Whether Title VII's prohibition on discharging an individual "because of" that individual's sex bars an employer from firing an employee merely for being homosexual or transgender.
Holding
Yes. An employer that intentionally fires an individual merely for being gay or transgender violates Title VII.
Reasoning
The Court began with Title VII's text: an employer may not discharge or otherwise discriminate against an individual because of that individual's sex. Assuming, as the employers urged, that "sex" in 1964 referred to biological distinctions between male and female, the statutory phrase "because of" still incorporates ordinary but-for causation. Sex need not be the sole, primary, or most obvious cause of the decision; it is enough that changing the employee's sex would have changed the employment outcome.
Title VII addresses intentional disparate treatment of individuals, not merely unequal treatment of men and women as groups. Thus, an employer violates the statute when it intentionally treats one employee worse in part because of that employee's sex, even if the employer applies a facially similar rule to both male and female employees or treats the sexes comparably in the aggregate.
Discrimination because of homosexuality necessarily requires consideration of sex. If an employer fires a man for being attracted to men but would retain a woman attracted to men, the employee's sex is a but-for cause of the discharge. The employer cannot avoid that conclusion by saying its ultimate objective was to discriminate based on sexual orientation rather than sex; implementing that objective necessarily applies a sex-based rule.
The same is true for discrimination against transgender persons. If an employer penalizes a person identified as male at birth for living as a woman while accepting the same conduct from a person identified as female at birth, the employer treats the first person differently in part because of sex. Transgender-status discrimination therefore necessarily entails intentional sex discrimination against the affected individual.
The Court found confirmation in Phillips v. Martin Marietta Corp., Los Angeles Department of Water and Power v. Manhart, and Oncale v. Sundowner Offshore Services. Those decisions establish that Title VII reaches discrimination involving an additional trait or motive, protects individuals rather than groups, and applies even when the particular form of discrimination was not the principal evil Congress had in mind.