MS Morgan Stanley

By Jess Bravin 

WASHINGTON -- Dozens of businesses asked the Supreme Court on Wednesday to find that federal law bars discrimination based on sexual orientation, putting companies including Apple Inc., Cigna Corp., Morgan Stanley and Viacom Inc. at odds with the Trump administration.

The businesses asked the court to hear the appeal of a lesbian who alleges discrimination at the Savannah, Ga., hospital where she worked as a security officer. The 11th U.S. Circuit Court of Appeals, in Atlanta, dismissed her claim in March, after holding that sex discrimination, which the Civil Rights Act of 1964 prohibits under Title VII, doesn't encompass discrimination based on sexual orientation.

The ruling "has wide-ranging, negative consequences for businesses, their employees and the U.S. economy," the companies told the Supreme Court in a friend of the court brief. "Businesses' firsthand experiences -- supported by extensive social-science research -- confirm the significant costs for employers and employees when sexual orientation discrimination is not forbidden by a uniform law, even where other policies exist against such discrimination."

Other major companies signing the brief include Airbnb Inc., Alphabet Inc.'s Google unit, American Airlines Group Inc., BASF Corp., Deutsche Bank AG, Facebook Inc., Levi Strauss & Co., Microsoft Corp., MasterCard International Inc., salesforce.com inc. and Uber Technologies Inc.

Federal courts are divided on the legal question.

In April, the Chicago-based Seventh Circuit held in an employment case against a South Bend, Ind., community college "that discrimination on the basis of sexual orientation is a form of sex discrimination."

The same month, a three-judge panel of the Second Circuit in New York rejected that position in a suit filed by a skydiving instructor alleging he was fired because he was gay. The full Second Circuit voted to reconsider that decision, and at its September argument saw lawyers from the federal government take contrary positions -- the Equal Employment Opportunity Commission's attorney contended that sexual orientation discrimination was illegal, while the Justice Department lawyer asserted that it was permissible.

Although Congress hasn't passed antidiscrimination laws for gay men and lesbians, their legal status has improved substantially over the past decade due to developments in the judicial and executive branches. A series of Supreme Court rulings struck down discrimination based on sexual orientation, culminating in Obergefell v. Hodges, the 2015 decision that prohibits states from denying marriage rights to same-sex couples.

The Obama administration interpreted civil-rights law against that backdrop, extending protections to gay, lesbian and transgender individuals. Under Attorney General Jeff Sessions, the Justice Department has reversed some of those positions.

The different interpretations of Title VII largely result from how the question is framed. For example, under the Seventh Circuit's approach, the issue would be whether a woman could be penalized for dating a woman while a man wouldn't be penalized for dating a woman. If a man would be treated differently from a woman with all other factors the same, the court concluded, then sex discrimination may be present.

The Trump administration, however, finds no sex discrimination if, for instance, a business refused to employ gay men and lesbians altogether.

"Of course, if an employer fired only gay men but not gay women (or vice versa), that would be prohibited by Title VII -- but precisely because it would be discrimination based on sex, not sexual orientation," the Justice Department said in its Second Circuit brief.

In the brief filed Wednesday, the companies said that private antidiscrimination policies, or the protections for gay men and lesbians that 23 states and numerous local governments have enacted, were insufficient.

"The failure to recognize that Title VII protects LGBT workers hinders the ability...to compete in all corners of the nation and harms the U.S. economy as a whole," they said, using the abbreviation for lesbian, gay, bisexual and transgender individuals.

The Supreme Court hasn't yet indicated when it will consider whether to hear the case, Evans v. Georgia Regional Hospital.

Write to Jess Bravin at jess.bravin@wsj.com

(END) Dow Jones Newswires

October 11, 2017 10:14 ET (14:14 GMT)

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