Transgender Employees: The New Protected Category?

December 2, 2014

By now, most employers are familiar with the list of categories protected from employment discrimination under Title VII of the Civil Rights Act:  race, color, religion, national origin and sex.  Additional categories are protected by other federal anti-discrimination laws:  disability (Americans with Disabilities Act), age (Age Discrimination in Employment Act), pregnancy (Pregnancy Discrimination Act), and genetic information (Genetic Information Nondiscrimination Act).  Absent is any mention of sexual orientation or gender identity. The protections are, of course, broader in New York State.  Under the New York Human Rights Law, discrimination on the basis of sexual orientation (among other things) is also prohibited.  And in New York City, the New York City Human Rights Law prohibits discrimination on the basis of gender identity. Advocacy groups have been clamoring for legislation to protect transgender and lesbian/gay employees on the federal level for years.  The Employment Non-Discrimination Act (ENDA) would explicitly prohibit employment discrimination on the basis of sexual orientation and gender identity, but ENDA (despite versions being introduced in almost every Congress since the 1990s) has never made it to the President’s desk. Enter the EEOC.  Apparently tired of waiting for legislative protection for transgender employees, the EEOC has taken matters into its own hands. Back in April 2012, the EEOC officially took the position that transgender discrimination is a form of gender discrimination in violation of Title VII.  In Macy v. Holder, a case involving an applicant to the Bureau of Tobacco, Firearms and Explosives, the EEOC concluded that the Bureau violated Title VII when it withdrew an employment offer after the candidate revealed she was in the process of transitioning from male to female.  The EEOC reasoned that the term “sex” in Title VII encompasses not only a person’s biological sex, but also the cultural and social aspects associated with masculinity and femininity, and therefore, the law’s prohibition against sex discrimination is broader than discrimination based on biological sex.  The EEOC relied on Price Waterhouse v. Hopkins, a 1989 U.S. Supreme Court decision that established a theory known as “sex stereotyping.”  Under this theory, employers unlawfully discriminate on the basis of gender when they take some action against an employee because he or she does not conform to expected gender stereotypes.  The Macy decision was significant, as it was the first time the EEOC officially took this position regarding transgender discrimination.  However, since Macy was an administrative ruling involving a federal agency, it did not create binding precedent for courts. Later in 2012, the EEOC issued its Strategic Enforcement Plan.  As we wrote here, that plan made “coverage of lesbian, gay, bisexual and transgender individuals under Title VII's sex discrimination provisions” a top enforcement priority. Fast forward to September 2014.  Seemingly eager to create binding court precedent recognizing transgender discrimination as a form of sex discrimination under Title VII, the EEOC filed two lawsuits against employers alleging transgender discrimination.  In EEOC v. Lakeland Eye Clinic (filed in Florida) and EEOC v. R.G. & G.R. Harris Funeral Homes, Inc. (filed in Michigan), the EEOC claims that employees were terminated after informing their employer that they were transgender.  These cases are both in the early stages, but we will monitor and report on any significant developments in those cases. In the meantime, employers should be ready to deal with the issues that arise with transgender employees in their workplace.  It is wrong to assume these employees are not protected just because the terms “transgender” or “gender identity” do not appear in the federal or state employment discrimination laws.  Aside from not making employment decisions based on an employee’s gender identity, there are also accommodation issues to consider.  Should a transitioning employee be allowed to use the restroom corresponding to their gender presentation -- even if it makes other employees uncomfortable?  (Yes.)  Should you change the first name of the employee in your employment records based on a request?  (It depends on the record.)  The questions abound.  Stay tuned for more guidance on these complex issues.