On February 22, 2012, the US District Court for the Eastern District of New York issued a decision in Birkholz v. City of New York, granting in part and denying in part the defendants' motion to dismiss the plaintiff's claims brought under Title VII, the ADEA and state and city human rights laws. The key issue in the case was whether plaintiff could state a claim under Title VII for alleged discrimination, harassment or retaliation based on sexual orientation.

The plaintiff, a 62-year-old school guidance counselor described in the complaint as a "homosexual male," alleged that school officials had discriminated against him on the basis of his sexual orientation, gender and age, leading to loss of employment, pay and benefits. In his complaint against the City of New York (City) and the New York City Department of Education (Department of Education), plaintiff alleges claims of disparate treatment, hostile work environment and constructive discharge based on sexual orientation, gender and/or age, and retaliation for complaining of the discrimination. His claims were brought under Title VII, the ADEA and New York State Human Rights Law (SHRL) and New York City Human Rights Law (CHRL).

Defendants filed a motion to dismiss all of the plaintiff's claims, specifically arguing that sexual orientation is not covered by Title VII's anti-discrimination provisions.

As a preliminary matter, the district court dismissed all claims against the City, noting that it was a separate legal entity from the Department of Education. Since sexual orientation is not a protected class under Title VII and it is well settled in the Second Circuit that Title VII does not prohibit sexual orientation discrimination or harassment, the court dismissed the plaintiff's discrimination and harassment claims based on sexual orientation. The court also dismissed the federal age and gender discrimination claims.

However, the court denied the Department of Education's motion to dismiss the Title VII retaliation claim, holding that complaining of discrimination based on sexual orientation can constitute protected activity under Title VII.

The district court acknowledged that courts are divided on the question, with the Ninth Circuit and two district courts in the Second Circuit finding that complaints of discrimination based on sexual orientation are protected under Title VII, and the Sixth and Seventh Circuits reaching the opposite conclusion. In so holding, the court reasoned that:

The court's decision emphasizes an emerging split of opinion among courts across the US that have addressed retaliation claims involving sexual orientation under Title VII. In this evolving area of the law, employers may face uncertainty as to the breadth of Title VII anti-retaliation remedies available to employees. Pending a conclusive resolution to the question, employers should exercise caution when responding to employee complaints of alleged discrimination based on sexual orientation, as it may constitute protected activity.