CFTC Strengthens Anti-Retaliation Protections for Whistleblowers and Improves CFTC Whistleblower Award Program

SEC Whistleblower Program Tips from SEC Whistleblower Attorneys to Maximize an SEC Whistleblower Award

SEC Whistleblower Attorneys Release eBook SEC Whistleblower Program: Tips from SEC Whistleblower Attorneys to Maximize an SEC Whistleblower Award

Dodd-Frank Corporate Whistleblower Protection

Dodd-Frank Corporate Whistleblower Protection

Dodd-Frank Corporate Whistleblower Protection

I. Background of the SEC Whistleblower Program

The Securities and Exchange Commission (“SEC”), via its whistleblower program,[1] awards whistleblowers who report securities-law violations that lead to SEC enforcement actions resulting in more than $1 million in sanctions. See 15 U.S.C. § 78u-6(b)(1). Since the program was implemented in 2011,[2] the SEC has awarded more than $150 million to whistleblowers. The four largest whistleblower awards the SEC has issued are $30 million in September 2014, $22 million in August 2016, $17 million in June 2016, and $14 million in October 2013.

II. Program Requirements

The SEC awards whistleblowers who (1) “voluntarily” provide (2) “original information” that (3) “led to the successful enforcement” (4) of a “covered judicial or administrative action, or related action.” 15 U.S.C. § 78u-6(b)(1).

  • Information is voluntarily provided if the whistleblower has no duty to report it but does so anyway “before a request, inquiry, or demand that relates to the subject matter of [the] submission is directed to [the whistleblower] or anyone representing [the whistleblower] (such as an attorney).” 17 C.F.R. § 240.21F-4(a).
  • A tip constitutes “original information” if it meets three criteria: (1) the information must come from the whistleblower’s “independent knowledge or analysis”; (2) the SEC must not have received the information from any other source; and (3) the information must not be “exclusively derived from an allegation made in a judicial or administrative hearing, in a governmental report, hearing, audit, or investigation, or from the news media.” 15 U.S.C. § 78u-6(a)(3). The second and third requirements do not apply where the whistleblower is the original source of the information. 15 U.S.C. § 78u-6(a)(3)(B)–(C).
    • There is a 120-day lookback period—i.e., where an individual reports his or her information internally and then, within 120 days, reports that information to the SEC, the SEC will treat that information as if it had been reported to the SEC on the date of the internal report. 17 C.F.R. § 240.21F-4(c)(3).
  • There are two standards for determining whether information “led to the successful enforcement” of an action: one applies to information about conduct not under investigation, and another applies to information about conduct already under investigation.
    • Information regarding conduct not under investigation leads to a successful enforcement where it (1) causes the SEC “to commence an examination, open an investigation, reopen an investigation that the Commission had closed, or to inquire concerning different conduct as part of a current examination or investigation,” and (2) the SEC brings a successful action “based in whole or in part on the conduct identified in the original information.” 17 C.F.R. § 240.21F-4(c)(1).
    • Information about conduct already under investigation leads to a successful enforcement where it “significantly contributed” to the action’s success. 17 C.F.R. § 240.21F-4(c)(2). Factors the SEC considers in applying this standard include whether, as a result of the information, the SEC was able to accomplish its successful enforcement action “in significantly less time or with significantly fewer resources,” bring other successful claims, or bring successful actions against others. Exchange Act Release No. 34-64545, 76 Fed. Reg. 34,300, 34,325.
  • A “covered judicial or administrative action” is any SEC action that results in monetary sanctions of more than $1 million. 15 U.S.C. § 78u-6(a)(1). A “related action” is any action that is based on the same information reported to the SEC and is brought by “(I) the Attorney General of the United States; (II) an appropriate regulatory authority; (III) a self-regulatory organization; [or] (IV) a State attorney general in connection with any criminal investigation.” 15 U.S.C. § 78u-6(a)(5), (h)(2)(D)(i)(I)–(IV).

III. Program Benefits

The SEC whistleblower program provides qualifying whistleblowers with (A) monetary rewards, (B) protection against employer retaliation, and (C) confidentiality. 15 U.S.C. § 78u-6(b)(1), (h)(1)(A), (h)(2)(A).

A.   Monetary Rewards

Where all requirements are met, the whistleblower will receive an award of between 10% and 30% of the monetary sanctions collected as a result of the tip. 15 U.S.C. § 78u-6(b)(1). The determination of whether to make an award is subject to appeal. 15 U.S.C. § 78u-6(f). The amount awarded is at the SEC’s discretion. 15 U.S.C. § 78u-6(c)(1)(A). The SEC takes the following into consideration in determining the amount of the award:

(I) the significance of the information provided by the whistleblower to the success of the covered judicial or administrative action;

(II) the degree of assistance provided by the whistleblower and any legal representative of the whistleblower in a covered judicial or administrative action;

(III) the programmatic interest of the Commission in deterring violations of the securities laws by making awards to whistleblowers who provide information that lead to the successful enforcement of such laws; and

(IV) such additional relevant factors as the Commission may establish by rule or regulation.

15 U.S.C. § 78u-6(c)(1)(B)(i). However, there are several categorical exclusions.[3]

B. Anti-Retaliation Provision

Dodd-Frank states the following:

No employer may discharge, demote, suspend, threaten, harass, directly or indirectly, or in any other manner discriminate against, a whistleblower in the terms and conditions of employment because of any lawful act done by the whistleblower—

(i) in providing information to the Commission in accordance with this section;

(ii) in initiating, testifying in, or assisting in any investigation or judicial or administrative action of the Commission based upon or related to such information; or

(iii) in making disclosures that are required or protected under the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7201 et seq.), this chapter, including section 78j-1(m) of this title, section 1513(e) of Title 18, and any other law, rule, or regulation subject to the jurisdiction of the Commission.

15 U.S.C. § 78u-6(h)(1)(A).

1. Who Is Protected from Retaliation?

In 2015, the SEC issued an interpretive rule stating that “for purposes of the employment retaliation protections provided by Section 21F of the Securities Exchange Act of 1934 (‘Exchange Act’), an individual’s status as a whistleblower does not depend on adherence to the reporting procedures specified in Exchange Act Rule 21F-9(a),[[4]] but is determined solely by the terms of Exchange Act Rule 21F-2(b)(1).”[5] Exchange Act Release No. 34-75592, 80 Fed. Reg. 47,829 (Aug. 10, 2015). In other words, with regard to the anti-retaliation provision only, one’s status as a “whistleblower” does not depend on that person’s having reported a suspected violation to the SEC. The SEC is statutorily authorized to issue this type of rules and regulations “to implement the provisions of this section consistent with the purposes of this section.” 15 U.S.C. § 78u-6(j).

Despite the SEC’s guidance, federal courts remain divided as to whether employees must report suspected securities-law violations to the SEC in order to be covered by Dodd-Frank’s whistleblower protections. The Fifth Circuit and a minority of federal district courts have held that, for one to be considered a “whistleblower” under Dodd-Frank’s anti-retaliation provision, he or she must have reported suspected violations to the SEC. See Asadi v. G.E. Energy (USA), LLC, 720 F.3d 620, 625 (5th Cir. 2013). The Second Circuit and a majority of U.S. district courts to have faced this question, on the other hand, have held that one is a “whistleblower” under the anti-retaliation provision even if he or she reports internally and not to the SEC. See Berman v. Neo@Ogilvy LLC, 801 F.3d 145, 155 (2d Cir. 2015).

2. Minority Rule

In July 2013, the Fifth Circuit held that an employee’s complaint was properly dismissed where that employee was fired after reporting a suspected securities-law violation internally but not to the SEC. Asadi, 720 F.3d 620 at 625, 630 (“Under Dodd-Frank’s plain language and structure, there is only one category of whistleblowers: individuals who provide information relating to a securities law violation to the SEC.”). Because the complainant did not report the suspected violation to the SEC, he was held not to be a “whistleblower” under Dodd-Frank’s anti-retaliation provision and so was not covered by the Act’s whistleblower protections. See id. at 630. A minority of U.S. district courts follow this line of reasoning. See, e.g., Puffenbarger v. Engility Corp., No. 1:15-cv-188, 2015 WL 9686978, at *8–9 (E.D. Va. Dec. 31, 2015) (“[B]ecause ‘the intent of Congress is clear,’ as the statute directly and unambiguously limits whistleblower protection to individuals who report to the SEC, it is necessary to ‘give effect to the unambiguously expressed intent of Congress,’ and hence to reject the SEC’s more expansive interpretation of the term ‘whistleblower.’”); Englehart v. Career Educ. Corp., No. 8:14-cv-444-T-33EAJ, 2014 WL 2619501, at *8–9 (M.D. Fla. May 12, 2014) (“Generally, anti-retaliation provisions are construed liberally to protect employees who complain about or report illegal conduct. However, in the context of the Dodd-Frank Reform Act, Congress chose to provide a restrictive definition of ‘whistleblower.’”).

3. Majority Rule

The Second Circuit disagreed with the Fifth Circuit when it held in September 2015 that Dodd-Frank’s protection against retaliation applies not only to those employees who report suspected infractions to the SEC but also to those who report only internally. See Berman, 801 F.3d 145 at 155 (“Under SEC Rule 21F-2(b)(1), [the whistleblower] is entitled to pursue Dodd-Frank remedies for alleged retaliation after his report of wrongdoing to his employer, despite not having reported to the Commission before his termination.”). Most U.S. district courts that have faced this question reached the same conclusion, though with varying logic. See, e.g., Lutzeier v. Citigroup Inc., No. 4:14CV183, slip op. at 2 (E.D. Mo. Nov. 19, 2015) (“Under SEC Rule 21F-2(b)(1), an individual need not report to the Agency to qualify as a whistleblower. Therefore, the Court holds that Lutzeier can pursue Dodd-Frank remedies for alleged retaliation after his report of wrongdoing to his employer, despite not having reported to the Commission.”); Dressler v. Lime Energy, No. 3:14-cv-07060, slip op. at 16 (D.N.J. Aug. 13, 2015) (“[T]he SEC’s interpretation encourages internal reporting of possible securities violations and enhances the agency’s ability to enforce anti-retaliation policies.”); Somers v. Digital Realty Trust, Inc., 119 F. Supp. 3d 1088, 1106 (N.D. Cal. 2015) (“As the SEC has stated, a narrow reading of Dodd-Frank would ‘significantly weaken the deterrence effect on employers who might otherwise consider taking an adverse employment action.’”); Bussing v. COR Clearing, LLC, 20 F. Supp. 3d 719, 729–30 (D. Neb. 2014) (“This interpretation gives effect to the full range of disclosures protected by the anti-retaliation provision, while reserving rewards under the bounty program for whistleblowers who report to the SEC.”); Yang v. Navigators Group, Inc., 18 F. Supp. 3d 519, 534 (S.D.N.Y. 2014) (“[T]he statute does not clearly and unambiguously limit whistleblower protection to individuals who report violations to the SEC where the anti-retaliation provision simultaneously incorporates SOX-protected reporting to supervisors.”); Ellington v. Giacoumakis, 977 F. Supp. 2d 42, 45 (D. Mass. 2013) (“It is apparent . . . that Congress intended that an employee terminated for reporting Sarbanes-Oxley violations to a supervisor or an outside compliance officer, and ultimately to the SEC, have a private right of action under Dodd-Frank whether or not the employer wins the race to the SEC’s door with a termination notice.”).

C. Confidentiality

Generally, the SEC is prohibited from disclosing “any information, including information provided by a whistleblower to the Commission, which could reasonably be expected to reveal the identity of a whistleblower.” 15 U.S.C. § 78u-6(h)(2)(A). Under exceptional circumstances, however, the SEC may disclose this information.[6] Furthermore, with an attorney, whistleblowers can file anonymous reports and remain anonymous, even to the SEC, until an award is to be paid. 17 C.F.R. § 240.21F-7(b).

IV. Particular Award Jason Zuckerman Asked About

On May 13, 2016, the SEC announced a $3.5 million whistleblower award for a tip that “bolstered an ongoing investigation.” Andrew Ceresney, director of the SEC’s Division of Enforcement, was quoted as saying, “Whistleblowers can receive an award not only when their tip initiates an investigation, but also when they provide new information or documentation that advances an existing inquiry.” Mr. Ceresney added that the award-winning tip “increased [the SEC’s] leverage during settlement negotiations.”

As noted above, the plain text of Dodd-Frank Section 922 specifies that, for a whistleblower to be eligible for an award, the information furnished must have “led to the successful enforcement” of an action. 15 U.S.C. § 78u-6(b)(1). Also as noted above, however, the SEC interpreted this requirement as being met where a whistleblower’s tip “significantly contributed” to the success of an ongoing action. Therefore, the SEC appears to have complied with its own guidance in making this award.

Based on Mr. Ceresney’s statement, it seems that the enforcement had already reached settlement negotiations by the time the award-winning tip arrived. So, the question left open is to what degree a tip must increase the leverage of the SEC in settlement negotiations in order for that tip to be said to have “significantly contributed” to the success of the enforcement action.

V. SEC Whistleblower Attorneys

If you have information that you would like to report to the SEC Whistleblower Office, contact an experienced SEC whistleblower attorney at Zuckerman Law for a free, confidential consultation.  Click here or call us today at 202-262-8959.

For more information about the SEC Whistleblower Program, the whistleblower attorneys at Zuckerman Law have authored several articles detailing SEC whistleblower incentives and protections, including:

Footnotes

[1] The Commodity Futures Trading Commission and Internal Revenue Service also have whistleblower programs. See U.S. Commodity Futures Trading Commission Whistleblower Program, https://www.whistleblower.gov; IRS Whistleblower – Informant Award, https://www.irs.gov/uac/whistleblower-informant-award.

 

[2] Dodd-Frank Section 922, passed in 2010, added the modern whistleblower program to the Securities Exchange Act of 1934. 15 U.S.C. § 78u-6. The SEC implemented the program in 2011 with the issuance of final rules. 17 C.F.R. §§ 240.21F-1 et seq.

 

[3] Awards are not made—

(A) to any whistleblower who is, or was at the time the whistleblower acquired the original information submitted to the commission, a member, officer, or employee of—

(i) an appropriate regulatory agency;

(ii) the Department of Justice;

(iii) a self-regulatory organization;

(iv) the Public Company Accounting Oversight Board; or

(v) a law enforcement organization;

(B) to any whistleblower who is convicted of a criminal violation related to the judicial or administrative action for which the whistleblower otherwise could receive an award under this section;

(C) to any whistleblower who gains the information through the performance of an audit of financial statements required under the securities laws and for whom such submission would be contrary to the requirements of section 10A of the Securities Exchange Act of 1934 (15 U.S.C. 78j-1); or

(D) to any whistleblower who fails to submit information to the Commission in such form as the Commission may, by rule, require.

15 U.S.C. § 78u-6(c)(2).

 

[4] Rule 21F-9(a) states the following:

To be considered a whistleblower under Section 21F of the Exchange Act (15 U.S.C. 78u-6(h)), you must submit your information about a possible securities law violation by either of these methods:

(1) Online, through the Commission’s Web site located at http://www.sec.gov; or

(2) By mailing or faxing a Form TCR (Tip, Complaint or Referral) (referenced in § 249.1800 of this chapter) to the SEC Office of the Whistleblower, 100 F Street NE., Washington, DC 20549-5631, Fax (703) 813-9322.

17 C.F.R. § 240.21F-9(a).

 

[5] Rule 21F-2(b)(1) states the following:

For purposes of the anti-retaliation protections afforded by Section 21F(h)(1) of the Exchange Act (15 U.S.C. 78u–6(h)(1)), you are a whistleblower if:

(i) You possess a reasonable belief that the information you are providing relates to a possible securities law violation (or, where applicable, to a possible violation of the provisions set forth in 18 U.S.C. 1514A(a)) that has occurred, is ongoing, or is about to occur, and;

(ii) You provide that information in a manner described in Section 21F(h)(1)(A) of the Exchange Act (15 U.S.C. 78u–6(h)(1)(A)).

(iii) The anti-retaliation protections apply whether or not you satisfy the requirements, procedures and conditions to qualify for an award.

17 C.F.R. § 240.21F-2(b)(1).

 

[6] The SEC may disclose information that reasonably likely would reveal the whistleblower’s identity only under these circumstances:

(1) When disclosure is required to a defendant or respondent in connection with a Federal court or administrative action that the Commission files or in another public action or proceeding that is filed by an authority to which we provide the information, as described below;

(2) When the Commission determines that it is necessary to accomplish the purposes of the Exchange Act (15 U.S.C. 78a) and to protect investors, it may provide your information to the Department of Justice, an appropriate regulatory authority, a self regulatory organization, a state attorney general in connection with a criminal investigation, any appropriate state regulatory authority, the Public Company Accounting Oversight Board, or foreign securities and law enforcement authorities. Each of these entities other than foreign securities and law enforcement authorities is subject to the confidentiality requirements set forth in Section 21F(h) of the Exchange Act (15 U.S.C. 78u-6(h)). The Commission will determine what assurances of confidentiality it deems appropriate in providing such information to foreign securities and law enforcement authorities.

(3) The Commission may make disclosures in accordance with the Privacy Act of 1974 (5 U.S.C. 552a).

17 C.F.R. § 240.21F-7(a).

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LGBT Discrimination Attorneys for Federal Employees

Prohibitions Against LGBT Discrimination in Federal Civilian Workforce

Can my federal employment be terminated because I am LGBT?

No: Executive Order 11478, amended by former President Obama and left in place by President Trump, protects employees of the federal government or federal contractors from discrimination based on sexual orientation or gender identity.

Do any federal statutes protect me from LGBT-based employment discrimination?

In certain respects, yes.

Title VII of the Civil Rights Act of 1964 prohibits the federal government from discriminating against its employees based on their “race, color, religion, sex, or national origin.” (42 U.S.C. § 2000e-16(a).) The Equal Employment Opportunity Commission (EEOC) has interpreted “sex”-based discrimination to encompass discrimination based on sexual orientation, gender identity, or sex stereotypes.

In Macy v. Holder, the EEOC held that discrimination against a transgender employee because of that employee’s gender identity constitutes unlawful sex discrimination under Title VII. (EEOC Appeal No. 0120120821, 2012 WL 1435995 (Apr. 20, 2012).) Following Macy, the EEOC also held that:

  • the Department of the Army (1) discriminated against a transgender employee because of her sex, in violation of Title VII, by restricting her access to a common female restroom facility; and (2) created a hostile work environment based on sex by denying her access to the common female restroom and allowing a supervisor to “intentionally and repeatedly to refer to her by male names and pronouns and make hostile remarks well after he was aware that [the employee’s] gender identity was female” (Lusardi v. McHugh, EEOC Appeal No. 0120133395, 2015 WL 1607756 (Mar. 27, 2015));
  • the intentional misuse of a transgender employee’s name and pronoun may constitute sex-based discrimination, harassment, or both (Jameson v. Donahoe, EEOC Appeal No. 0120130992, 2013 WL 2368729 (May 21, 2013)); and
  • a transgender employee stated a claim of Title VII sex discrimination where his employer continually failed to update its records with the employee’s correct gender identity and failed to address anti-transgender hostility directed at that employee by his coworkers. (Eric S. v. Shinseki, EEOC Appeal No. 0120133123, 2014 WL 1653484 (Apr. 16, 2014).)

Additionally, the Civil Service Reform Act of 1978 contains two provisions that have been interpreted to prohibit employment discrimination based on sexual orientation or gender identity:

  • Similar to Title VII, CSRA prohibits employment discrimination based on “sex.” (5 U.S.C. § 2302(b)(1)(A).)
  • CSRA also prohibits employment discrimination based on any “conduct which does not adversely affect the performance of the employee or applicant or the performance of others.” (5 U.S.C. § 2302(b)(10).)

What can I do if I believe I have been discriminated against in my federal employment for being LGBT?

Any federal employee who believes he or she has been discriminated against based on sexual orientation or gender identity may file a complaint under Title VII, CSRA, or both.

A complaint under Title VII should be brought to an EEO counselor at the employee’s agency within 45 days of the discriminatory incident. If the complaint cannot be resolved informally, the employee will have an opportunity to file a formal complaint with his or her agency. The employee can choose to receive either a final decision from his or her agency or a hearing before an EEOC administrative-law judge (ALJ). The employee can appeal the decision at this stage to the EEOC and then file a claim in federal court.

A complaint under the CSRA should be brought to the Office of Special Counsel (OSC). There is no statute of limitations for filing a prohibited-personnel-practice complaint. If OSC determines that there are reasonable grounds to believe that the agency has committed or will commit a prohibited personnel practice, then OSC may petition the MSPB for corrective and/or disciplinary action. The employee may elect to receive either a hearing before an MSPB ALJ or a decision based on the written record. The employee or the agency can appeal any part of the ALJ’s decision to the three-member MSPB. The employee, but not the agency, can then appeal to a federal court for review of the MSPB’s decision. (Note: OSC does not have jurisdiction over the Federal Bureau of Investigation, U.S. Postal Service, Postal Regulatory Commission, intelligence agencies, Federal Aviation Administration, government corporations, or non-appropriated fund employees.)

Employees who are represented by labor unions and covered by collective-bargaining agreements may also contact their unions about filing grievances pursuant to 5 U.S.C. § 7121.

Employees should be familiar with their agencies’ dispute-resolution procedures. Many agencies have unique processes for informally resolving disputes.

Washington DC LGBT Discrimination Attorneys

LGBT Workplace Rights in the District of Columbia

Can I be fired for being LGBT in Washington, D.C.?

No: Washington, D.C.’s Human Rights Act of 1977, as amended in 2006, prohibits employment discrimination based on sexual orientation or gender identity or expression.

Employers are prohibited from doing any of the following based on someone’s sexual orientation or gender identity or expression:

  • failing or refusing to hire or promote;
  • firing;
  • providing different compensation, terms, conditions, or privileges of employment; or
  • limiting, segregating, or classifying an individual in a way that may adversely affect his or her employment status, including, for example, by depriving him or her of employment opportunities.

(D.C. Code § 2-1402.11.) Moreover, when it comes specifically to someone’s gender identity or expression, employers are prohibited from:

  • engaging in disparate treatment;
  • verbally or physically harassing;
  • creating a hostile work environment;
  • failing to make reasonable accommodations as requested by an employee pursuant to 4 DCMR § 804 (dress and grooming standards);
  • denying access to restrooms or other gender-specific facilities that are consistent with the individual’s gender identity or expression; or
  • requiring an applicant to indicate whether he or she is transgender.

(4 DCMR §§ 801.1(a), 806.1.)

How do I know if my employer is harassing me because of my gender identity or expression?

Actions that may evidence harassment or a hostile work environment based on your gender identity or expression include:

  • deliberately misusing your preferred name or pronoun;
  • asking personal questions about your body, gender identity or expression, or gender transition;
  • disclosing to others that you are transgender; or
  • posting offensive pictures or sending offensive communications, whether or not electronic.

(4 DCMR § 808.2.) Such behavior amounts to harassment or a hostile work environment if it is “sufficiently severe or pervasive to alter the conditions of the victim’s employment . . . and to create an abusive environment.” (Id.)

Which restroom can I use?

The one that corresponds to your gender identity or expression. Employers are prohibited from preventing their employees from using any gender-specific facilities, including restrooms and dressing rooms, that are consistent with their gender identity or expression. (4 DCMR § 802.1.)

Any employer that has single-occupancy restrooms, furthermore, must label those restrooms with gender-neutral signs. (4 DCMR § 802.2.)

Can my employer require me to dress or groom myself according to the sex I was assigned at birth, rather than the gender with which I identify?

No: D.C. law expressly prohibits such dress codes. (4 DCMR § 804.1.) Employers are permitted to impose standards of dress and grooming that serve a “reasonable business purpose,” but those standards cannot “discriminate or have a discriminatory impact on the basis of an individual’s . . . gender identity or expression.” (4 DCMR § 804.2.)

Can my employer require me to provide documentation of my gender identity or expression in order for me to have access to gender-specific facilities?

No: your employer is required to “make reasonable accommodations” to allow for your “access to and . . . safe use of” gender-specific facilities, including those where people are frequently naked, consistent with your gender identity or expression—regardless of whether you have provided documentation of your gender identity or expression. (4 DCMR § 805.1, 805.2.) Employers may require such documentation only where they impose that requirement on everyone for a “reasonable business or medical purpose.” (4 DCMR § 805.3.)

What should I do if I believe my employer has discriminated against me?

You may file a discrimination complaint with the D.C. Office of Human Rights (OHR) by submitting an online questionnaire within 1 year either since the discriminatory act occurred or since you learned of it.

If you work for the D.C. government, then you must first consult any agency’s EEO counselor, who has 30 days to seek an informal resolution. Within 15 days of your final interview with the EEO counselor, you may file a formal complaint with OHR.

LGBT Discrimination Lawyers

Attorneys Advocating for LGBT Equality in the Workplace

The employment lawyers at Zuckerman Law are privileged to advocate for full equality on behalf of LGBT victims of discrimination both in private practice and in public service.  Two of the firm’s attorneys held senior positions at the U.S. Office of Special Counsel, where they enforced prohibitions against LGBT discrimination in the federal workforce, and provided training and outreach to federal managers and supervisors to prevent LGBT discrimination.

What is Sex-Stereotyping?

Sex-stereotyping has provided a sort of back door into Title VII protection for those who have suffered sexual-orientation or gender-identity discrimination. Simply put, discriminatory conduct against LGBT individuals can constitute prohibited sex discrimination under Title VII and other federal statutes that prohibit sex discrimination where the conduct is based on those individuals’ nonconformance to gender norms.

This concept developed in a 1989 Supreme Court decision, Price Waterhouse v. Hopkins, where a woman was denied partnership at Price Waterhouse because she did not conform to traditional female stereotypes. (490 U.S. 228 (1989).) In explaining the legal relevance of sex-stereotyping, the Court stated that “we are beyond the day when an employer could evaluate employees by assuming or insisting that they matched the stereotype associated with their group, for ‘[i]n forbidding employers to discriminate against individuals because of their sex, Congress intended to strike at the entire spectrum of disparate treatment of men and women resulting from sex stereotypes.’” (Id. at 251 (alteration in original) (quoting Los Angeles Dep’t of Water & Power v. Manhart, 435 U.S. 702, 707 n.13 (1978)).) In explaining the need for legal recognition of sex-stereotyping, the Court briefly explained: “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.)

The Court did not limit the type of proof that could establish sex-stereotyping, though it mentioned that “[r]emarks at work that are based on sex stereotypes . . . can certainly be evidence that gender played a part” in the employment decision. (Id.) The evidence that established sex-stereotyping in Price Waterhouse included proof “that Price Waterhouse invited partners to submit comments; that some of the comments stemmed from sex stereotypes; that an important part of the Policy Board’s decision on Hopkins was an assessment of the submitted comments; and that Price Waterhouse in no way disclaimed reliance on the sex-linked evaluations.” (Id.)

Less than a decade later, the Supreme Court handed down Oncale v. Sundowner Offshore Services, Inc. (523 U.S. 75 (1998).) Justice Scalia, writing for the unanimous Court, conceded that “male-on-male sexual harassment in the workplace was assuredly not the principal evil Congress was concerned with when it enacted Title VII.” (Id. at 79.) But, Scalia continued,

statutory prohibitions often go beyond the principal evil to cover reasonably comparable evils, and it is ultimately the provisions of our laws rather than the principal concerns of our legislators by which we are governed. Title VII prohibits “discriminat[ion] . . . because of . . . sex” in the “terms” or “conditions” of employment. Our holding that this includes sexual harassment must extend to sexual harassment of any kind that meets the statutory requirements.

(Id. at 79–80 (alterations in original).) The Sixth Circuit later summed up the impact of Price Waterhouse and Oncale:

After Price Waterhouse, an employer who discriminates against women because, for instance, they do not wear dresses or makeup, is engaging in sex discrimination because the discrimination would not occur but for the victim’s sex. It follows that employers who discriminate against men because they do wear dresses and makeup, or otherwise act femininely, are also engaging in sex discrimination, because the discrimination would not occur but for the victim’s sex.

(Smith v. City of Salem, 378 F.3d 566, 574 (6th Cir. 2004).)

The courts of appeals for the First, Sixth, Ninth, and Eleventh Circuits, district courts in the Second, Third, Fourth, Fifth, Sixth, Tenth, Eleventh, and D.C. Circuits, and the EEOC have recognized that transgender individuals’ sex-stereotyping claims constitute claims of sex-based discrimination.

District courts in Oregon, Ohio, Connecticut, and D.C. have recognized sex-stereotyping claims of gay or lesbian individuals as sex-based discrimination.

What is ENDA?

The Employment Non-Discrimination Act (ENDA) is a bill that would explicitly extend the federal law’s protection against employment discrimination to cover sexual orientation and gender identity. A version of this bill has been introduced into Congress every session since 1994. However, with little Republican support for a sexual-orientation-only ENDA, and even less Republican support for a transgender-inclusive ENDA, this bill has never come close to passing. The current version of ENDA lost the support of influential LGBT-advocacy organizations such as Lambda Legal because it would allow for discrimination by religiously affiliated organizations. So the bill does not appear to be viable in the foreseeable future.

Fortunately, the trend among federal courts is to interpret Title VII as covering sexual-orientation and gender-identity discrimination. If the Supreme Court were to interpret Title VII similarly, then ENDA would become superfluous.

What have the federal courts said about Title VII’s protection of employees based on sexual orientation?

The circuits are split regarding whether gay employees are protected under Title VII. The U.S. Court of Appeals for the Eleventh Circuit, in Evans v. Georgia Regional Hospital, in March 2017, held that Title VII does not prohibit employment discrimination based on sexual orientation. (850 F.3d 1248 (11th Cir. 2017).)

Later that month, the Second Circuit, in Christiansen v. Omnicom Group, Inc., reversed a district court’s opinion dismissing an HIV-positive gay man’s employment-discrimination suit because Title VII does not cover sexual orientation. (852 F.3d 195 (2d Cir. 2017).) The Second Circuit looked to Price Waterhouse’s holding that “sex stereotyping,” or discriminating against employees because they don’t conform to gender norms, constitutes discrimination “because of sex” under Title VII. (Id.) Stopping short of holding that sexual orientation is protected under Title VII, the Second Circuit found that the complainant in Christiansen had endured sex-stereotyping—his employer ridiculed him for being feminine—in violation of Title VII. (Id.) Chief Judge Robert Katzmann, in his concurrence, wrote that the Second Circuit should reverse its precedent that sexual-orientation-based employment-discrimination claims are not cognizable under Title VII on the grounds that recent legal developments militate for an expansive reading of “because of sex” as including discrimination based on sexual orientation. (Id. (Katzmann, C.J., concurring).)

The Seventh Circuit solidified the circuit split in April 2017. In Hively v. Ivy Tech Community College, the Seventh Circuit held that Title VII prohibits employment discrimination based on sexual orientation. (No. 15-1720, 2017 WL 1230393 (7th Cir. Apr. 4, 2017).)

Virginia LGBT Discrimination Lawyers

LGBT Workplace Rights in Virginia

Can I be fired for being LGBT in Virginia?

If you are a public employee or state contractor or subcontractor, then no. Otherwise, yes. Virginia prohibits employment discrimination based on sexual orientation or gender identity only in public employment, via executive orders signed by Governor Terry McAuliffe.

That said, this area of the law is in flux, so the scope of the Virginia Human Rights Act (VHRA) is not free of debate. The VHRA makes it “the policy of the Commonwealth to”:

Safeguard all individuals within the Commonwealth from unlawful discrimination because of race, color, religion, national origin, sex, pregnancy, childbirth or related medical conditions, age, marital status, or disability, in places of public accommodation, including educational institutions and in real estate transactions; in employment; preserve the public safety, health and general welfare; and further the interests, rights and privileges of individuals within the Commonwealth . . . .

(Va. Code Ann. § 2.2-3900(B).) Virginia Attorney General Mark R. Herring issued an advisory opinion on May 10, 2016, stating that the VHRA’s bar on discrimination based on “sex,” at least under some circumstances, covers sexual orientation and gender identity and expression. Mr. Herring determined this because (1) the VHRA explicitly intends to cover all discriminatory conduct prohibited by federal statutes or regulations, and the clear trend among federal courts and the EEOC has been toward interpreting “because of sex” to cover sexual orientation and gender identity and expression, particularly in cases involves sex-stereotyping or less favorable treatment of someone because of that person’s sex; and (2) the Virginia General Assembly, in passing the VHRA, stated that the Act “shall be construed liberally for the accomplishment of its policies.”

In light of those two considerations, Mr. Herring concluded that courts would most likely find that discrimination against gay, lesbian, or transgender individuals is prohibited by the VHRA insofar as it is based on sex-stereotyping or on treating those individuals less favorably because of their sex.

Given the growing consensus among federal courts that “because of sex,” in many circumstances, covers sexual orientation and gender identity and expression, Mr. Herring continued, courts may soon conclude that gender-identity and sexual-orientation discrimination are per se sex discrimination. This has not yet happened.

Do any Virginia municipalities have LGBT-inclusive employment-nondiscrimination ordinances?

Yes: Alexandria and Arlington County prohibit employment discrimination based on sexual orientation. (Alexandria, Va., Code of Ordinances tit. 12, ch. 4, § 12-4-5; Arlington, Va., County Code ch. 31, § 31-3(B).)

What should I do if I believe that my state-government employer has discriminated against me based on my sexual orientation or gender identity?

You may file a complaint with Virginia’s Office of Equal Employment Services within 180 days of the final discriminatory act.

Maryland LGBT Discrimination Attorneys

LGBT Workplace Rights in Maryland

Can I be fired for being LGBT in Maryland?

If your employer has at least 15 employees, then no: Maryland has prohibited employment discrimination based on sexual orientation since 2001 and expanded that protection to cover gender identity and expression in 2014. (Md. Code Ann., State Gov’t § 20-602 (West).) Maryland also prohibits harassment based on sexual orientation or gender identity, as well as retaliation for filing a complaint or participating in an investigation.

What is unlawful discrimination in Maryland?

It is illegal for your employer or prospective employer to discriminate against you based on your sexual orientation or gender identity with regard to: recruitment, hiring, transferring, dismissal, discipline, working conditions, promotions, training, advertisement, retirement, assignment, or performance evaluations.

What should I do if I believe my employer has discriminated against me?

If you are a public employee, you may file a complaint with your agency’s EEO Office within 30 days of learning of the discrimination. Once your agency renders a decision, you may file an appeal with the Office of the Statewide EEO Coordinator (OSEEOC) within 10 days. Additionally, you may file claims with the Maryland Commission on Civil Rights (MCCR) or the U.S. Equal Employment Opportunity Commission (EEOC).

If you are a private employee, you may file a complaint with the MCCR.

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