I've done some more digging since then, and found out that there is no statute or court opinion in Indiana that explicitly prohibits Indiana cities from creating a local commission. In fact, there is a state statute that explicitly permits the creation of such commissions. However, the matter is not simple in the Hoosier State, and it would be going too far to say that the issue is clear.
Are State Statutes Preempted?
Before I get to Indiana, I have a broader question that came to mind. Why doesn't the federal anti-discrimination statute (Title VII) pre-empt state statutes on the subject?
I found a simple answer: Title VII itself specifically states that it does not preempt broader state or city law on the subject. (42 U.S.C. 2000e-7) It would have been nice if the Indiana civil rights statute made a similar pronoucement, but no such luck.
Are Local Civil Rights Commissions Permitted?
As far as establishing local civil rights commissions, it's a state issue, so each state can make a different rule. The states are split on the issue, with some allowing and some not. Courts in Utah, Nebraska, Maryland and Delaware say no, so the question of whether local commissions may include gender identity doesn't even arise. However, courts in Washington, Illinois and Kentucky say yes, and it's there that the issue of preemption is active.
In regard to the specific question of adding sexual orientation/gender identity to the city ordinance, courts in DC, Kansas, NY, and Fla say yes, whereas Wisconsin, California, Massachusetts, Minnesota and Georgia say no. [These cases involved regulation of private businesses, and I note that application to city workers alone is far easier to justify. If you want to look this stuff up, I got my information from Professor David Barron's article "Reclaiming Home Rule." (116 Harvard Law Review 2255, 2352)]
Most recently, this issue was raised in Allentown, PA, and the Pennsylvania appeals court said that Allentown's statute protecting gender identity and sexual orientation was A-OK. (Hartman v. City of Allentown, 880 A.2d 737 (Pa.Cmwlth. 2005)
What about Indiana?
There are about a dozen preemption decisions in Indiana discussing various types of statutes, with some decisions saying yes and some saying no. It all comes down to whether or not you think that the state civil rights statute is "intended to occupy the field completely," thus leaving no room for the addition of gender identity and sexual orientation. Fortunately, the Indiana statutory scheme creating the state civil rights commission provides some clues.
The Indiana Civil Rights statute provides explicitly that cities may establish an ordinance to establish a local civil rights commission:
Indiana Code 22-9-1-12.1
(b) Any city, town, or county is hereby authorized to adopt an ordinance or ordinances, which may include establishment or designation of an appropriate local commission, office, or agency to effectuate within its territorial jurisdiction the public policy of the state as declared in section 2 of this chapter without conflict with any of the provisions of this chapter.
So there is no problem with having a civil rights commission in an Indiana city. The statute explicitly says that the establishment of the commission is "without conflict with any of the provisions of this chapter."
But what's this about "to effectuate within its territorial jurisdiction the public policy of the state as declared in section 2 of this chapter." What does section 2 say? Here it is:
Indiana Code 22-9-1-2
Sec. 2. (a) It is the public policy of the state to provide all of its citizens equal opportunity for education, employment, access to public conveniences and accommodations, and acquisition through purchase or rental of real property, including but not limited to housing, and to eliminate segregation or separation based solely on race, religion, color, sex, disability, national origin or ancestry, since such segregation is an impediment to equal opportunity. Equal education and employment opportunities and equal access to and use of public accommodations and equal opportunity for acquisition of real property are hereby declared to be civil rights.
(The rest of section 2 is long, so I omit it here.)
Let's start with the first clause of subsection (a), which says that the public policy of Indiana is to provide all of its citizens equal opportunity for education, employment, etc. There is no limitation by protected categories, such as race, religion, etc. Gender identity and sexual orientation, or anything else, could certainly be part of the public policy as far as this part goes. Reading only this part, a local commission could very reasonably interpret its job as promoting equal opportunity on grounds including gender identity and sexual orientation. This alone gives the city council the right to add gender identity and sexual orientation.
Of course, there is always a counter-argument. One could argue that there is a limitation to specific protected categories because the subsection goes on to say that the public policy also includes elimination of segregation based solely on "race, religion, color, sex, disability, national origin or ancestry." This clause contains a specific list of grounds upon which segregation is to be eliminated. Mentioning a specific list, particularly a long one like this, is sometimes considered to exclude other items, although a court might allow another item that is closely related to the items on the list.
Are gender identity and sexual orientation related to the items in the list? Some will say no, because the list covers identity categories only, and not behavior or lifestyles. Others will say yes, because being gay or transgender is an identity rather than a choice, and, either way, the list includes religion, which is a choice. Depends on your bias. Fortunately, since I have no bias, I'm guessing that the more logical position is that the statute will allow inclusion of gender identity and sexual orientation.
But wait....we're not done yet. I see two more twists, and one favorable to the GLBT crowd and one unfavorable.
Indiana Code 36-1-3-3
...any doubt as to the existence of a power of a unit (county, city or township) shall be resolved in favor of its existence.... This rule applies even though a statute granting the power has been repealed.
This statute means that even though there is some small doubt as to the power of the city to include gender identity or sexual orientation, the question should be resolved in the city's favor. This shows that the exercise of such power by the city is proper.
On the other hand....
Indiana Code 36-1-3-8
(a) Subject to subsection (b), a unit (meaning a county, city or township) does not have the following: (7) The power to regulate conduct that is regulated by a state agency, except as expressly granted by statute.
According to this statute, the city must stick to the express power granted by the statute. Since the statute did not expressly grant the power to regulate gender identity or sexual orientation, the city does not have the power. This shows that the exercise of the power by the city is improper.
Ow, I think I hurt my brain.
The Law of OzAll this is to say that the Law is like the famous Scarecrow of Oz.
[Those in Indiana can review the script at the Lilly Library at Indiana University, which owns one of the largest collections of Ozania in the world.]
DOROTHY: Follow the Yellow Brick Road? Follow the Yellow....?
SCARECROW (points to left): It's pleasant down that way, too.
DOROTHY: That's funny. Wasn't he pointing the other way?
SCARECROW: (points in both directions at once) Of course, people do go both ways!
DOROTHY: Why...you did say something, didn't you?
SCARECROW shakes his head no, then nods yes
DOROTHY: Are you doing that on purpose, or can't you make up your mind?
SCARECROW: That's the trouble. I can't make up my mind. I haven't got a brain -- only straw.
(Cue music: "If I Only Had A Brain")
