On April 21, 2014, the U.S. District Court for the Eastern District of Michigan ruled that the EEOC may proceed with sex discrimination claims on behalf of a transgender plaintiff. This litigation is one of two actions filed by the EEOC in September 2014 alleging that employers violated Title VII by discriminating against transgender employees on the basis of sex.

While the EEOC acknowledges that transgender status is not explicitly protected under Title VII provisions, the Commission has taken the position since 2012 that discrimination against an individual because that person is transgender nevertheless constitutes sex discrimination under the theory of sex-stereotyping, i.e., taking an adverse action against an employee on the basis of that person’s nonconformance to sex- or gender-based preferences.

Federal Courts Permit Transgender Plaintiffs’ Claims under Sex Stereotyping Theory 

The Commission’s two federal complaints, EEOC v. Lakeland Eye Clinic, P.A. (No. 8:14-cv-2421) in the Middle District of Florida and EEOC v. R.G. & G.R. Harris Funeral Homes, Inc. (No. 2:14-cv-13710) in the Eastern District of Michigan, both involve transgender women who allege they were fired soon after notifying their employers that they would begin transitioning from presenting as a man to presenting as a woman. The parties settled the Florida case, but the Michigan litigation is continuing after the court’s denial of the employer’s motion to dismiss. While reiterating that “transgender” is not a protected status under Title VII, the court noted a Sixth Circuit decision holding that an employer’s treatment of a transgender employee in consideration of the employer’s sex- or gender-based preferences, expectations, or stereotypes, i.e., sex stereotyping, is actionable under Title VII. District courts in the Third, Fifth, and D.C. circuits have also held that sex stereotyping is a viable theory for transgender employees and allowed those employees’ Title VII claims to survive dismissal. 

Employer Takeaways 

Given the EEOC’s increased focus on transgender workers’ rights, employers should revisit their policies, such as dress code and grooming policies, to consider how they may affect transgender employees. In addition to prohibiting discriminatory treatment of transgender employees with respect to hiring, firing, and compensation decisions, employers should also develop, or improve upon, their protocol for handling an employee’s gender transition. A recent EEOC administrative decision (in which it found that the Army discriminated against a transgender employee) provides guidance on the type of employer actions that are likely to constitute unlawful discrimination against a transitioning employee: 

• An employer should not limit a transgender employee’s access to a single stall restroom, even if equal in quality to the common restrooms.

• An employer should not condition recognition of a transgender employee’s gender identity (i.e., the name or pronoun used when addressing the employee) on that individual’s completion of certain surgical procedures that render the individual physically male or female.

• An employer may be held liable for harassment if supervisors or coworkers refuse to address the transgender employee by his or her transgender name and/or by pronouns that are associated with that individual’s desired gender identification.