In reaching this decision, the EEOC held, "[s]exual orientation discrimination is sex discrimination because it necessarily entails treating an employee less favorably because of the employee's sex." In reaching its conclusion, the Commission held "[d]discrimination on the basis of sexual orientation is premised on sex-based preferences, assumptions, expectations, stereotypes, or norms. 'Sexual Orientation' as a concept cannot be defined or understood without reference to sex," which is language from the landmark Supreme Court case of PriceWaterhouse v. Hopkins, 490 U.S. 228 (1989).
The EEOC also addressed previous court decisions that rejected the argument that Title VII applied to sexual orientation discrimination because Congress, in 1964, did not intend Title VII to apply to sexual orientation and, therefore, Title VII could not be interpreted to prohibit such discrimination. The EEOC also rejected other court of appeals decisions that relied on the fact that Congress has debated, but not yet passed, legislation explicitly providing protections for sexual orientation (referring to the Employment Non-Discrimination Act (ENDA)), holding instead:
[t]he idea that congressional action is required (and inaction is therefore instructive in part) rests on the notion that protection against sexual orientation discrimination under Title VII would create a new class of covered persons. But analogous case law confirms this is not true. When courts held that Title VII protected persons who were discriminated against because of their relationships with persons of another race, the courts did not thereby create a new protected class of "people in interracial relationships."