The Gay Rights Movement Just Scored a Massive Legal Victory Thanks to Walmart

Walmart is a pro-LGBTQ company today. That wasn’t always the case.

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Until recently, Walmart was not exactly a corporate leader on LGBTQ equality, often waiting to provide benefits and protections to LGBTQ employees until the law compelled it. Today, however, the company is a strong supporter of LGBTQ rights—and on Friday, it made an immense impact on civil rights in the United States by implicitly acknowledging that anti-gay employment discrimination is already illegal under federal law.

Walmart’s contribution to gay rights emerged, ironically, out of a companywide policy of discrimination. For years, the company provided health insurance benefits exclusively to opposite-sex spouses, refusing to extend benefits to same-sex spouses. Walmart abolished its anti-gay health insurance policy in 2014 as part of a push to shed its discriminatory image. But by that point, thousands of gay Walmart employees had been forced to pay huge sums of money to help pay their uninsured spouses’ medical bills.

Jacqueline Cote was one of these employees. In 2012, Cote’s wife, Diana Smithson, lost her health insurance and was then diagnosed with ovarian cancer. Smithson attempted to enroll in Cote’s insurance plan but Walmart rejected her, citing its anti-gay policy. The couple eventually incurred $150,000 of uninsured medical expenses. (Smithson died in March.) Cote filed a charge of discrimination with the Equal Employment Opportunity Commission, alleging that Walmart’s policy violated Title VII of the Civil Rights Act of 1964, which prohibits employment discrimination “because of sex.” The EEOC endorsed her legal theory, and Cote launched a class-action lawsuit on behalf of herself and about 1,000 people who suffered from Walmart’s anti-gay insurance policy between 2011 and 2014. (A statute of limitations issue prevented the suit from reaching back further.)

Cote’s class action put her at the cutting edge of civil rights law: She alleged that anti-gay workplace discrimination is currently barred by Title VII. That allegation might sound surprising in light of congressional Democrats’ efforts to explicitly add sexual orientation discrimination to the Civil Rights Act. But the EEOC, as well as some federal courts, believe that this addition would be redundant, because Title VII bars sex discrimination, and sex discrimination encompasses sexual orientation discrimination. This argument is bolstered by three legal theories:

  1. The Supreme Court has found that Title VII forbids “sex stereotyping,” mistreating an employee because she doesn’t adhere to gender norms. According to the EEOC, when an employer discriminates against an employee for being gay, he is engaging in quintessential sex stereotyping: He believes men should date women, and women should date men and is thus perturbed when a man dates a man or a woman dates a woman. But this consternation arises from a stereotypical view of how the sexes should act—a view that is invalid under Title VII.
  2. The EEOC also asserts that anti-gay discrimination is sex discrimination on its face. When an employer mistreats a male employee for dating men, his judgment is rooted in the employee’s sex. If the man were dating women—or if the employee were a woman—he would have no concerns. This fundamentally sex-based consideration violates Title VII’s clear statutory prohibition on discrimination “because of sex.”
  3. Finally, the EEOC claims that anti-gay discrimination is associational discrimination, drawing an analogy to Loving v. Virginia. In Loving, the court found that Virginia’s anti-miscegenation law constituted unlawful racial discrimination: The law punished Richard Loving for associating romantically with a person of a different race. In an analogous sense, anti-gay employment actions constitute sex discrimination: Employers punish gay employees for associating romantically with a person of the same sex.

Cote included all three theories in her suit against Walmart. Or, more accurately, her lawyers did: The class action was a collaborative effort between GLAD, the Washington Lawyers’ Committee for Civil Rights and Urban Affairs, Peter Romer-Friedman and his colleagues at the civil rights firm Outten & Golden, and Arnold & Porter.

In a massive legal victory for the gay rights movement, Walmart declined to contest Cote’s interpretation of Title VII. Instead, the company settled the case on Friday for $7.5 million. Walmart’s decision not to challenge Cote’s legal theory marked an implicit acknowledgment that Title VII currently forbids anti-gay discrimination, including inferior treatment of same-sex spouses. (Although most of us imagine anti-gay bias taking the form of a homophobic boss maliciously firing a gay employee, formal policies like Walmart’s are equally insidious.) Thanks to Cote’s lawsuit, class members—those who suffered because of Walmart’s discrimination—will receive restitution: 100 percent reimbursement for expenses up to $60,000, and 250 percent reimbursement for expenses over $60,000.

Walmart’s reliance on the EEOC’s interpretation of Title VII significantly bolsters the growing consensus among courts, federal agencies, and the business community that federal law already prohibits sexual orientation discrimination. (A majority of Americans already believes this, too.) The ultimate goal here is a Supreme Court ruling affirming the theory that Title VII bars anti-gay workplace discrimination. Each time a corporate titan like Walmart accepts the EEOC’s interpretation of Title VII, the possibility of a pro-gay ruling from the justices grows a little more likely. A comprehensive conception of sex discrimination becomes woven into the fabric of our legal system—and society more broadly, as LGBTQ tolerance shifts from an optional policy to a fact of doing business in the United States. We aren’t quite there yet. But the Walmart case proves that companies and the courts are still evolving toward a greater understanding of true LGBTQ equality.