Passes Sexual Orientation Bill, Daily Lab. Rep. (BNA) No. 21,
February 3, 1993, A-20.

Moreover, because many cities and counties in New York have such laws,
approximately seventy percent of New York State residents live in
jurisdictions where sexual orientation discrimination is outlawed.
Lesbian/Gay Law Notes, January 1993.

i. New York City's Antidiscrimination Law

New York City has a sexual orientation antidiscrimination law resembling
many state antidiscrimination laws. N.Y. City Admin. Code  8-107 (1986). It
contains an exemption for religious employers and employers with fewer than
four employees. N.Y. City Admin. Code  8-107.12, 8-107.16 (Supp. 1993). It
also states that it does not permit or require employers to establish quotas
or inquire into the sexual orientation

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of employees or job applicants. N.Y. City Admin. Code  8-107.16 (Supp.
1993).

(1) Discrimination Based on

Transsexuality Prohibited

While New York City's antidiscrimination law does not include
"transsexuality" in its definition of "sexual orientation," the creation of
a hostile work environment as a result of derogatory comments relating to
the fact that, as a result of an operation an employee changed his or her
sexual status, creates discrimination based on "sex" in violation of N.Y.
City Admin. Code  8- 107. Maffei v. Kolaeton Industry, Inc., 626 N.Y.S.2d
391 (1995).

a. California

Although gay men and lesbians were not formally protected by legislation in
California, beginning in 1979 the courts held that gay men and lesbians were
entitled to certain protection under California law.

i. The first California case holding that gay men and lesbians are protected
from dis- crimination was Gay Law Students Ass'n v. Pacific Tel. & Tel. Co.,
24 Cal. 3d 458, 595 P.2d 592, 156 Cal. Rptr. 14 (1979). The court held that
Sections 1101 and 1102 of the Labor Code, which bans employers from
controlling or limiting the political activities or affiliations of their
employees, extended to gay men and lesbians. Cal. Lab. Code  1101, 1102.

The court reasoned that "the struggle of the homosexual community for equal
rights, particularly in the field of employment, must be recognized as
political activity," and that any policy that penalizes people who are
openly gay violates the Labor Code. Gay Law Students Ass'n, 24 Cal. 3d at
488, 595 P.2d at 610, 156 Cal. Rptr. at 32-33. The defendants' policy of
discriminating "in particular against persons who identify themselves as
homosexual, who defend homosexuality, or who are identified with activist
homosexual organizations," the court found, was such a policy. 24 Cal. 3d at
488.

The California Attorney General later extended this holding and found that
Sections 1101 and 1102 of the Labor Code prohibit dis-

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crimination in employment against employees on the basis of their sexual
orientation. 69 Op. Att'y Gen. 80 (1986). The analysis utilized in Gay Law
Students Ass'n has been followed in a number of cases.

(1) Shell Oil Company fired Jeffrey Collins after discovering a memo that he
had printed on a company computer pres- cribing safe sex procedures for gay
men to follow at a private party. Collins v. Shell Oil Co., 1991 Cal. App.
LEXIS 783, 56 Fair Empl. Prac. Cas. (BNA) 440 (Cal. Super. Ct., App. Dep't
1991). The court found that in the context of the AIDS crisis in the San
Francisco area at the time Collins' memo was printed, his action was a
political activity protected under Sections 1101 and 1102 of the Labor Code
and, therefore, Shell Oil could not dismiss him for writing the memo, even
if it were entitled to do so under his employment contract.

The court awarded Collins $2,000,000 in punitive damages for his intentional
infliction of emotional distress claim, $2,523,229 in economic damages on
his contract causes of action, and $800,000 in compensatory damages under
his tort causes of action.

(1) In Smedley v. Capps, Staples, Ward, Hastings & Dodson, 820 F. Supp. 1227
(N.D. Cal. 1993), the law firm of Capps, Staples, Ward, Hastings and Dodson
fired plaintiff after she was quoted in a newspaper article as saying that
"being out" at the office would help other lesbian attorneys fight
discrimination. Smedley claimed that her supervisor had previously
instructed her not to discuss her sexual orientation at the firm's social
events.

Applying Sections 1101 and 1102 of the California Labor Code, a federal
district judge refused to grant summary judgment to the plaintiff, ruling
that issues of fact remained regarding the defendant's policy, the reasons
for its termination of plaintiff, and whether its actions violated the Labor
Code.

Although not ruling definitively on the issues in this case, the court
preliminarily explored the merits of the

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claims. It stated that preventing the plaintiff from discussing gay rights
with other employees or ordering her to limit her activities in the gay
community outside of the office might well constitute violations of Labor
Code Sections 1101 and 1102. Id. at 1229- 1230. The court was skeptical,
however, whether conversations regarding lesbianism with clients at the
firm's social events were protected political activities.

i. State Legislative Developments

In 1992, the California legislature enacted a bill prohibiting sexual
orientation discrim- ination in private employment. Cal. Lab. Code  1102.1
(effective Jan. 1, 1993).

The law exempts religious employers and employers with fewer than five
employees from its prohibitions. It explicitly states that it does not
invalidate any marital status classifications that are otherwise valid, does
not supersede any existing rights that employers have to base their
decisions on illegal conduct by employees, and does not require or allow the
use of quotas. Id.

Although this law is too recent to have been interpreted widely by the
courts, but there have already been at least five cases filed under it. See,
Five Lawsuits Filed to Test New California Gay Rights Law, Daily Lab. Rep.
(BNA) No. 4, Jan. 7, 1993, A-6:

(1) William Ballou has claimed that he was called "faggot bitch," instructed
to harass apparently gay customers, and told to fire a gay employee. He was
subsequently fired himself. Ballou v. Callendar, No. 710477-2 (Cal. Super.
Ct., filed Jan. 4, 1993).

(2) Joe Magnano has claimed he was fired after one manager told him to leave
the company because if he caught AIDS, it would be very expensive for the
company and another manager said he could not work with homosexuals. Magnano
v. Brown & Haley Co., No. 948424 (Cal. Super. Ct., filed Jan. 4, 1993).

Although not binding, the California Labor Commissioner has stated in a
clarifying letter that the law is not limited to

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protecting individuals who are in fact gay. It also protects those gay men
and lesbians who are perceived as straight and those straight individuals
who are perceived as being gay.

A plaintiff must first exhaust all available administrative remedies before
bringing an action for discrimination based on sexual orientation under Lab.
Code  1101, 1102 and 1102.1. Liebert v. Transworld Systems, Inc., 32
Cal.App.4th 1693, 1699 (1995).

i. Local Legislative Developments

Many cities and counties in California have enacted local laws prohibiting
sexual orientation discrimination in private employment. A state court
recently found that these laws are preempted by the Fair Employment and
Housing Act, (FEHA), Cal. Gov't Code  12900 et seq., which regulates
discrimination in private employment. Delaney v. Superior Fast Freight, 14
Cal. App. 4th 590, 18 Cal. Rptr. 2d 33 (1993).

Although the FEHA does not bar sexual orientation discrimination, plaintiffs
who would previously have sought a remedy under city and county laws can now
turn to Section 1102.1 of the Labor Code. The Delaney court stressed that it
was important to have a uniform system of antidiscrimination law throughout
the state.

Plaintiff's attorneys have argued, however, that local laws provide remedies
such as attorneys' fees and punitive damages not available under the Labor
Code and, therefore, pre-emption is disadvantageous. California Gay Rights
Ordinances Pre-empted by State Law, Court Rules, Daily Lab. Rep. (BNA) No.
61, Apr. 1, 1993, C-1.

i. Privacy Cause of Action

Employers who ask employees questions regarding sexual orientation may risk
being sued on the basis of the employee's for their right to privacy under
California law. Soroka v. Dayton Hudson Corp., 18 Cal. App. 4th 1200, 1 Cal.
Rptr. 2d 77 (1991), review granted, 4 Cal. Rptr. 2d 180 (Cal. 1992), review
dismissed, 24 Cal. Rptr. 2d 587 (Cal. 1993). In Soroka, the plaintiffs
challenged the use of the Psychscreen employment application test which
included questions

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designed to reveal the applicant's sexual orientation.

Questions included: "I am very strongly attracted by members of my own
sex....I have often wished I were a girl. (Or if you are a girl) I have
never been sorry that I am a girl....I have never indulged in any unusual
sex practices....I am worried about sex matters." 13 Cal.App.4th at 197, 1
Cal.Rptr.2d at 82.

The employer asserted that the test measured emotional fitness and that
employee quality improved after it began using the test.

The Court of Appeals held that this assertion was inadequate to show either
a compelling interest or the necessary nexus between the employee's duties
and the invasion of privacy and ruled that the practice of asking the
questions of this sort violated Labor Code Sections 1101 and 1102. Id.

In July 1993, the employer agreed to pay over two million dollars to settle
the case.

i. Wrongful Discharge in Violation of Public Policy

In addition to the protections under Lab. Code  1101, 1102 and 1102.1, a
California court of appeals has found a non-statutory, common law claim
sounding in tort for a violation of a fundamental public policy for
discrimination based on sexual orientation. Liebert v. Transworld Systems,
Inc., 32 Cal.App.4th 1693, 1703-04 (1995).

a. District of Columbia

The District of Columbia banned sexual orientation discrimination in private
employment in 1977. D.C. Code Ann.  1-2501 et seq. The D.C. Human Rights
Act is a fairly standard act with the customary exemption for religious
employers. (See D.C. Code Ann.  1-2503(b). There are, however, several
distinct features in the D.C. law.

i. Outlaws Preference for Homosexuals

The D.C. Human Rights Act defines sexual orientation as "male or female
homosexuality, heterosexuality and bisexuality, by preference or practice."
D.C. Code Ann.  1- 2502(28). Consequently, it bars both dis-

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crimination against and preferential treatment for homosexuals.

(1) In a recent case interpreting this provision, a nurse at Howard
University Hospital claimed that she was fired because she complained of a
hostile work environment fostered by lesbian co- workers and supervisors.
Green v. Howard University, No. 91-CA04194 (D.C. Super. Ct. Dec. 4, 1992).

While a jury accepted her contention and awarded her $140,000, the Court of
Appeals reversed. In Howard University v. Green, 652 A.2d 41 (1994), the
District of Columbia Court of Appeals found there was nothing in the record
to suggest that the University was alerted that plaintiff actually
complained of sexual orientation discrimination. In addition, the court
noted in a footnote that "although heterosexuals are and should be covered
[by D.C.'s Human Rights Act], the main purpose of the sexual orientation
provision was to ensure that homosexuals enjoy equal rights previously
denied to them." Id. at 49 n. 12.

The jury, accepting her contention, awarded her $140,000 and ordered Howard
University either to reinstate her or to offer her an equivalent position.
Court Sustains Jury Award for Alleged Lesbian Conspiracy to Fire
Heterosexual, 1993 Daily Lab. Rep. (BNA) No. 3, Jan. 6, 1993, A-6.

i. Prohibits Unintentional Discrimination

The D.C. statute provides that "[a]ny practice which has the effect or
consequence of violating any of the provisions of this chapter shall be
deemed to be an unlawful discriminatory practice." D.C. Code Ann.  1-2532.

The D.C. Court of Appeals has interpreted this provision as prohibiting
unintentional discrimination that has a disproportionate impact on a
protected class and cannot be justified for a nondiscriminatory reason. Gay
Rights Coalition of Georgetown Univ. Law Ctr. v. Georgetown Univ., 536 A.2d
1, 29 (D.C.App. 1987). The statute thus incorporates the disparate impact
analysis

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established by the Supreme Court in Griggs v. Duke Power Co., 401 U.S. 424
(1971).

i. Transsexuality Not Protected

D.C.'s Human Rights Act does not prohibit discrimination based on an
individual's status as a transsexual, because "transsexuality" is not
included in the Act's definition of "sex." Underwood v. Archer Management
Services, Inc., 857 F.Supp. 96, 98 (D.D.C. 1994).

a. Miscellaneous State Cases

i. Pennsylvania

In an usual case in Pennsylvania, DeMuth v. Miller, 652 A.2d 891 (Pa. Super.
Ct. 1995), an employer filed suit against a former employee for violating a
covenant not to compete clause in the employee's contract. The covenant was
triggered when the employee was fired for cause: being a homosexual. There
was no dispute that the employee was fired because he was gay. The superior
court of Pennsylvania affirmed the jury verdict in favor of the employer.
The court avoided the question whether it was enforcing contractual
"private" discrimination, by holding that the money damages awarded the
employer were for violation of the non-compete clause, and not because the
defendant was gay. The court also held that the non-compete clause did not
violate policy because discrimination based on sexual orientation is "legal"
in Pennsylvania.

Demuth raises the question whether court enforcement of private contracts
that facially discriminate against gay men and lesbians constitutes state
action for constitutional analysis. See Shelly v. Kraemer, 334 U.S. 1 (1948)
(judicial enforcement of private contracts, where such enforcement furthers
private discrimination, constitutes state action and may result in a denial
of equal protection).

i. Minnesota

In Hanke v. Safari Hair Adventure, 512 N.W.2d 614 (Minn. App. 1994), the
court held that harassment based on an employee's sexual orientation
provides an employee with good cause to quit if the harassment creates an
offensive working environment and the

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employer knows or should know of the harassment, but fails to take timely
and appropriate action. Plaintiff, therefore, was not disqualified from
receiving unemployment compensation benefits.

A. Remedies Under Other Legal Theories

In addition to Title VII and state and local antidis- crimination laws,
there are potential remedies available to gay men and lesbians dismissed by
private employers in jurisdictions recognizing theories of dismissals which
contravene public policy and implied contractual obligations.

1. Public Policy Violation

Courts have found that certain dismissals are against public policy and thus
subject employers to potential liability. Sexual Orientation and the Law,
supra, at 1577. They are most likely to do so where the public policy is
contained in a specific statute. Id. It is possible that courts too will
find that dismissals of gay men and lesbians violate a public policy
favoring privacy, particularly where the right to privacy is contained in
the state constitution. Id.

1. Implied Contractual Provisions

Courts have found that nondiscrimination statements in employee handbooks
create implied contractual provisions with which employers must comply.

As more employers develop and disseminate nondis- crimination policies, this
is an increasingly important area. A recent study of members of the Society
for Human Resource Management found that sixty-three percent of employers
had policies regarding nondiscrimination on the basis of sexual orientation,
half of which were written. Lesbian/Gay Law Notes at 26 (April 1993).

In one reported case involving an employee who was dismissed for his
homosexuality, an individual contract claim was rejected by the Fifth
Circuit based on Texas law. Joachim v. AT&T Info. Sys., 793 F.2d 113 (5th
Cir. 1986). However, Texas law has subsequently changed so it is possible
that the Fifth Circuit would decide the same claim differently today. Sexual
Orientation and the Law, supra, at 1578 n.156.

A. Public Employees: Constitutional Standards

Because their employer is the government, public

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employees have constitutional protections unavailable to private employees,
including the rights to due process and equal protection under the Fifth and
Fourteenth Amendments and the right to freedom of expression under the First
Amendment. These protections may be overcome, however, by other governmental
interests.

1. Due Process

a. Procedural Due Process

When government employees have a property interest in their jobs or when the
dismissal violates a protected liberty interest, government employees cannot
be dismissed from their jobs without due process. Perry v. Sindermann, 408
U.S. 593, 599 (1972); see also Sexual Orientation and the Law, supra, at
1574.

i. Property Interest

A property interest exists when "rules and understandings [officially]
promulgated and fostered [might create a] legitimate claim of entitlement to
continued employment." Perry v. Sindermann, 408 U.S. at 602. In jobs where
government regulations state that homosexuality is a ground for dismissal,
gay male or lesbian employees are often unable to show an expectation of
continued employment, and thus a property interest. See, e.g., Beller v.
Middendorf, 632 F.2d 788, 805 (9th Cir. 1980) (citing Berg v. Claytor, 436
F. Supp. 76, 81 (D.D.C. 1977), vacated, 591 F.2d 849 (D.C. Cir. 1978))
("Plaintiff has admitted to having performed homosexual acts while in the
Service. Having admitted there was cause for dismissal, plaintiff's
expectation of continued employment has been extinguished. Thus he had no
property interest...."), cert. denied, 454 U.S. 855 (1981); Rich v.
Secretary of the Army, 735 F.2d 1220, 1226 (10th Cir. 1984); Doe v. Gates,
981 F.2d 1316, 1320 (D.C. Cir. 1993).

When a governmental employer cannot establish a clear policy against
employing homosexuals, however, plaintiffs who can point to evidence
creating an expectation of continued employment may prevail. For example, a
gay mailroom employee of the FBI was able to show that he had a reasonable
expectation of continuing his employment as long as his work remained
satisfactory. Ashton v. Civiletti, 613 F.2d 923, 928 (D.C. Cir. 1979).

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i. Liberty Interest

A liberty interest is implicated if a dismissal seriously damages an
individual's standing or associations in his/her community or impose a
stigma that would foreclose his/her ability to take advantage of other
employment opportunities.

The issue arises in cases where gay men and lesbians are "outed" by their
former employers or where they are fired on the basis of their sexual
orientation in such a way that they are unattractive to future employers.
See, e.g., Beller, 632 F.2d at 806 (plaintiffs discharged from the Army on
account of their sexual orientation asserted that they received the stigma
of "unfitness" for retention, and that permanent Navy files contained the
reason for their discharge); Rich, 735 F.2d at 1226 (plaintiff who was
honorably discharged from the Army on the basis of his sexual orientation
and fraudulent entry, claimed that the Army's dissemination of information
precluded him from obtaining unemployment benefits and civilian employment).

Courts have rejected plaintiffs' assertions that their liberty interests
have been violated in the course of dismissals for homosexuality on several
grounds. First, they have rejected the contention that the government
actually made the employee's sexual orientation public, finding that the
plaintiffs admitted their homosexuality themselves or consented to the
employer's release of the information. Beller, 632 F.2d at 807 (stressing
that plaintiffs admitted to performing homosexual acts); Rich, 735 F.2d at
1227 (emphasizing that plaintiff publicized his sexual orientation and
consented to the Army's release of information); Childers v. Dallas Police
Dep't, 513 F. Supp. 134, 145 (N.D. Tex. 1981) (any harm that plaintiff
suffered came from his own admission of his sexual orientation).

Secondly, when plaintiffs are discharged honorably or the reasons for the
discharge were kept secret, courts conclude that the plaintiffs were not
actually damaged. Rich, 735 F.2d at 1226, n.5 (liberty interest not violated
by an honorable discharge from the Army); Beller, 632 F.2d at 806-07
(liberty interest not violated where reasons for

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honorable discharge were not indicated on papers likely to be examined by
future employers).

a. Substantive Due Process

i. Arbitrary and Capricious

Some courts have ruled that employees may not be dismissed from public
employment on the grounds of homosexuality where there is no "nexus" between
homosexuality and suitability for employment. See, e.g., Norton v. Macy, 417
F.2d 1161, 1164 (D.C. Cir. 1969); benShalom v. Secretary of Army, 489 F.
Supp. 964, 976-77 (E.D. Wis. 1980). Such dismissals, the courts find, are
arbitrary and capricious and thus violate substantive due process.

i. Privacy

Plaintiffs have also invoked the protections of substantive due process by
charging that the homosexual conduct prohibited by military or other
government regulations is protected as an aspect of the fundamental right of
privacy. See, e.g., Beller, 632 F.2d at 807.

Courts have often rejected these arguments, concluding that even if
homosexual conduct is protected, important governmental interests outweigh
the protections. See also Beller, 632 F.2d at 811 (citing government
interests in protecting culture of the military, maintaining discipline,
protecting integrity of the recruiting process, ensuring the acceptance of
military personnel by people in other countries); Childers, 513 F. Supp. at
142 (stressing police department's interest in maintaining discipline and
protecting the integrity of the police department).

In 1986 the Supreme Court ruled that homosexual sexual activity is not
protected under the fundamental right of privacy. Bowers v. Hardwick, 478
U.S. 186 (1986). Relying on this decision, a number of courts have rejected
substantive due process challenges to dismissals on the basis of sexual
orientation on the grounds that there simply is no protection for homosexual
sexual activity. See, e.g., Woodward v. United States, 871 F.2d 1068,
1074-75 (Fed. Cir. 1989), cert. denied, 494 U.S. 1003 (1990); Ben-Shalom v.
Marsh, 881 F.2d 454 (7th Cir. 1989), cert. denied, 494 U.S. 1004 (1990).

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1. Equal Protection

a. Suspect Class

The issue whether gay men and lesbians are a protected class has divided the
judiciary. Although a number of lower courts have ruled that gay men and
lesbians are protected and that discrimination against them must be
subjected to heightened scrutiny, most of these rulings have been overturned
on appeal.

See, e.g., Ben-Shalom v. Marsh, 703 F. Supp. 1372, (E.D. Wis. 1989), rev'd,
881 F.2d 454, 463 (7th Cir. 1989); High-Tech Gays v. Defense Indus. Sec.
Clearance Office, 668 F. Supp. 1361 (N.D. Cal. 1987), rev'd in part, vacated
in part, 895 F.2d 563, 571 (9th Cir. 1990); Jantz v. Muci, 759 F. Supp.
1543, 1551 (D. Kan. 1991), rev'd and remanded on other grounds, 976 F.2d 623
(10th Cir. 1992); Watkins v. U.S. Army, 847 F.2d 1329, 1352-53 (9th Cir.
1988), aff'd on other grounds, 875 F.2d 699, 705 (9th Cir. 1989) (en banc).
No Circuit Court of Appeals has ruled that gay men and lesbians are entitled
to heightened equal protection scrutiny.

As in the substantive due process area, many courts read Bowers as
precluding the possibility that gay men and lesbians are entitled to
heightened scrutiny under equal protection analysis. See, e.g., Woodward v.
U.S., 871 F.2d at 1068, 1075-76 (Fed. Cir. 1989); Padula v. Webster, 822
F.2d 97, 102-03 (D.C. Cir. 1987).

a. Rational Basis Review

Even if sexual orientation discrimination is not subject to heightened
scrutiny, courts must still apply the rational basis standard in reviewing
the government's action. Swift v. United States, 649 F. Supp. 596, 602
(D.D.C. 1986) ("the government may not dis- criminate against homosexuals
for the sake of discrimination, or for no reason at all"). Many courts have
allowed discrimination by the military, by agencies granting security
clearances, and by public schools to survive rational basis review because
they believe the government has special interests.

Several courts have recently applied "active rational relationship scrutiny"
to sexual orientation discrimination, forcing the

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government, especially the military, to show a rational relationship between
the discrim- ination and the government's interest, instead of merely
assuming its existence. See, e.g., Pruitt v. Cheney, 963 F.2d 1160,
1165-1166 (9th Cir. 1991), cert. denied, 113 S. Ct. 655 (1992); High Tech
Gays v. Defense Indus. Sec. Clearance Office, 895 F.2d 563, 575 (9th Cir.
1990); Dubbs v. CIA, 769 F. Supp. 1113 (N.D. Cal. 1990); Buttino v. FBI,
1992 U.S. Dist. LEXIS 4659 (N.D. Cal. 1992).

Applying this standard of review, one district court has invalidated sexual
orientation discrimination by the military under rational basis scrutiny.
Cammermeyer v. Aspin, 1994 U.S. Dist. LEXIS 7289, *47-*48 (W.D. Wash. June
1, 1994) ("[t]he Government, for its part, has failed to offer any evidence
showing that its justifications are based on anything but prejudice."). The
Ninth Circuit allowed an Army Reserve officer's challenge to sexual
orientation discrimination to survive a defense motion for summary judgment.
Pruitt, supra (denying summary judgment to defendant Secretary of Defense on
the grounds that he must establish that his policy of discrimination on the
basis of sexual orientation has a rational basis).

1. First Amendment Right to Freedom of Speech

Dismissals of gay and lesbian employees often stem from statements that the
employees have made. If such statements touch on a matter of "public
concern," it will be protected speech for which employees cannot be
dismissed. Pickering v. Board of Educ., 391 U.S. 563, 568 (1968). If the
speech does touch on public concerns, the courts must balance the employee's
interest in free speech against the state's interest in regulating its
employees. Id. The issue arises often with military employees and public
school teachers.

Courts have generally ruled that where employees merely stated that they are
homosexual, they are making an admission of personal, not public, interest,
and their speech is not protected. See, e.g., Johnson v. Orr, 617 F. Supp.
170, 175 (E.D. Cal. 1985) (calling plaintiff's First Amendment claim
specious because her assertion of her homosexuality was a mere statement of
fact), aff'd without op., 787 F.2d 597 (9th Cir. 1986); Pruitt v. Cheney,
963 F.2d 1160, 1164 (9th Cir. 1991) (plaintiff was dismissed not for the
content of

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her newspaper statement that she was gay but rather for being a lesbian);
Rowland v. Mad River Local Sch. Dist., 730 F.2d 444, 449 (6th Cir.
1984)(plaintiff's statements regarding her sexual preference were not
protected speech, however, because she was speaking only in her own
interest), cert. denied, 470 U.S. 100 (1985). Justice Brennan criticized
this approach, concluding that a debate is raging regarding the rights of
gay men and lesbians and that once a person asserts his or her homosexuality
he or she is "necessarily and ineluctably involved...in that debate" and his
or her statements are thus a matter of public concern. Rowland v. Mad River
Local Sch. Dist., 470 U.S. 1009, 1012 (1986) (Brennan, J. dissenting).

When employees advocate gay rights instead of asserting their sexual
orientation, their speech is generally protected. Examples include:

a. A state statute prohibiting teachers

from "advocating, soliciting, imposing, encouraging or promoting public or
private homosexual activities" was found constitutionally overbroad and
violative of the First Amendment. National Gay Task Force v. Board of Educ.,
729 F.2d 1270, 1272 (10th Cir. 1984), aff'd, 470 U.S. 903 (1985).

b. A university lecturer's statements

regarding homosexuality that were publicized in a series of newspaper
articles, was protected speech. Aumiller v. University of Del., 434 F. Supp.
1273, 1302 (D. Del. 1977).

c. An assistant county treasurer was fired

after he sought to leave work to address the local Commissioners Court
regarding homosexuality. The court found that his desire to speak
constituted protected activity. Van Ooteghem v. Gray, 654 F.2d 304 (5th Cir.
1981), cert. denied, 455 U.S. 909 (1982).

Some courts, however, have viewed activism in pursuit of gay rights not as
protected speech under the First Amendment but as conduct which government
employers are free to prohibit if it reflects badly on them. McConnell v.
Anderson, 451 F.2d 193, 196 (8th Cir. 1971), cert. denied, 405 U.S. 1046
(1972).

A. Public Employees: Government Interests

1. Teachers

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In the realm of public schools, the government asserts a wide range of
interests to overcome rational basis review and teachers' free speech
protections. Some courts have held that when schools employ openly gay men
and lesbians, they are tacitly forced to approve of their behavior.
McConnell v. Anderson, 451 F.2d 193, 196 (8th Cir. 1971), cert. denied, 405
U.S. 1046 (1972). Courts have held that the school's interests in avoiding
such tacit approval overcomes plaintiff's First Amendment rights. Id. at
196. Other courts have ruled that teachers have an obligation to go out of
their way to hide their private lives and that openly gay men and women
violate this obligation. Acanfora v. Board of Educ. of Montgomery County,
359 F. Supp. 843 (D. Md. 1973), aff'd on other grounds, 491 F.2d 498 (4th
Cir. 1974).

Some courts uphold dismissals under school immorality provisions. Gaylord v.
Tacoma Sch. Dist., 88 Wash. 2d 286, 559 P.2d 1340, cert. denied, 434 U.S.
879 (1977) (en banc) (holding homosexuality immoral despite repeal of sodomy
statute). The difficulty of defining morality makes this approach
particularly troublesome. For example, the Oregon Supreme Court twice
remanded a case to an administrative court with instructions on how to
interpret "immorality." Ross v. Springfield Sch. Dist., 294 Or. 357, 657
P.2d 188 (1982); Ross v. Springfield Sch. Dist., 300 Or. 507, 716 P.2d 724,
728 (1986).

Some courts have rejected the classification of immorality as broad and
vague and have instead looked at "fitness to teach." Board of Educ. of Long
Beach v. Jack M., 19 Cal. 3d 691, 696, 566 P.2d 602, 604, 139 Cal. Rptr.
700, 702 (1977). These courts adopt for state employment the due process
rational relationship test that the D.C. Circuit developed for federal civil
service employment. Norton v. Macy, 417 F.2d 1161, 1164 (D.C. Cir. 1969).
Under this standard the California court prevented the dismissal of a gay
male teacher who participated in public, criminal homosexual behavior when
the school was unable to show that he was unfit to teach. Id.; see also
Morrison v. State Bd. of Educ., 1 Cal. 3d 214, 461 P.2d 375, 82 Cal. Rptr.
175 (1969) (disallowing dismissal of gay male teacher who participated in
nonpublic homosexual behavior).

1. The Military and Local Police Departments

Many courts have found that discrimination by the military survives rational
basis review because of the special needs of the military. See, e.g.,
Dronenburg v. Zech, 741 F.2d 1388, 1398 (D.C. Cir.

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1984); Woodward v. U.S., 871 F.2d 1068, 1077 (Fed. Cir. 1989). Enumerated
needs include maintaining discipline, order, morale, and trust among service
members, aiding in recruiting and retention of personnel, shoring up the
rank and command system, and preventing security breaches. Dronenburg, 741
F.2d at 1398.

Many of the arguments supporting government interests that have been used
for the military have also been used by local police departments. See, e.g.,
Childers v. Dallas Police Dept., 513 F. Supp. 134 (N.D. Tex. 1981).
Recently, however, several police departments have settled cases brought
under local laws.

a. In February 1993 three police officers

who charged that they had been forced to leave the Los Angeles Police
Department because of harassment by other officers settled their case for
$700,000. Bettina Boxall, L.A. Settles Officers' Suit, L.A. Times, February
11, 1993, at A1. As part of the settlement the defendants agreed to engage
in active recruitment of gay officers, to eliminate recruitment questions
that would reveal sexual orientation, to prohibit harassment of gay and
lesbian officers, to train officers in how to deal with the gay and lesbian
community and gay and lesbian co- workers, and to screen out homophobic job
applicants. Id.

b. In late 1992 the San Diego County

Sheriff's Department settled a lawsuit brought by a lesbian employee. As
part of the settlement the department agreed to ban sexual orientation
discrimination and to conduct sensitivity training. Lesbian/Gay Law Notes,
January 1993.

1. Security Clearance

The CIA and the FBI contend that they have important interests in denying
security clearances to gay men and lesbians who, they assert, are especially
susceptible to blackmail. For example, in 1990 the Department of Defense
convinced the Ninth Circuit that homosexuals are vulnerable because they are
targeted for blackmail by the KGB. High Tech Gays v. United States, 895 F.2d
563, 575-77 (9th Cir. 1990). Courts have even held that it is constitutional
to deny security clearances to openly gay men and women because they are
subject to blackmail to protect their partners. Padula v. Webster, 822 F.2d
97, 104 (D.C. Cir. 1987). Recently, however, a district

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judge questioned the continuing validity of such discrimination "in light of
the post-High Tech Gays demise of the Soviet Union and the uncertain future,
if any, of the Soviet Secret Police." Buttino v. F.B.I., 1992 U.S. Dist.
LEXIS 4659, at *25 (N.D. Cal. 1992).

I. Sexual Orientation Harassment

A. Overview

Conditioning job benefits or continued employment on the granting of sexual
favors is discrimination on the basis of sex and is prohibited by Title VII.
An employee will be able to sustain a claim for quid pro quo harassment if
the employee suffers a tangible job detriment as a result of refusing to
submit to the sexual demands of a supervisor. See Koster v. Chase Manhattan
Bank, 687 F. Supp. 848, 861 (S.D.N.Y. 1988).

Hostile environment harassment, however, does not require a showing of
tangible job detriment. Instead, an employee who claims a hostile work
environment may demonstrate that requests for unwelcome sexual favors,
and/or other unwelcome verbal or physical conduct of a sexual nature was
sufficiently severe and pervasive that it interfered with the employee's
ability to fully perform his or her job. Meritor Sav. Bank, FSB v. Vinson,
477 U.S. 57 (1986); Kotcher v. Rosa & Sullivan Appliance Ctr., Inc., 957
F.2d 59, 63 (2d Cir. 1992).

A. Harassment of Men and

Women is Prohibited

The quid pro quo sexual harassment analysis has been applied primarily to
women who are harassed by male supervisors. A number of courts, however,
have held that a male employee also has a cause of action if he is harassed
by a female supervisor. Showalter v. Allison Reed Group, Inc., 767 F. Supp.
1205 (D.R.I. 1991), aff'd on other grounds, 984 F.2d 4 (1st Cir. 1993);
Parrish v. Washington Nat'l Ins. Co., 1990 U.S. Dist. LEXIS 13934 (N.D. Ill.
1990); E.E.O.C. Compliance Manual  615.2(b)(1) ("A man as well as a woman
may be the victim of sexual harassment, and a woman as well as a man may be
the harasser."). Because the purpose of Title VII is to prohibit gender
based discrimination, both men and women are considered a "protected class"
under Title VII.

At least one court has found that it is not a defense to sexual harassment
between members of the opposite sex that the harasser is homosexual. See,
e.g., Alphonse v. Omni Hotels Management Corp., 634 So.2d 836 (La. App.
1994).

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A. Same-Sex Harassment

Recently, the Equal Employment Opportunity Commission ("E.E.O.C.") and
Federal courts have begun to recognize that employees who are harassed by
supervisors and co- workers of the same sex are also protected by Title VII.
If the harassment by a same-sex supervisor is based on treatment due to the
employee's gender, the courts have held that that is discrimination based on
sex. If, however, the harassment is due to the individual employee's actual
or perceived sexual orientation, that harassment is not considered
actionable under Title VII.

The E.E.O.C., while recognizing that sexual harassment can occur between
individuals of the same sex, distinguishes between harassment based on
gender and harassment based on sexual orientation:

The victim does not have to be of the opposite sex from the harasser. Since
sexual harassment is a form of sex discrimination, the crucial inquiry is
whether the harasser treats a member or members of one sex differently from
members of the other sex. The victim and the harasser may be of the same sex
where, for instance, the sexual harassment is based on the victims's sex
(not on the victim's sexual preference) and the harasser does not treat
employees of the opposite sex the same way.

EEOC Comp. Man. (BNA)  615.2(b)(3) (June 1987) (emphasis in original).

A. Same-Sex Harassment:

Quid Pro Quo Cases

If a gay or lesbian supervisor demands sexual favors from an employee of the
same sex, the courts more likely than not will extend Title VII protection
to the individual. If, for example, a male supervisor demanded sexual favors
from a male employee, the employee would have a claim under Title VII. In
that situation, the employee would have been "selected" or singled out for
special treatment, because he was male.

Therefore, he would have been discriminated against because of his gender. A
number of federal courts have held that same-sex quid pro quo harassment is
proscribed by Title VII.

1. Joyner v. AAA Cooper Transp., 597 F. Supp.

537 (M.D. Ala. 1983), aff'd, 749 F.2d 732 (11th Cir. 1984): A male employee
alleged that a male manager made a sexual advance toward him, rejected the
advance and reported the incident. The

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employee alleged that due to his rejection of the manager's advance he was
denied recall rights following a lay-off. The court held that same-sex
harassment violates Title VII and the employee had established that he was
subjected to quid pro quo harassment due to his sex.

2. Wright v. Methodist Youth Servs., 511

F. Supp. 307 (N.D. Ill. 1981): A male employee of a social services
organization alleged that he was terminated after he refused the advances
made by his male supervisor. The court held that the employee had stated a
claim under Title VII because the supervisor made a demand upon a male
employee which would not have been made on a female employee. The
harassment, therefore, was gender based.

3. See also Barbour v. Department of Social

Servs., 198 Mich. App. 183, 497 N.W.2d 216 (1993) (finding that a male
employee who had alleged that his male supervisor had made advances towards
him had stated a claim for sexual harassment under Michigan State
discrimination law).

4. See also Parrish v. Washington Nat'l Ins.

Co., 1990 U.S. Dist. LEXIS 13934 (N.D. Ill. 1990) ("If a plaintiff complains
of unwelcome homosexual advances, the offending conduct is based on the
employer's sexual preference and necessarily involved the plaintiff's
gender, for an employee of the non-preferred gender would not inspire the
same treatment. Thus unwelcome homosexual advances, like unwelcome
heterosexual advances, are actionable under Title VII.").

5. Prescott v. Independent Life and Acc. Ins.

Co., 878 F.Supp. 1545, 1550-51 (M.D. Ala. 1995): Congress chose to use the
unmodified word "sex" when referring to the prohibited discrimination in
Title VII. Had Congress intended to prevent only heterosexual sexual
harassment, it could have used the term "member of the opposite sex" in
Title VII. The gender of the person who requests sexual favors from a
subordinate employee, therefore, is irrelevant under Title VII.

6. Boyd v. Vonnahmen, 1995 U.S. Dist. LEXIS 7542

(S.D. Ill. March 29, 1995) (declining to "read Title VII as applicable only
to heterosexual sexual harassment" in a quid pro quo case).

A. Same-Sex Harassment:

Hostile Work Environment

While Federal courts remain unified in rejecting claims of harassment based
on sexual orientation, there is an

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emerging split among Federal courts whether to recognize same-sex
harassment.

1. Courts Holding Same-Sex Harassment Not

Actionable

a. Hopkins v. Baltimore Gas & Elec. Co., 871 F.Supp. 822 (D.Md. 1994):
Allegations by a male employee that his male supervisor sexually harassed
him over a period of seven years by creating a hostile work environment were
rejected by a federal district court in Maryland. The court held that Title
VII does not protect the victim of sexual harassment by a supervisor or
co-worker of the same gender. The fundamental concept of Title VII, the
court opined, is to make certain that persons of one gender are not treated
as being inferior to persons of the other gender. The male supervisor,
therefore, could not have treated the male employee as inferior because of
his gender, since they are both men.

b. Garcia v. Elf Atochem North America, 28

F.3d 446 (5th Cir. 1994): "Harassment by a male supervisor against a male
subordinate does not state a claim under Title VII even though the
harassment has sexual overtones. Title VII addresses gender discrimination."
See also, Oncale v. Sundowner Offshore Services, Inc., 1995 U.S. Dist. LEXIS
4119 (E.D. La. March 24, 1995); Myers v. City of El Paso, 874 F.Supp. 1546
(W.D. Tex. 1995).

c. Benekritis v. Johnson, 882 F.Supp. 521

(D.S.C. 1995) (same-sex harassment "is not a viable claim under Title VII").

d. Goluszek v. Smith, 697 F.Supp. 1452

(N.D. Ill. 1988): Sexual harassment against male in male-dominated
environment not actionable under Title VII because action would be
inconsistent with Title VII's goal of remedying discrimination and
correcting imbalance of power.

e. NOTE: Even in courts that have found

same-sex harassment claims outside of the scope of Title VII, a plaintiff
may still have a claim for retaliatory discharge. This conclusion draws
support from the statutory mandate 42 U.S.C.  2000e-3(a), which extends a
retaliatory discharge claim to anyone participating in proceedings under
Title VII -- even if the court later concludes that the plaintiff's claim is
not cognizable as a

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matter of law. See, e.g., Benekritis v. Johnson, 882 F.Supp. 521 (D.S.C.
1995); Hopkins v. Baltimore Gas & Elec. Co., 871 F.Supp. 822 (D.Md. 1994).

2. Courts Holding Same-Sex Harassment Actionable

a. Nogueras v. University of Puerto Rico,

1995 U.S. Dist. LEXIS 8958 (D. P.R. June 13, 1995): Allegations by a female
employee that her female supervisor and a female consultant sexually
harassed he by touching her, making sexually-charged remarks, inviting
plaintiff to engage in sexual activity and other similar incidents. Court
rejected defendants argument that Title VII does not same-sex harassment.
"It is clear . . . from the plain language of Title VII, that same-sex
harassment is an unlawful employment practice. . . . Defendants' gender is
irrelevant."

b. EEOC v. Walden Book Co, 885 F.Supp. 1100

(M.D. Tenn. 1995): Same-sex sexual harassment is actionable under Title VII
because it would be "untenable to allow reverse discrimination cases but not
same-sex sexual harassment cases to proceed under Title VII." "Sexual
harassment of a subordinate by a homosexual supervisor of the same sex is an
adverse employment action that the subordinate would not have faced but for
his or her sex."

c. Lamar v. NYNEX Service Co., 1995 WL

421726 (July 11, 1995 S.D.N.Y.): Analyzing merits of same-sex hostile work
environment case under the assumption that such conduct would be actionable
under Title VII if "sufficiently sever or pervasive to alter the conditions
of [the victim's] employment."

d. Pritchett v. Sizeler Real Estate

Management Co., 1995 U.S. Dist. LEXIS 5565 (E.D. La. April 25, 1995):
Notwithstanding the Fifth Circuit's dicta in Garcia, the District Court held
that "[t]o deny a claim of same gender sexual harassment allows a homosexual
supervisor to sexually harass his or her subordinates either on a quid pro
quo basis or by creating a hostile work environment, when a heterosexual
supervisor may be sued under Title VII for similar conduct."

e. McCoy v. Johnson Controls World

Services, 878 F.Supp. 229 (S.D. Ga. 1995) ------------National Journal of
Sexual Orientation Law, Vol. 2, Issue 1 ------------
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(harassment that would not have occurred but for the victimized employee's
sex was harassment "based upon sex" regardless of the harasser's gender).

A. Same Sex Harassment:

Hostility Based on Sexual Orientation Does not Create Environmental
Harassment Claim

The creation of an environment that is hostile to gay or lesbian employees,
i.e., harassment that affects an employee because the employee is a gay man
or lesbian, is not considered gender-based discrimination under Title VII
and is not prohibited.

1. Dillon v. Frank, 1992 U.S. App. LEXIS 766, at

*2-3, 58 Empl. Prac. Dec. (CCH)  41332 (6th Cir. 1992): A male postal
worker filed a Title VII claim based on sex, alleging that he was verbally
and physically harassed by co-workers due to the co-workers' belief that he
was gay. The harassment which persisted over a period of three years
consisted of verbal comments directed toward the employee such as "fag,"
"Dillon sucks dicks," "Dillon gives head" and escalated to a physical
assault on the employee. Although finding that the harassment was "sexual"
in nature, the Sixth Circuit held that harassment based on the sexual
orientation or perceived sexual orientation of an employee is not actionable
under Title VII. The court noted, however, that if the employee could show
that he had been treated differently than a lesbian employee, he might have
an actionable claim as he would then be singled out for unique treatment not
because he was gay but because he was a gay man. 1992 U.S. App. LEXIS 766,
at *27 n.5

2. Carreno v. IBEW, Local No. 226, 54 Fair Empl.

Prac. Cas. (BNA) 81 (D.C. Kan. 1990): A male employee divorced his wife and
began living with another man. As a result, his co-workers and supervisors
verbally and physically harassed the employee over the course of a year. The
employee eventually refused to report to work and alleged that he had been
constructively discharged as a result of the harassment. The Kansas District
Court held that the employee had not established a prima facie case under
either Title VII or state discrimination laws as the discrimination
complained of was based on the employee's sexual orientation rather than on
his gender.

3. Similarly, in Barbour v. Department of Social

Servs., 198 Mich. App. 183, 497 N.W.2d 216 (1993), the Michigan Court of
Appeals held that under Michigan state law, an employee who was harassed

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by co-workers who believed that a male employee was gay failed to state a
claim for sex based dis- crimination.

4. In Fox v. Sierra Development Co., 876 F.Supp.

1169 (D. Nev. 1995), heterosexual male employees alleged hostile work
environment saturated with homosexual references. Court held they did not
allege any discriminatory hostility and thus failed to state a cause of
action under Title VII.

The alleged hostility was not against men or masculinity and was not hostile
on the basis of sex or gender but only hostile to a person's notions of
sexuality and its proper role or place.

This is not actionable under Title VII.

5. Vandeventer v. Wabash Nat'l Corp., 867

F.Supp. 790 (N.D. Ind. 1994): Harassment by males against male homosexual
not actionable under Title VII because Title VII aimed at gender-biased
atmosphere and no evidence that male harassed because he was male.

A. Harassment of Both Sexes

A few courts have considered the question of whether a supervisor who
harasses members of both genders equally violates Title VII.

1. Barnes v. Costle, 561 F.2d 983, 990 (D.C.

Cir. 1977): In considering an allegation of sexual harassment of a female
employee by her male supervisor, the court stated that if a gay supervisor
of either gender had harassed an employee of either gender, the employee
would receive Title VII protection. In either case, the court reasoned, the
employee would have been treated differently because of his/her gender. The
court added that "[i]n the case of a bisexual superior, the insistence upon
sexual favors would not constitute gender discrimination because it would
apply to male and female employees alike." Id. at 990 n.55.

2. Chiapuzio v. BLT Operating Corp., 62 Fair

Empl. Prac. Cas. (BNA) 707 (D.C. Wyo. 1993): In denying a motion for summary
judgment the court described a supervisor who harassed both male and female
as an "'equal opportunity' harasser whose remarks were gender-driven." Id.
at 710. The court distinguished between same-sex and bi-sexual harassment in
that the supervisor was not suggesting that he wanted to perform sexual acts
with the male employees, but rather his harassment took the form of
impugning the male employees'

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sexual prowess.

3. But see, Ryczek v. Guest Services, Inc., 877

F.Supp. 754 (D.D.C. 1995): Criticizing Barnes in dicta. The court recognized
the anomaly of the "particularly unspeakable cad" who would escape Title VII
liability simply because he or she harasses both men and women. Court also
questioned the "troubling possibility" of having the litigants "debate and
juries determine the sexual orientation of Title VII defendants.

A. Local Laws Prohibiting Sexual

Orientation Harassment

Currently, eight states and many cities have municipal ordinances explicitly
proscribing discrimination based on sexual orientation. In those
jurisdictions, employees may have a cause of action for hostile environment
sexual harassment based on sexual orientation.

1. In Mogilefsky v. Superior Court, 20 Cal. App.

4th 1409 (1993), the male plaintiff alleged that his male employer sexually
harassed him by repeatedly inviting him to his hotel room, making sexually
explicit comments after watching pornographic films with him, and referring
to plaintiff in a profane and degrading way. Id. at 1412. The court held
that a cause of action can be stated for same-sex harassment, whether based
on quid-pro-quo or hostile environment theories. Id. at 1418.

2. The Supreme Court, New York County noted, in

the context of a hostile environment sexual harassment suit, that because
discrimination by New York City agencies or representatives against gay men
and lesbians is explicitly prohibited by New York Executive Order No. 4
(1978), "anti-gay or homophobic remarks or actions . . . may also constitute
prohibited discrimination." Rudow v. New York City Comm'n on Human Rights,
123 Misc. 2d 709, 474 N.Y.S.2d 1005, 1014 n.11 (Sup. Ct. N.Y. County 1984),
aff'd, 109 A.D. 2d 1111, 487 N.Y.S.2d 453 (1st Dep't 1985).

3. In Fry's Food Stores of AZ, Inc., 99 Lab.

Arb. Rep. (BNA) 1161 (1992), the arbitrator upheld the company's discharge
of an employee who verbally harassed a gay co-worker. The arbitrator
reasoned that because Tucson, Arizona had an ordinance prohibiting
discrimination on "sexual or affectional preference," the company was
justified in its severe punishment of the employee.

4. A recent opinion letter from the California

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Labor Commission indicates that it interprets the California state statute
prohibiting employment discrimination on the basis of sexual orientation
(Cal. Lab. Code  1102.1) to prohibit hostile environment harassment based
on an employee's sexual orientation. (Op. Let. dated March 8, 1993).

5. In Matthews v. Superior Court, 34 Cal.App.4th

598, 603 (1995), the court held that a heterosexual employee could state a
claim for hostile work environment created by homosexual supervisors based
on California's Fair Employment and Housing Act. Citing Mogilefsky, the
court held that sexual harassment by a member of the same sex constitutes
gender harassment under the FEHA.

1995 Steefel, Levitt & Weiss and Proskauer Rose Goetz & Mendelsohn

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