Human Resources and Law

Is transgender the new protected class?

January 29, 2016
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While Laverne Cox, the transgender star of the hit series “Orange is the New Black,” is bringing transgender awareness to America, federal courts, the Equal Employment Opportunity Commission and the U.S. Department of Labor have been bringing transgender awareness to America’s employers for quite some time. And it appears the movement will continue.

In 1989, the U.S. Supreme Court established gender stereotyping is actionable as sex discrimination when it issued its decision in Price Waterhouse v. Hopkins. Although the case did not involve a transgender worker, it did involve a female manager who was passed over for promotion because she was deemed too “macho.” She was criticized for being “overly aggressive” and “unduly harsh” in her dealings with staff, and she was advised to “walk more femininely, talk more femininely, dress more femininely, wear makeup, have her hair styled and wear jewelry” if she wished to make partner. She resigned and sued Price Waterhouse for sex discrimination under Title VII of the Civil Rights Act of 1964.

The Supreme Court held that Price Waterhouse must prove the decision regarding employment would have been the same if sex discrimination had not occurred. Price Waterhouse failed to prove it would have made the same decision to postpone the promotion to partnership in the absence of sex discrimination, and therefore, the employment decision constituted sex discrimination under Title VII.

Despite the Supreme Court’s holding in Price Waterhouse, courts routinely dismissed sex stereotyping claims brought by transgender persons throughout the 1990s and early 2000s.

In 2004, however, the Sixth Circuit Court of Appeals, which covers Kentucky, Michigan, Ohio and Tennessee, adopted the proposition that discrimination based on sex includes discrimination based on a person’s gender nonconforming behavior in its Smith v. City of Salem decision.

In that case, the plaintiff was a transgender firefighter who sued the city of Salem for sex discrimination after city officials required her to undergo psychiatric testing concerning her transsexuality. The lower court dismissed her sex-stereotyping claim on the grounds that she had been discriminated against on account of her transsexuality rather than her gender nonconformity. On appeal, the Sixth Circuit held the court “erred in relying on a series of pre-Price Waterhouse cases … holding that transsexuals, as a class, are not entitled to Title VII protection,” and asserted the rationale underlying these cases had been “eviscerated by Price Waterhouse.” The Sixth Circuit further held the Price Waterhouse decision “does not make Title VII protection against sex stereotyping conditional or provide any reason to exclude Title VII coverage for non-sex-stereotypical behavior simply because the person is a transsexual.”

The U.S. District Court for the District of Columbia in Schroer v. Billington similarly upheld transgender employment rights in 2008, and by the Eleventh Circuit in Glenn v. Brumby in 2011. In Schroer, the court found discrimination on the basis of an individual’s intent to transition from one sex to another “was literally discrimination because of sex.” In Glenn, the Eleventh Circuit cited Price Waterhouse for the proposition that “discrimination on the basis of gender stereotype is sex-based discrimination,” and noted, “a person is defined as transgender precisely because of the perception that his or her behavior transgresses gender stereotypes.”

In 2012, the EEOC issued a decision endorsing the notion that discrimination on the basis of an individual’s transgender status violates Title VII as unlawful sex stereotyping in Macy v. Holder. The plaintiff, a male-to-female transgender, was offered employment with the Bureau of Alcohol, Tobacco, Firearms & Explosives while she was still presenting as a man. When she informed the agency she was in the process of transitioning from male to female, the agency decided to hire someone else. The EEOC concluded that “intentional discrimination against a transgender individual because that person is transgender is, by definition, discrimination ‘based on … sex’ and such discrimination therefore violates Title VII.”

On July 21, 2014, President Barack Obama signed an executive order expanding protections for federal workers and contractors from discrimination based on sexual orientation and gender identity. On Aug. 19, 2014, the U.S. Department of Labor issued guidance to clarify discrimination by federal contractors on the basis of sex includes discrimination on the bases of gender identity and transgender status. These actions demonstrate that Obama and the U.S. Department of Labor, along with federal courts and the EEOC, have become increasingly willing to protect the rights of transgender persons in the workplace.

In Michigan, the Elliott-Larsen Civil Rights Act does not expressly prohibit discrimination based on gender identity and transgender status; however, recent federal court and EEOC decisions may give employees an opportunity to sue if they believe they have suffered discrimination based on their transgender status. Such discrimination can be as obvious as adverse hiring, promotion and firing decisions, but employers should be mindful of other forms of discrimination, which transgender people often face. These may include denial of access to restroom facilities that correspond to the transgender employee’s gender presentation, dress codes that perpetuate traditional gender norms, toleration of jokes or derogatory comments about transgender people, use of the wrong name or pronoun, and intrusive or personal questions.

Employers must be aware that federal courts and the EEOC have concluded discrimination because a person is transgender or gender non-conforming constitutes illegal sex discrimination. Because this is an emerging area of the law, which carries the risk of exposure to liability, employers should consult with their labor and employment counsel when faced with these issues to ensure compliance with the law.

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