With all the recent media coverage of Bruce Jenner’s transition to Caitlyn Jenner, employers should be aware that the issue of transgender employees in the workplace is becoming more and more common.  Regardless of one’s view on the subject, employers need to realize that they can find themselves in hot water by improperly dealing with a transgender employee.  A recent case filed by the EEOC illustrates this problem.   

On June 4, 2015, the EEOC filed a complaint in U.S. District Court for the District of Minnesota alleging that Deluxe Financial Services, Inc. (“Deluxe”) violated federal law by subjecting a female, transgender employee to sex discrimination. More specifically, the EEOC alleged that Deluxe subjected the employee to different terms and conditions because of sex and subjected her to a hostile work environment because of sex. In addition, the EEOC alleged that Deluxe “had, and continues to maintain, a companywide policy or practice that discriminates against transgender female employees by precluding them use of a restroom that is consistent with their sex.”

The EEOC brought the case on behalf of Britney Austin, an employee of Deluxe, who was allegedly diagnosed with gender dysphoria.  According to the Complaint, when Austin had first applied at Deluxe and during her first several years of employment, she presented herself as a male with a traditional male name. In late 2010, Austin announced to her supervisor that she would begin presenting herself at work as a female. Soon thereafter, Austin began hormone therapy and provided Deluxe with the documentation of her gender dysphoria diagnosis. In addition, Austin requested to begin using the women’s restroom and for her sex designation to be changed in internal personnel and communications systems.

According to the Complaint, Deluxe only changed Austin’s information in some—but not all—of its records. As a result, outside vendors, customers, and colleagues referred to Austin by her former male name. The EEOC alleges that Deluxe, “despite [having] receiv[ed] Austin’s medical records, notice of Austin’s legal name change, and a copy of her driver’s license, continued to deny Austin use of the women’s restroom on the premises.”  According to the EEOC, this subjected Austin to disparate treatment due to sex either because Austin did not conform to Deluxe’s sex or gender-based stereotypes of women or because of Deluxe’s sex or gender-based expectations related to individuals assigned the male sex at birth.  Additionally, the EEOC claims that some of Austin’s co-workers and managers “repeatedly and intentionally referred to Austin with male pronouns and made derogatory statements about her female appearance,” thus creating a hostile work environment.  Despite Austin’s complaints, the harassment allegedly continued undeterred and without punishment.

This is the third lawsuit recently filed by the EEOC in its ongoing efforts to include “coverage of lesbian, gay, bisexual and transgender individuals under Title VII’s sex discrimination provisions,” a top priority of the EEOC’s Strategic Enforcement Plan since December 2012. In April, one of the EEOC’s other lawsuits settled for $150,000. In the remaining suit, the court recently denied the employer’s motion for summary judgment because the court found that the EEOC did, in fact, sufficiently state a case for sex-stereotyping gender discrimination under Title VII.

Although transgender/transsexual status is currently not a protected class under Title VII, courts have held that employers may nevertheless discriminate against employees who do not act in accordance with or identify with their perceived sex or gender.   Because the EEOC has made it clear that it will continue to pursue alleged sex discrimination cases based on transgender status and gender stereotyping, employers should be sure to consult legal counsel of their choice if they have a question about their obligations to transgender employees.