The Lawletter Vol 45 No 2
Virginia is poised to become the first Southern state to prohibit discrimination based on a person's "sexual orientation" or "gender identity." The Virginia Values Act ("VVA") was passed by the General Assembly on February 26, 2020 and is expected to be signed by Governor Ralph Northam. The bill will have a significant impact on the law governing discrimination in employment, public accommodations, housing, banking, and education, and it creates a new cause of action for unlawful discrimination in public accommodations.
The VVA will amend several existing statutes to prohibit discrimination on the basis of sexual orientation and gender identity. "Sexual orientation" is defined as "a person's actual or perceived heterosexuality, bisexuality, or homosexuality," while "gender identity" means "the gender‑related identity, appearance, or other gender‑related characteristics of an individual, with or without regard to the individual's designated sex at birth."
Perhaps most significantly, the VVA expands the Virginia Human Rights Act ("VHRA") to prohibit employment discrimination on the basis of sexual orientation or gender identity. It also adds "status as a veteran" as a protected class in addition to the existing protected classes of race, color, religion, national origin, sex, pregnancy, childbirth, or related medical conditions, age, marital status, or disability. While the current VHRA applies only to employers with 6-14 employees, the VVA expands the law to apply to employers with 15 or more employees. The law also covers employment practices by state and local governments, labor organizations, employment agencies, apprenticeship and training programs, and school boards, but it exempts religious institutions. Notably, the bill provides a "mixed motive" standard, i.e., it prohibits all discriminatory employment practices motivated by one of the covered grounds, even if other factors also motivate the practice in question.
The VVA also prohibits discrimination in places of public accommodation on the basis of sexual orientation, gender identity, or status as a veteran in addition to the existing protected classes. "Places of public accommodation" includes "all places or businesses offering or holding out to the general public goods, services, privileges, facilities, advantages, or accommodations." Excluded from this definition are private clubs, a place of accommodation operated by a religious organization that is not, in fact, open to the public, or any other establishment that is not, in fact, open to the public. In addition, the VVA will amend Virginia statutes regarding fair housing, lending, and credit practices to prohibit discrimination on the basis of sexual orientation, gender identity, or status as a veteran.
The legislation also creates a new cause of action for discrimination in employment on the basis of sexual orientation, gender identity, or status as a veteran and, for the first time, creates a cause of action for discrimination in public accommodations. Under the new law, civil actions may be brought by private individuals or, in cases of "general public importance," the Attorney General. Previous versions of the bill provided for unlimited compensatory and punitive damages in such cases, but following an outcry by the business community, the bill was changed so that Virginia’s $350,000 cap on punitive damages applies. Successful plaintiffs may also recover reasonable attorney's fees and costs, although there is no comparable provision for a prevailing defendant. In cases brought by the Attorney General, a civil penalty of up to $50,000 for the first violation and up to $100,000 for any subsequent violation may be levied against the discriminating employer or business.
While sponsors of the bill and some Virginia businesses argue the protections in the VVA will make the Commonwealth a more competitive place for recruitment and retention of employees, and more attractive for tourism, other groups worry the law will cause businesses to leave Virginia. Many are particularly concerned about the impact on small businesses of the potential costs of defending groundless lawsuits.
If, as expected, the final bill is signed by the Governor, the Virginia Values Act will become effective on July 1, 2020.