MSC: State Law Prohibits Discrimination Based On Sexual Orientation

Michigan’s civil rights law prohibits discrimination based on sexual orientation, the Michigan Supreme Court has ruled for the first time.

The Michigan Legislature enacted the Elliott-Larsen Civil Rights Act (ELCRA), MCL 37.2101 et seq., in 1976. The law prohibits discrimination based on religion, race, color, national origin, age, sex, height, weight, familial status, or marital status in employment, housing, education, and places of public accommodation and service.

In Rouch World, LLC v Dep’t of Civil Rights (Docket No. 162482), a 5-2 Michigan Supreme Court concluded that the word “sex” in the ELCRA encompasses sexual orientation. Justice Elizabeth T. Clement wrote the majority opinion, joined by Chief Justice Bridget M. McCormack and Justices Richard H. Bernstein, Megan K. Cavanagh and Elizabeth M. Welch.

According to the majority, the ELCRA was originally enacted to help women by barring discrimination based on sex (gender). However, “this motivation does not curtail other applications of the plain statutory language,” the justices said, emphasizing the law has been applied in pregnancy discrimination cases, same-sex harassment cases and retirement account disputes.

Denying a person “’the full and equal enjoyment of the goods, services, facilities, privileges, advantages, or accommodations of a place of public accommodation or public service’ on the basis of sexual orientation constitutes discrimination ‘because of … sex’ and … constitutes a violation of the ELCRA under MCL 37.2302(a),” the majority held.

Notably, the majority specifically overturned the Michigan Court of Appeals decision in Barbour v Dep’t of Social Services, 198 Mich App 183 (1993), which found the ELCRA’s discrimination prohibition did not include sexual orientation. The majority overruled Barbour because many of the federal cases on which that decision relied have since been overturned by the U.S. Supreme Court in Bostock v Clayton County, 590 US ___ (2020). In Bostock, the U.S. Supreme Court held that firing a person based on homosexuality or transgender identity necessarily involves discrimination “based on sex.”

Justices Brian K. Zahra and David F. Viviano dissented from the MSC majority, saying the ELCRA’s prohibition on discrimination in public accommodations “because of sex” does not include sexual-orientation discrimination.

Background

In 2019, the owners of Rouch World, LLC denied a request to host the same-sex wedding of Natalie Johnson and Megan Oswalt at their event facility, claiming it was against their religious beliefs. That same year, the owner of Uprooted Electrolysis, LLC denied hair-removal services to Marissa Wolfe, a transgender woman, on the same basis. Johnson, Oswalt and Wolfe filed complaints with the Michigan Department of Civil Rights (the Department) and investigations were opened. Notably, the Department had issued an interpretive statement in 2018 indicating the ELCRA’s prohibition against discrimination based on sex included sexual orientation and gender identity.

The Department’s investigations were stayed when the plaintiffs - Rouch World and Uprooted Electrolysis - filed the instant lawsuit in the Michigan Court of Claims against the Department and its director. The plaintiffs sought a declaration that the prohibition of sex discrimination in places of public accommodation under the ELCRA does not bar discrimination based on sexual orientation or gender identity. The Department filed a motion under MCR 2.116(C)(8) to have the plaintiffs’ claims summarily dismissed.

Michigan Court of Appeals Judge Christopher M. Murray, acting as the Court of Claims, examined the parties’ arguments and ruled the court was bound to follow Barbour. In Barbour, the appeals court had relied on federal precedent regarding Title VII of the Civil Rights Act, 42 USC 2000e et seq., to find that the ELCRA’s discrimination prohibition did not include sexual orientation. Accordingly, the Court of Claims denied the Department’s motion for summary disposition on plaintiff-Rouch World’s claims.

The Court of Claims also looked to the U.S. Supreme Court’s decision in Bostock, where an employer was deemed to have violated Title VII by intentionally firing an employee based on homosexuality or transgender identity because doing so necessarily involves discrimination “based on sex.” Accordingly, the Court of Claims granted the Department’s motion for summary disposition on plaintiff-Uprooted Electrolysis’s claims.

After the Court of Claims issued its decision, the Department filed an interlocutory appeal in the Michigan Court of Appeals, challenging the denial of summary disposition as to plaintiff-Rouch World. The Department then filed a bypass application with the Michigan Supreme Court and the justices granted the application to address “whether the prohibition on discrimination ‘because of … sex’ in the [ELCRA] applies to discrimination based on sexual orientation.”

‘Because Of Sex’

The MSC majority explained that the issue in Rouch World was whether the complainants who were denied service because of their sexual orientation “would not have been so denied but for their sex.” Accordingly, the justices examined state and federal case precedent - primarily Barbour and Bostock.

The majority explained that Barbour held the ELCRA does not prohibit discrimination based on sexual orientation. The justices further pointed out that:

• Barbour looked only to federal decisions regarding Congressional intent when enacting Title VII and did not analyze the issue under Michigan law (the ELCRA).

• Many of the federal cases on which Barbour relied were overruled by the U.S. Supreme Court’s Bostock decision.

As a result, the majority specifically overruled Barbour. “Barbour, as a published, post-1990 Court of Appeals opinion, has precedential effect, and the Court of Claims properly recognized below that it was bound by that decision,” the justices said. “However, this Court is not so bound, and developments in the law since Barbour have called into question its validity. Specifically, since the Court of Appeals decision in Barbour, the cases on which that Court relied were overturned in Bostock ….”

The majority then turned to the U.S. Supreme Court’s decision in Bostock. Under Bostock, the relevant inquiry is whether a specific employee is treated differently and not whether the employer treats different groups of persons differently, the justices said. Applying this rationale, the majority adopted the reasoning in Bostock, explaining that sexual orientation is “inextricably bound up with sex” because a person’s sexual orientation is determined by reference to their own sex.

“Discrimination on the basis of sexual orientation necessarily constitutes discrimination because of sex,” the majority wrote. “Accordingly, the denial of ‘the full and equal enjoyment of the goods, services, facilities, privileges, advantages, or accommodations of a place of public accommodation or public service’ on the basis of sexual orientation constitutes discrimination ‘because of … sex’ and, therefore, constitutes a violation of the ELCRA under MCL 37.2302(a).”

Therefore, “[w]e reverse the Court of Claims’ decision to the contrary and remand this case for further proceedings consistent with this opinion,” the majority concluded.

Two Dissenters

In his dissent, Justice Zahra said the “best interpretation of the ELCRA, in light of the available evidence about its original public meaning, is that its prohibition on discrimination in public accommodations ‘because of … sex’ does not encompass a prohibition on sexual-orientation discrimination.”

Justice Zahra indicated that he took no issue with the merits of the policy adopted by the majority. However, under the Michigan Constitution, he said it is the responsibility of the Legislature or the people “to write, amend or repeal laws of this state,” while the Michigan Supreme Court’s responsibility is to “say what the law is, not what it thinks the law ought to be.”

According to Justice Zahra, the majority’s finding that the ELCRA prohibits discrimination based on sexual orientation construes “because of … sex” to mean something that nobody intended in 1976 when the statute was first enacted. He also noted that none of the entities that enforce the ELCRA understood the law to prohibit sexual orientation discrimination until 2018.

“This Court’s function is to interpret and apply the laws that the Legislature writes,” Justice Zahra concluded. “That is not what the majority opinion has done. Instead, it analyzes the words of the ELCRA in a vacuum, stripped from their relevant and critical historical-linguistic context - context that is necessary to make them fully intelligible and to preserve Michiganders’ right to self-government and the constitutional separation of powers. Seizing on the words of the ELCRA in isolation, the majority opinion is thereby able to declare them to mean something that nobody for more than 40 years seriously believed that they meant. The best interpretation of the ELCRA, in light of the available evidence about its original public meaning, is that its prohibition on discrimination in public accommodations ‘because of … sex’ does not encompass a prohibition on sexual-orientation discrimination. This is all the more obvious given that the Legislature specifically and explicitly considered including sexual orientation as a protected class under the ELCRA but ultimately did not.”

Justice Viviano also dissented, saying that he agreed with Justice Zahra’s analysis. He also pointed out that a threshold element of discrimination under MCL 37.2302(a) is that a defendant “maintain some prejudice, bias, animus, or belief about ‘sex’ or the other characteristics” protected by the ELCRA.

“Here, that threshold is not satisfied: discrimination on the basis of one’s sexual orientation is not discrimination because of some prejudice, bias, animus, or belief about the male sex or the female sex,” Justice Viviano wrote. “Consequently, we need not decide whether to adopt a but-for standard. But even if that standard applied, the majority still reaches the wrong outcome. A proper application of the but-for test takes into account the defendant’s motive. That means where, as here, no belief or animus about biological sex has been shown, ‘sex’ cannot be a but-for cause of discriminatory actions.”