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Transgender Workers Gaining Legal Ground

The Connecticut Law Tribune
July 27, 2015

In light of the Supreme Court’s recent decision in Obergefell v. Hodges legalizing same-sex marriage throughout the United States, this is a good time for employers to review their policies relating to another group for whom the legal landscape has begun to change significantly – transgender individuals.  While most courts have held that federal law does not prohibit discrimination on the basis of transgender status, government agencies and even the courts have begun moving in the 0pposite direction.  In addition, there are other important ways in which transgender employees have received legal protection.

Does Federal Law Protect Transgender Employees?

Are employees protected from discrimination on the basis of transgender status by Title VII?  While the traditional answer is no, more and more courts are saying yes.  Title VII does not expressly prohibit discrimination on the basis of transgender status, and most courts have declined to read such protection into the statute.  However, a seminal 1989 Supreme Court opinion, Price Waterhouse v. Hopkins, held that “sex stereotyping” – expecting employees to act or dress in a manner perceived normal for their gender and, in that case, failing to promote a woman who did not do so – was sex-based discrimination prohibited under Title VII.

In the last several years, a number of cases have ruled in favor of transgender employees on the basis of the Price Waterhouse theory.  In Smith v. City of Salem, a transgender firefighter diagnosed with Gender Identity Disorder regularly came to work dressed in a feminine manner.  Her co-workers told her her appearance and mannerisms were not masculine enough and she was ultimately suspended.  Smith sued, alleging Price Waterhouse-style sex stereotyping under Title VII.  The district court rejected her argument, claiming she was attempting to do an end-run around her true claim of discrimination based on her transgender status.  However, the Sixth Circuit reversed, holding Price Waterhouse protected employees from sex stereotyping whether or not the employee was transgender.  Notably, the court explained, “After Price Waterhouse, an employer who discriminates against women because, for instance, they do not wear dresses or makeup, is engaging in sex discrimination because the discrimination would not occur but for the victim’s sex. It follows that employers who discriminate against men because they do wear dresses and makeup, or otherwise act femininely, are also engaging in sex discrimination, because the discrimination would not occur but for the victim’s sex.”

In a similar case, Glenn v. Brumby, the Eleventh Circuit held that a legislative editor for the Georgia Assembly was unlawfully terminated due to her transgender status.  The editor, biologically male, intended to begin regularly coming to work dressed as a woman.  This disturbed her supervisor, who felt that “‘it’s unsettling to think of someone dressed in women’s clothing with male sexual organs inside that clothing,’ and that a male in women’s clothing is ‘unnatural.’”  The supervisor terminated the editor because he felt her intended gender transition was “inappropriate” and “disruptive” and would make her coworkers “uncomfortable.”  The Eleventh Circuit found for the editor, holding that, “a government agent violates the Equal Protection Clause’s prohibition of sex-based discrimination when he or she fires a transgender or transsexual employee because of his or her gender non-conformity.”

Cases like these demonstrate courts’ opinions regarding transgender individuals are changing.  Even if the protections are not derived from the individuals’ transgender status per se, but rather from the “sex stereotyping” made unlawful in Price Waterhouse, the takeaway is the same.  An employer who wishes to terminate a poor-performing transgender employee should document the work-related issues so the employer can later prove, if necessary, that the termination was based on the employee’s performance and not gender conformity.

Government Agencies Are Actively Advocating That Transgender Discrimination Is Prohibited

Government agencies tasked with policing employment laws have been more aggressive than the courts.  Since 2012, the Equal Employment Opportunity Commission (“EEOC”) has held that discrimination based on an individual’s transgender status is tantamount to sex-based discrimination and therefore prohibited by Title VII.

The EEOC originally took this position in its 2012 decision Macy v. Holder, involving a male-to-female police officer who applied for a job with the Bureau of Alcohol, Tobacco, Firearms, and Explosives.  Last fall, the EEOC filed its first two federal lawsuits involving transgender rights.  In both cases, the EEOC not only alleged the terminations were unlawful because the employee was transgender and undergoing gender transition, but also, in accordance with the precedents discussed above, because the employee did not conform to the “gender-based expectations, preferences, or stereotypes” of the employer.

In one of these cases, EEOC v. Lakeland Eye Clinic, P.A., the issue involved a male-to-female transgender employee at a medical clinic in Florida.  The employee had a track record of strong performance but was terminated after she began dressing as a woman and informed the clinic she was transgender.  The clinic reached a settlement with the EEOC in April 2015 in which it agreed to pay $150,000, implement a new gender discrimination policy, and provide transgender/gender stereotype discrimination training to its employees and management.

The other case, EEOC v. R.G. & G.R. Harris Funeral Homes Inc., involved a male-to-female funeral home director/embalmer who was fired after telling her employer she was undergoing a gender transition and would soon come to work dressed as a woman.  The EEOC’s lawsuit recently survived a motion to dismiss.  The Eastern District of Michigan ruled that transgender status is not a protected class under Title VII.  However, following Smith and another Sixth Circuit transgender case, Barnes v. City of Cincinnati, it ruled the EEOC’s claim could stand because a transgender person could bring a sex stereotyping claim under Price Waterhouse just like a non-transgender person.

Official support of the EEOC’s position is growing slowly.  At the end of last year, the Department of Justice issued an internal memorandum announcing its adoption of practically the same interpretation of Title VII as the EEOC’s.

While official approval of the EEOC’s position is growing slowly, the increasing adoption of the sex stereotyping theory makes that distinction nearly moot.  Whichever way you view it – transgender discrimination or sex stereotyping – terminating an employee for dressing or acting in non-conformity with the sex assigned to him/her at birth is more and more likely to be found unlawful.

What Kinds Of Policies Need to Conform With Transgender Issues?

So what does all this mean for employers?  What are their obligations with respect to transgender employees and company personnel policies?

One issue that often arises is restroom use.  More and more, courts and agencies are taking the position that transgender employees should be allowed to use the restroom consistent with their expressed gender identity, but this is not always the case.

For example, a California court held in 2014 that under California law, it was unlawful for a company to ask a female-to-male applicant to delay his employment start date because they did not want him using male restrooms and locker rooms until after he completed his sex reassignment surgery.  On the other hand, the Minnesota Supreme Court held in a 2001 case that designating employee restroom use based on biological gender is not unlawful.  In that case, Goins v. West Group, the employer prohibited a male-to-female employee from using women’s restrooms due to concerns raised by female employees and instead asked her to use single occupancy restrooms.  The court refused to read the Minnesota Human Rights Act as requiring designation of restrooms based on what it termed self-image of gender instead of biological gender.

The EEOC recently issued a decision declaring that restricting a transgender employee to the use of a single occupancy bathroom was unlawful under Title VII.  Lusardi v. McHugh involved an employee transitioning from male to female who worked at the U.S. Army Aviation and Missile Research Development Engineering Center (the “Center”).  She originally agreed to a transition plan in which she would use a single occupancy restroom until she underwent surgery, but used the women’s restroom on several occasions when the single occupancy restroom was out of order or being cleaned.  Each time she did so, she was told she was “making people uncomfortable” and could not use the women’s restroom until “she could show proof of having undergone the ‘final surgery.’”

The EEOC ruled that the employee was subjected to sex-based disparate treatment in violation of Title VII.  Regarding the Center’s requirement that the employee use the single occupancy restroom until she proved she had undergone the “surgery,” the EEOC held that, “Nothing in Title VII makes any medical procedure a prerequisite for equal opportunity (for transgender individuals, or anyone else).  An agency may not condition access to facilities – or to other terms, conditions, or privileges of employment – on the completion of certain medical steps that the agency itself has unilaterally determined will somehow prove the bona fides of the individual’s gender identity.”  The EEOC found that prohibiting the employee from using the women’s restroom was an adverse employment action.  Because the EEOC found this adverse employment action was taken based on the employee’s sex (consistent with its position in the Macy decision), it was a violation of Title VII.

While this case dealt with a government agency, the reasoning likely applies to private employers as well.  The EEOC itself stated the section of Title VII it relied on for federal employers is analogous to the Title VII section dealing with private employers.

Here in Connecticut, refusing to hire, terminating, or discriminating against an employee in compensation or the terms, conditions or privileges of employment on the basis of gender identity is considered a discriminatory employment practice under the anti-discrimination law in the Connecticut General Statutes.  This was added to the law in the last few years so hopefully the courts will soon provide clarity on whether issues relevant to transgender employees, such as restroom use, are considered “terms, conditions or privileges” of employment.  The EEOC stated in Lusardi that, “Equal access to restrooms is a significant, basic condition of employment” and prohibiting an employee from using restrooms that other employees of their preferred gender use is a “harm or loss with respect to the terms and conditions of…employment.”  If Connecticut courts interpret our State statutes in a comparable manner, then employers will likely be unable to lawfully prohibit transgender employees from using the restroom of their identified gender.

Another issue of concern is whether dress code policies can lawfully be enforced against transgender employees.  Can employers adopt gender-specific dress and grooming codes and require transgender employees to conform to the dress/grooming code of their biological gender?  Interestingly, some courts have ruled yes.

An Indiana federal court found in favor of the employer in just such a case.  Creed v. Family Express Corporation involved a male-to-female transgender employee who failed to follow Family Express’s dress code.  The employee grew her hair out and wore clear nail polish and black mascara.  Family Express’s dress code stated men could not wear hair below the collar and prohibited earrings and other jewelry.  Female employees could grow their hair out below the collar and could wear conservative and business-like makeup and jewelry.  The company eventually asked the employee to cut her hair and refrain from wearing makeup and nail polish.  One company representative asked if it would “kill her” to appear as a man at work.  When the employee refused, she was terminated.  The employee sued, alleging unlawful sex stereotyping.  After finding the employer’s dress code was lawful under Title VII, the Court rejected the employee’s sex stereotyping claim.  Because the company did not ask the employee to conform to general gender stereotypes, but merely enforced its dress code policy, the court found its actions lawful.  In doing so, it distinguished between failure to conform to gender stereotypes (which is prohibited under federal precedent discussed above) and breaching a company’s dress code (which the court deemed a lawful basis for termination).

While this case suggests employers can use dress codes to require transgender employees to dress in accordance with their biological gender, employers should be wary.  The differentiation between requiring an employee to conform to sex stereotypes and enforcing gender-specific dress codes may eventually be found a distinction without a difference.  A dress code which requires men and women to essentially dress in masculine and feminine ways, respectively, could be argued to actually be based on exactly the kind of sex stereotyping prohibited by Price Waterhouse.  Therefore, if developments in transgender discrimination law continue along their current path, these types of policies may soon be deemed unlawful.

Navigating this developing, confusing, and sometimes contradictory area of the law can be daunting.  Newly issued court decisions can change the complexion of what is lawful in a heartbeat.  The spectrum of what is lawful can vary from jurisdiction to jurisdiction.  Employers should consult with competent labor counsel prior to implementing any policy involving dress/grooming codes or restroom use or when deciding how to address specific transgender employee requests for related accomodations.

Robert G. Brody is the founder of Brody and Associates, LLC.  Alexander Friedman is an associate at the firm.  Brody and Associates represents management in employment and labor law matters and has offices in Westport and New York City.