Does Michigan Law Prohibit Discrimination Against LGBT Employees?

Does Michigan’s Elliott-Larsen Civil Rights Act protect gay and transgender people from employment discrimination?

It is a question which has been hotly debated in 2018. This past May, the Michigan Civil Rights Commission interpreted the term “sex” within the act to include sexual orientation and gender identity. The interpretation was a clear signal to employers and employees that the Michigan Department of Civil Rights viewed state law as protecting LGBT employees against employment discrimination and consequently that the state would begin processing sexual orientation and gender identity discrimination complaints.

However, this past July, Michigan Attorney General Bill Schuette responded with a strongly worded opinion rejecting the commission’s interpretation. Mr. Schuette argued that the Michigan Civil Rights Commission had overstepped its authority by acting as a legislative body “with the authority to change, extend, or narrow statutes.” Mr. Schuette’s formal opinion created a stir of criticism and uncertainty. While  opinions of attorneys general are generally considered binding on state agencies, it remains unclear whether state courts will ultimately side with the Michigan Department of Civil Rights or the attorney general.

For employers and employees caught in the middle of this uncertainty, there are several practical takeaways:

  1. Your safest move is to assume the law protects against discrimination based on sexual orientation and gender identity. Regardless of whether Michigan law protects sexual orientation and gender identity, the Michigan Department of Civil Rights has indicated that it will process complaints where individuals allege discrimination against LGBT employees. As a result, employers who fail to implement more inclusive anti-discrimination policies will continue to stand a higher risk of investigation. Additionally, there is the possibility of federal scrutiny of policies which do not afford protection for sexual orientation and gender identity. Despite the 2016 presidential election and the appointment of two new conservative justices to the Supreme Court, the Federal Equal Employment Opportunity Commission, which is the federal administrative agency charged with investigating discrimination, continues to interpret Title VII as prohibiting discrimination based on sexual orientation and gender identity. Furthermore, federal contractors and subcontractors must abide with Executive Order 13672, put in to effect by the Obama administration. The order provides explicit prohibitions against transgender or sexual orientation discrimination. As a result, whether state law prohibits discrimination against LGBT employees or not, employers should assume that federal law will apply – especially if the employer is a federal contractor or subcontractor.
  1. Update your employee handbook. With the Michigan Department of Civil Rights signaling that it will investigate claims based on sexual orientation and gender identity discrimination, it is critical that employers – even small businesses – update their employee handbooks. Even if it is ultimately determined that Michigan law does not extend protections based on gender identity and sexual orientation, a carefully crafted employee handbook will provide protection to ensure compliance with federal law and local ordinances. Employee handbooks are often relics from decades past that fail to reflect current law and recent court decisions. This can make employers susceptible to claims and the inevitably consequential protracted investigation. A failure to update employment policies is a policy of failure.
  2. Promptly investigate sexual orientation and gender identity discrimination claims. When an employee makes a complaint alleging harassment or discrimination based on his or her gender identity, or sexual orientation, promptly investigate the claim and, if issues are discovered, take prompt remedial action. If necessary, retain outside counsel to protect the impartiality of the investigation. Such an investigation can help demonstrate to the Michigan Department of Civil Rights, the Equal Employment Opportunity Commission, or a court that the employer acted reasonably and should not be held liable. Attempting to cover up discrimination is a recipe for liability … not a protection against it.
  3. Don’t forget about local ordinances. Even if federal and state law is ultimately determined not to provide protections based on sexual orientation or gender identity, don’t neglect local ordinances. For instance, on October 4, 2017, Traverse City passed an ordinance providing protections against LGBT discrimination. Procedurally the ordinance is somewhat problematic as it requires the city manager, or his or her designee, to “undertake an investigation of any complaint alleging a violation of this chapter not currently recognized or proscribed by Michigan or federal anti-discrimination statute, and cause all other complaints to be referred to the appropriate state or federal agency for review.” Since it is often unclear what state and federal law recognizes as proscribed discrimination, it is difficult to predict what, if anything, the city would investigate. Nevertheless, the ordinance is positioned as a potential backstop against LGBT discrimination and appears intended to fill the gaps where state and federal law fail to provide protections against sexual orientation and gender identity discrimination. Though local governments generally don’t have the same level of resources to investigate, prosecute, and penalize as state and federal agencies, such ordinances can serve as valuable deterrents.

Michigan law remains unsettled, inviting judicial involvement. However, by working from the assumption that the law protects against gender identity and sexual orientation discrimination, employers will likely ensure compliance with federal, state and local laws. Whether state law is ultimately determined to extend protections or not, a failure to update policies to extend protections based on sexual orientation and gender identity may serve as an invitation for an investigation or a lawsuit. While there are always exceptions for certain employers and protections to ensure other rights are protected, updating policies should be an easy decision for most employers.

Anders J. Gillis is an attorney with Parker Harvey PLC. Reach him at (231) 486-4507 or agillis@parkerharvey.com.

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