In a landmark decision, the Seventh Circuit has become the first federal court of appeals to find that Title VII of the Civil Rights Act of 1964 prohibits discrimination against individuals because of their sexual orientation.

In Hively v. Ivy Tech Community College of Indiana, plaintiff Kimberly Hively alleged she was passed over for several full-time positions and then terminated by Ivy Tech Community College because of her sexual orientation. The district court dismissed the case, concluding sexual orientation discrimination did not fall under Title VII. On appeal, the panel expressed concern that Ms. Hively was without recourse, but declared itself bound by precedent that declined to extend Title VII’s protections to sexual orientation. The en banc panel reversed.

A split Seventh Circuit (8-3) held that Title VII's prohibition of "sex" discrimination includes sexual orientation, because Ms. Hively claimed, as with other forms of sex discrimination, she would have been treated differently if she were of a different sex. That is, had she been a man in a relationship with a woman, she would not have been rejected for positions or terminated. The Seventh Circuit also concluded there was no difference between discrimination based on gender nonconformity, which the U.S. Supreme Court long ago held was actionable under Title VII, and sexual orientation, as being in a relationship with a member of the same sex is by definition failing to conform to the gender stereotype that women are in heterosexual relationships with men. In addition, the court drew parallels to associational discrimination, which was held to be unlawful in Loving v. Virginia.

This decision sets up a split among the federal courts of appeals, as the 11th Circuit issued a decision reaching the opposite conclusion last month in Evans v. Georgia Regional Hospital, generating speculation that the issue could be poised for Supreme Court review.