The U.S. Court of Appeals for the Second Circuit will hear arguments in a high-profile case next week that could telegraph what’s to come in the ongoing legal battle over whether sexual orientation should be protected under federal civil rights law. Zarda v. Altitude Express is also notable in that it pits two government agencies—the U.S. Department of Justice and the U.S. Equal Employment Opportunity Commission—against each other in the courtroom.  

After a three-judge panel of the Second Circuit ruled back in April that Title VII of the Civil Rights Act of 1964 does not protect LGBTQ workers, the full appeals court agreed to revisit the decision en banc. Arguments are scheduled for Sept. 26 in New York.

Why We Are Paying Attention

The ultimate answer to the question of whether Title VII should be expanded in scope to include workers from discrimination based on their sexual orientation will have widespread effects on companies across the country. So far, rulings on the issue have varied, and eventually the Supreme Court will almost certainly provide its own view. Lower court arguments will be crucial in setting the stage for a possible circuit split and an eventual high court showdown.

Government Bodies at Odds

This case is rather unique because the DOJ and the EEOC are on opposite sides of the fence. Both will argue before the full court Tuesday. The hearing will break down into 10-minute segments, a departure from the half hour traditionally allotted for each side. Former Jones Day attorney Hashim Mooppan will argue for the Justice Department.

The DOJ got involved in this case this summer, filing an amicus brief that argues that Congress, not the courts, has the power to expand the scope of Title VII. The department argues sexual orientation is clearly not protected under the Civil Rights Act as the law stands.

But the EEOC has taken the opposing view. The agency weighed in as a friend of the court in several appeals court cases on sexual orientation and Title VII, arguing that the gender discrimination protections provided by the statute do in fact apply to sexual orientation. Jeremy D. Horowitz will argue for the commission next week.

Both the DOJ and EEOC are responsible for enforcing federal civil rights laws—but in different realms. The Justice Department enforces employment laws against state and local governments, as well some immigration employment enforcement cases. The EEOC enforces cases involving private companies and federal government employees.

Advocacy groups supporting each side will also get 10 minutes to speak. Gregory Nevins will argue for Lambda Legal Defense and Education Fund, the LGBTQ rights group that has been a leader in championing the legal argument that sexual orientation is already protected under existing law. Adam K. Mortara of Bartlit Beck Herman Palenchar & Scott, was appointed by the Second Circuit to argue before the court and instructed to argue that Title VII does not bar discrimination on the basis of sexual orientation. New York City attorney Gregory Antollino will argue for Donald Zarda’s estate. Saul D. Zabell of Zabell & Associates will argue for Altitude Express. There are a slew of amici in the case, including a coalition of major companies and other civil rights groups. The majority of the friend-of-the-court briefs filed advocate sexual orientation being included in Title VII.

The Legal Quagmire

“Does Title VII of the Civil Rights Act of 1964 prohibit discrimination on the basis of sexual orientation through its prohibition of discrimination ‘because of … sex’?” That is the key question at play here. The federal statute prohibits employers from discriminating against employees on the basis of sex, race, color, national origin and religion. It applies to employers with 15 or more employees, including federal, state and local governments.

Zarda’s attorney, the EEOC and Lambda Legal say the fact that the statute protects “sex” means that sexual orientation should also fall under the umbrella. The DOJ and the company argue the law’s scope is limited to protection against sex-based discrimination, not what sex a worker’s partner happens to be. Lambda Legal was one of the first groups to present the opposing argument in court and the EEOC followed suit, bringing the issue to the forefront. The agency began using this argument and tracking sexual orientation cases that it takes on in 2013. Previously, courts have largely agreed that sexual orientation is not included in Title VII.

Who’s Zarda?

Zarda, a skydive instructor who is now deceased, sued his employer Altitude Express and its owner Maynard, claiming that he was fired from his position because of his sexual orientation, in violation of federal and New York state law. The executors of Zarda’s estate now represent his interests in the ongoing court battle.

The U.S. District Court for the Eastern District of New York, citing the Second Circuit’s 2000 decision in Simonton v. Runyan, ruled against Zarda in 2014, holding that Title VII does not include protections for LGBTQ workers. The three-judge panel at the Second Circuit then upheld this decision.

The Second Circuit determined that there were evidentiary errors, unfair discovery practices and prejudicial arguments to the jury in the case based on gay stereotypes. On appeal, Zarda’s attorneys argued that the Second Circuit should overturn Simonton. The three-judge panel, however, cited a recent decision in Christiansen v. Omnicom Group, saying that only the circuit en banc could overturn Simonton. The Christiansen case, which highlighted similar issues, has also attracted widespread interest–including briefs from amici such as the American Civil Liberties Union.

How Courts Have Ruled—So Far

Federal appeals courts that have confronted the scope of LGBTQ protections in the workplace have reached different positions, setting the stage for the Supreme Court. In what has been hailed as a landmark decision, the Seventh Circuit recently ruled that discrimination against LGBTQ employees violates federal civil rights laws. In March, a three-judge panel for the Eleventh Circuit, meanwhile, took the opposite stance, echoing the stance of other circuits in the past.

The issue of gender identity and whether transgender workers are protected under Title VII has proven easier for courts to resolve. Four circuits have agreed that transgender workers are protected under the statute.

What Else to Watch

• Lambda Legal has filed a cert petition to ask the U.S. Supreme Court to consider its Title VII sexual orientation case out of the Eleventh Circuit. In its argument, the advocacy group pointed to the split in the courts, as well as the diverging opinions of the government. It’s important to note, also, if and when the issue comes before the Supreme Court, the DOJ would represent the government.

• The future of the EEOC will still be important to consider, since some critics believe the agency has stretched the scope of Title VII in recent years. Janet Dhillon and Daniel Gade, President Donald Trump’s nominees for the EEOC, were questioned by the Senate Health, Education, Labor and Pensions committee about how, if confirmed, they would wrangle the agency’s stance on sexual orientation. Both nominees said that they personally opposed sexual orientation discrimination but fell short of promising to stand by the EEOC’s current position. With a changing makeup of commissioners and enforcers under the Trump administration, the EEOC’s advocacy for LGBTQ workers may change as well.

• Despite all the legal uncertainty, most Fortune 100 companies have adopted policies to protect workers of all sexual orientations, according to the Human Rights Campaign. State and local governments have also passed protections for sexual orientation in recent years.

This story has been corrected to clarify the role played by Adam Mortara and his law firm in this litigation.