Presented by Brian D. Barger, McGuireWoods LLP (Charlotte) SEX. ORIENTATION / GENDER IDENTITY HB 2, Federal Law and What It Does and Does Not Mean for North Carolina Employers Presented by Brian D. Barger, McGuireWoods LLP (Charlotte)

WELCOME TO 2016 IN NORTH CAROLINA

ISSUES LAW PROFS LOVE AND ERs HATE There Is Conflicting (and Shifting) Law and Enforcement Postures at All Levels: Between Local, State and Federal Within State and Federal Laws and Regulations Themselves There Is an Underlying Federalism Fight Interwoven Into the Dispute: Power Not Delegated to US Reserved to States Localities in NC Only Derive Power to the Extent Delegated by the State

ISSUES LAW PROFS LOVE AND ERs HATE There Is an Underlying Constitutional Fight Interwoven Into the Dispute: When Is a Prior Law “Ambiguous” Requiring Agency “Deference” vs. Legislative Action? When Is an Agency Allowed to Change Long-Standing Prior Enforcement Positions Based on Opinion Letters and Guidance vs. Rulemaking? How Do You Reconcile Fd. Non-Discrimination and Const. Equal Protection vs. Const. Right to Privacy and State Rights? Q: How Many of You Have S.O./G.I. Policies Now?

LAY OF THE LEGAL LANDSCAPE PRE-2012 Title VII of Civil Rights Act of 1964 Covers Employers With 15+ Employees Prohibits Non-Discrim. on the Basis of Several Classifications, Including “Sex” E.O. 11246 (1965) Covers Defined Federal Contractors and Subcontractors Prohibits Non-Discrim. on the Basis of Several Classifications, Including “Sex” + Requires AA Title IX of the Educ. Amendments of 1972 Covers Educ. Institutions Who Receive Fd. Funding Prohibits Non-Discrim. on the Basis of “Sex”

LAY OF THE LEGAL LANDSCAPE PRE-2012 NC Equal Employment Practices Act (1977) Covers Employers With 15+ Employees Prohibits Non-Discrim. on the Basis of Several Classifications, Including “Sex” Grounds for Wrongful Discharge Claims for Violation of NC Public Policy (1989 Ct.-Created Private Rt of Action) Various State Laws Trespass; Indecent Exposure; Intrusion into Seclusion Birth Certificates (Allows Some Changes to Gender) Various Local Ordinances Places of Public Accom.; Local Contracting; Build. Codes

2012 – 2015 FEDERAL ACTION 2012 and 2015 EEOC Decisions + Enforcement Posture Title VII Interpreted to Cover Sex. Orien. and Gender ID E.g., Macy v. Holder 2014 E.O. 13672 Amended E.O. 11246 to Cover Sex. Orien. and Gender ID 2014 OCR Title IX Q&A, 2015 EEOC Decision + 2015 OSHA Best Practices Guide: Denial of Multi-Unit Bathroom Access Corresponding to Gender Identity = Discrim. + OSHA Safety Violation 2015 Aff. Care Act / HSS Proposed Rule: Mandates Treatment Consistent With Gender ID, Including Facility Access

CHARLOTTE ORD. 7056 (Feb. 20, 2016) Scope: City Contractors and Places of “Public Accommodation” – i.e., Entities Open to the Public Added Marital Status, Familiar Status, Sex. Orientation, Gender Identity and Gender Expression to List of Prohibited Discrim. Struck Sex Discrim. Exceptions for “Restrooms, Shower Rooms, Bathrooms and Similar Facilities Which Are in Their Nature Distinctly Private” + for the YMCA, YWCA and “Similar Dormitory Lodging” Left in Place a Prior Non-Discrim. Signage and Advertising Provision

NC Public Schools and NC Public Agencies / Localities NC HOUSE BILL 2 (March 2, 2016) NC Public Schools and NC Public Agencies / Localities Requires Multi-Occupancy Bathrooms and Changing Facilities to Be Designated and Used Based on “Biological Sex” – i.e., Gender on Birth Certificate Places of Public Accommodation in NC Creates Statewide Non-Discrimination Policy for Places of Public Accom., Omitting Sex. Orien. / Gender Identity Provides That Designating a Bathroom or Changing Facility According to “Biological Sex” is Not Discrim. Prohibits Local Adoption of Own Public Accommodation or Other Non-Discrim. Rules

Local Government Contracting NC HOUSE BILL 2 (March 2, 2016) Local Government Contracting Prohibits Local Employment Rules as a Condition Except a Provided by State Law State Wrongful Discharge Claims Modifies EEPA Reference Re: “Sex” to “Biological Sex” Expressly Prohibits State Wrongful Discharge Claim for Violation of NC EEPA Local Government Employment Rules Prohibits Local Employment Rules Re: Discrim. + Wages and Hours, Benefits, Leave or Minors Except for Own Employees (and Other Limited Exceptions)

WHAT DID NC HOUSE BILL 2 NOT DO? Prohibit NC Public Schools, Public Agencies or Localities from Providing Single Occupancy Bathroom Facilities Prohibit Private Businesses from Adopting Policies or Practices of Any Type Regarding Sex. Orient., Gender Identity, Bathrooms or Changing Rooms Change NC’s Non-Discrim. Statute to Strike Protections for Sex. Orient. or Gender Identity (Was Never There) Eliminate Ability to Sue for Wrongful Discharge for Violation of NC Public Policies Other Than EEPA Eliminate NC Employees’ Ability to Sue Under Fd. Law for Discrim. or Harassment. . . .But: Fd. Process Alone; 180 Day SOL; Damage Caps

WHAT’S HAPPENED SINCE?

WHAT’S HAPPENED SINCE?

TIMELINE SINCE HB 2 March 28: ACLU Action v. NC April 8: DOJ Letter to UNC re: Title IX Compliance April 12: Gov. Issues NC E.O. 93, Extending Protections to State Employees for Sex. Orient. and Gender Identity (Other Than Restroom Access) April 19: 4th Cir. G.C. ex rel Grimm v. Gloucester (Agency Deference re: Title IX Bathroom Access) May 2: EEOC “Fact Sheet” Re: Bathroom Access and Gender Identity May 4: DOJ Letters to Governor, UNC and State Prisons re: Non-Compliance, With 5 Days to Respond

TIMELINE SINCE HB 2 May 5: Va. US Dist. Ct. Hinton v. VCU, Dismissing Claim for Title VII Sex. Orien. Discrim. (No Protected Class)** May 9: NC Declaratory Judgment Actions vs. US May 9: US Suit vs. NC, UNC System + NC Dept of Pub Saf May 13: DOJ / DOE National “Dear Colleague” Title IX Ltr May 25: 11 States Sue DOJ / DOE re: Title IX Guidance June 14: OFCCP Updates Sex Discrimination Guidelines July 1: NC HB 169 (Restores State EEPA Wrongful Discharge Claim; 1 Year Stat. of Limitations) July 5: US Motion for Preliminary Injunction in NC Suit July 8: 10 More States Sue DOJ / DOE re: Title IX Guidance

CURRENT FEDERAL POSTURE IN A NUTSHELL 2014 E.O. 13672 Federal Contractor Non-Discrimination Protections Includes Sex. Orient. and Gender Identity Based on Express Executive Action Title VII and Title IX “Sex” Discrimination Protections Include Gender Identity and Sexual Orientation** Based on Agency Interpretation and Asserted Court Holdings Title VII and Title IX Require Access to Multi-Unit Bathroom Facilities Based on Gender Identity, Even Where Single Unit Facilities Are Available and Offered Categorical Benefit Exclusions for Sex Reassignment Surgery Are “Facially Discriminatory” / Provide if Medically Necessary Based on OFCCP Interpretation

ISSUES WITH FEDERAL POSTURE Title VII and Title IX Meaning of “Sex” When Adopted in 1964 and 1972 v. 2016 Title VII Case Law Distinctions Between Sex. Harassment and Sex Stereotyping vs. Sex. Orien. / Gender ID Discrim. Title IX Includes Express Allowances for Separate Bathroom and Locker Rooms, Housing, Certain Sports, etc. Based on “Sex” If Lack of Bathroom Access Based on Gender Identity is “Facially Discriminatory,” How is Separate Male / Female Restroom Facilities Not a Similar Violation? I.e., Why Can You Have “Separate But Equal” Restrooms for Men and Women But Not Separate Break Rooms, Etc. – Historical Practice? Privacy? Other? Apply to Gen. ID?

WHERE DOES THIS LEAVE NC EMPLOYERS? State Wrongful Discharge Private Right of Action re: Discrim. Remains as Before, But With a Shortened SOL State Non-Discrim. Protected Classifications Remain as Before, But Expressly Limits “Sex” to “Biological Sex” No Local Non-Discrimination Rules Allowed No Local Minimum Wage, Living Wage, Overtime Rules Allowed No Local Sick Leave, Maternity / Paternity Leave or Other Time Off Rules Allowed

WHERE DOES THIS LEAVE NC EMPLOYERS? Nothing Under NC Law Prohibits Private Businesses from Adopting (or Requires the Adoption of) Policies, Practices, Protections or Benefits of Any Type Regarding Sex. Orient., Gender Identity, Bathrooms or Changing Rooms The Fed Govt. Sees Things Differently – If You Don’t Take Action to Expand Discrim. Protections + General Access: Federal Contractors / Subcontractors: Risky Given Executive Authority + Current Agency Interpretation Other Private Employers: Swimming Upstream, But With Better Defenses (Especially Re: Sex. Orient. and Bathrooms) To the Extent Indiv. Employees See Things Differently, Address on a Case by Case Basis (e.g., Privacy Concerns)

ANY OTHER TAKE-AWAYS FOR 2016?

Questions / Comments / Stray Remarks? Brian D. Barger Partner, McGuireWoods LLP Charlotte, NC 704.343.2072 bbarger@mcguirewoods.com www.mcguirewoods.com