On July 28, 2022, in a 5-2 opinion, the Michigan Supreme Court held that the prohibition of discrimination “because of… sex” in the Elliott-Larsen Civil Rights Act (“ELCRA”) includes discrimination on the basis of sexual orientation. Rouch World LLC v Department of Civil Rights, No. 162482, July 28, 2022.
There are two sets of background facts relevant to this case. In the first set, Rouch World declined to host a same-sex wedding at its event center facility in Southwest Michigan, explaining that hosting and participating in a same-sex wedding ceremony would violate a sincerely held religious belief that marriage is a sacred act of worship between one man and one woman. The couple filed a complaint with the Michigan Department of Civil Rights (“MDCR”) alleging Rouch World discriminated against them on the basis of sex under the Michigan Civil Rights Commission’s non-binding Interpretive Statement 2018‑1 that provides that the “because of… sex” language in the ELCRA includes a prohibition against discrimination on the basis of sexual orientation and gender identity.
The second set of facts concerned Uprooted Electrolysis LLC, which denied hair removal services to a transgender woman, explaining that delivering the services would violate a sincerely held religious belief that sex is an immutable gift from God. The transgender woman also filed a complaint with the MDCR alleging sex discrimination.
The MDCR opened investigations into both incidents, and the two businesses jointly sued the MDCR seeking a declaratory judgment that sexual orientation and gender identity are not encompassed by the ELCRA’s prohibition of sex discrimination. The MDCR moved for summary disposition. The Court of Claims denied the motion, partly because it was bound by the Michigan Court of Appeals decision in Barbour v. Department of Social Services, 198 Mich. App. 183 (1993), which held that sexual orientation was not encompassed by the ELCRA. However, because Barbour did not concern gender identity discrimination, the Court of Claims considered that issue and determined that the ELCRA prohibited gender identity discrimination. The MDCR then filed an interlocutory application for leave to appeal in the Court of Appeals on the sexual orientation issue. Shortly thereafter, the MDCR filed a bypass application to the Michigan Supreme Court, which was granted.
The Michigan Supreme Court held that discrimination because of sex encompasses discrimination on the basis of sexual orientation, overruling Barbour. The Court did not specifically address the issue of gender identity discrimination because that issue was not before the Court. The Court was significantly influenced by the United States Supreme Court decision in Bostock v. Clayton Company, 590 U.S. 140, S.Ct. 1731; 207 L.Ed.2d 2018 (2020), which held that Title VII’s prohibition of employee discharge “because of such individual’s… sex” necessarily encompasses discriminatory employer action on the basis of sexual orientation and gender identity.
What Does This Mean?
The impact on employers in Michigan is minimal. Title VII and Bostock apply to employers with 15 or more employees, so only those employers with fewer than 15 employees face a new legal risk. The only other significant difference is that an employee now has the option to go to state court under the ELCRA and does not have to first file a claim with the EEOC to get a right to sue letter to pursue court action under Title VII. Most employees, however, will likely pursue both state and federal claims.
In Rouch World, The Michigan Supreme Court noted in a footnote that “whether enforcement under the ELCRA for sexual orientation and gender identity discrimination would violate plaintiff’s federal and state constitutional religious liberty protections has not yet been adjudicated below and, accordingly, it is also not currently before this Court.” As such, the conflicts between discrimination claims and religious liberty claims are yet to be conclusively resolved at the state or federal level. While this specific issue will not affect most employers, to the extent it could be an issue for a Michigan employer, the company should seek counsel on the facts and risks in its situation.
About the Author:
Tim Howlett is a Member in Dickinson Wright’s Detroit office. His practice involves counseling clients on labor and employment issues and litigation. Tim can be reached at 313-223-3662 or email@example.com and you can access his bio, here.