The law is nothing if not evolutionary. On April 20, 2012, the EEOC did its part in continuing the evolutionary process of extending the application of Title VII to a broader set of protected categories. In Macy v. Eric Holder, Agency No. ATF-2011-00751, 2012 WL 1435995, the EEOC held that a complaint of discrimination based on an applicant’s status as a transgender female is fully contained within the Title VII protections against sex discrimination.

This case arises under the EEOC’s role as appellate adjudicator for federal agencies’ EEO complaints. A transgender female (“Macy”) applicant for an agent position with the Bureau of Alcohol, Tobacco, Firearms and Explosives (“Agency”) was at first told she was qualified for the position. After informing the Agency of her transgender status, however, her putative offer was rescinded. She filed a formal complaint with the Agency alleging discrimination on the basis of sex and on the basis of transgender status. Although the Agency’s obligations not to discriminate reach transgender status, the Agency held that such a claim would be processed under its review structure for claims that are not protected under Title VII, a procedure that does not provide the same protections as Title VII. Macy disagreed that her claim was anything other than a Title VII claim, and took the procedural steps necessary to propel the issue to the Commission for review.

Following the procedural statement of the case, the EEOC begins its analysis with the bold statement that “claims of discrimination based on transgender status,  also referred to as claims of discrimination based on gender identity, are cognizable under Title VII’s sex discrimination prohibition, and may therefore be processed under Part 1614 of EEOC’s federal sector EEO complaints process.” Although this statement is in response to a claim processed under its obligation to resolve federal agency cases as an adjudicator, the EEOC’s pronouncement is unequivocal and clear. Claims of discrimination based on gender identity, notwithstanding the lack of legislative clarity in the statute, are covered by Title VII.

The EEOC relied heavily on two Supreme Court cases to extend coverage of the statute to transgender claims. In Price Waterhouse v. Hopkins, 490 U.S. 228 (1989),¹ the Supreme Court made clear that “sex” discrimination necessarily included the term “gender,” ensuring that all aspects of being male or female, including biological make-up as well as social and cultural characteristics, were covered under the law. Deciding not to make a woman a partner because she did not act as others thought a woman should act was clearly “sex discrimination” as much as if the decision had been based on the fact that she was a woman, according to Price Waterhouse. This gender stereotyping has been supported by numerous court decisions over the years as resulting in unlawful discrimination of the kind prohibited by Title VII.

Next, the Commission addresses the fact that Congress obviously has not included a specific reference to transsexual individuals in the statute. Citing to the Supreme Court’s decision inOncale v. Sundowner Offshore Services, Inc., 523 U.S. 75 (1998), the Commission noted that “statutory prohibitions often go beyond the principal evil [they were passed to combat] to cover reasonably comparable evils, and it is ultimately the provisions of our laws rather than the principal concerns of the our legislators by which we are governed. Title VII prohibits “discriminat[ion] … because of … sex” in … employment. [This] … must extend to [sex-based discrimination] of any kind that meets the statutory requirements.” 523 U.S. at 79-80.

The Commission’s ruling is the first of its kind extending specific Title VII protection to claims based on transsexual identity. The immediate effect of this decision is that federal employers are directly subject to its precedent. Although this decision is not binding on non-federal employers, it is certain that the EEOC’s interpretation will be carefully reviewed and, sooner or later, likely adopted by the courts that have yet to extend Title VII to such cases. To date, the courts’ review of transgender discrimination claims are mixed, although in recent years the decisions have been more favorable. One such decision, relied upon heavily by the EEOC, is the Eleventh Circuit’s 2011 ruling in Glenn v. Brumby, 663 F.3d 1312 (11^th Cir. 2011). In Glenn, the court found that “discrimination against a transgender individual because of her gender-nonconformity is sex discrimination, whether it's described as being on the basis of sex or gender.” Glenn, along with several other recent cases cited in the Macy ruling, provide a strong indication that other courts likely will turn the tide to wide recognition of sex discrimination claims based on transgender status. Accordingly, with this EEOC decision and the probability that courts will follow it, even private employers should be prepared to face a significant increase in claims from individuals with transgender status in the near future.

¹The Price Waterhouse decision has been superseded, in part on other grounds, by the Civil Rights Act of 1991.