On Thursday, July 28, 2022, the Michigan Supreme Court issued its opinion in Rouch World, LLC v. Department of Civil Rights, finding in a 5-2 decision that Michigan’s Elliott-Larsen Civil Rights Act (“ELCRA”) protects against discrimination based on gender identity and sexual orientation. While so holding, the Court overturned precedent set nearly 30 years ago by the Michigan Court of Appeals in Barbour v. Department of Social Services. That court had relied upon then analogous federal precedent in holding that the same statute did not extend protection on the basis of sexual orientation, as “sex” in the context of ELCRA meant only “gender discrimination, not discrimination based on sexual orientation.”

The decision to overturn Barbour was not particularly surprising given the United States Supreme Court’s 2020 ruling in Bostock v. Clayton Co. which held that the proscription against sex discrimination in Title VII of the Civil Rights Act of 1964 protected against discrimination based upon gender identity or sexual orientation. While the Michigan Supreme Court recognized that lower courts in Michigan had been bound to follow the Barbour doctrine, it held that it was not similarly constrained from addressing the issue. Because all of the opinions relied on by the Barbour court had been overruled over the course of the intervening decades, the Court concluded that the Barbour doctrine’s precedential value had waned, particularly in the face of persuasive reasoning on this issue from the United States Supreme Court in Bostock.

Indeed, in making its decision the Michigan Supreme Court echoed the rationale of the Bostock Court. Extensively quoting Bostock, the Court held that an individual is discriminated against on the basis of sex when traits that would be tolerated when exhibited by persons of one sex (such as attraction to men) are not tolerated when exhibited by persons of the other sex. In other words, an employer that terminates a male employee because that employee is attracted to other males is discriminating on the basis of the employee’s sex because that behavior is tolerated by female employees.

While this is an important decision under Michigan law, as a practical matter it does not represent a sea change for most Michigan employers. After all, Title VII already prohibited employers with 15 or more employees from discriminating on the basis of gender identity or sexual orientation under the Bostock decision. However, smaller employers, with 14 employees or fewer, were not bound by the same restrictions. Accordingly, those Michigan employers should take steps to train supervisors and management on the law’s new requirements to avoid future liabilities, and to change handbooks and policies to reflect the law’s newly found meaning. That training also should include training regarding harassment on the basis of sexual orientation and gender identity, as the definition of “sex” under ELCRA now extends the law’s protections in that area. Larger employers also should update their policies to make sure that they accurately reflect the scope of these LGBTQ-related protections under both state and federal law.

If you have any questions about this ruling and what it means for employers, please contact the author of this article or any member of Dykema’s Labor and Employment team.