Transgender Rights: A New Area of Focus for Employers

Currently, there is no explicit federal protection for sexual orientation, gender identity, or expression* but that may change soon. On November 7, 2013, the Senate passed the Employment Non-Discrimination Act of 2013 (ENDA) (S. 815), which was first introduced by the late Senator Edward T. Kennedy in 1994. Although ENDA may encounter difficulties in the House, on November 20, 2013, 14 state attorneys general, led by New York’s Eric Schneiderman, encouraged House Speaker John Boehner to bring ENDA to the House floor for a vote. The principal provisions of ENDA are as follows:

1. Prohibitions. ENDA prohibits private employers of 15 or more and public employers from firing, refusing to hire, or discriminating against job applicants or employees on the basis of perceived or actual sexual orientation or gender identity. Retaliation against such individuals is also prohibited.
2. Definitions. ENDA defines gender identity as “the gender-related identity, appearance, or mannerisms or other gender-related characteristics of an individual with or without regard to the designated sex at birth.” Sexual orientation is defined as “homosexuality, heterosexuality, or bi-sexuality.”
3. Enforcement and Remedies. ENDA would be enforced by the EEOC, and the prevailing party would be entitled to the same damage remedies available under Title VII of the Civil Rights Act of 1964 et seq. (Title VII), as well as attorney fees.

Despite the lack of explicit federal protection, the EEOC has consistently found that transgender discrimination and harassment is sex discrimination and, therefore, covered by Title VII. The seminal case is Macy v. Holder, 2012 WL 1435995 (EEOC April 20, 2012), where the EEOC ruled that claims of gender identity discrimination are a form of sex discrimination. The rule arose from a complaint brought by the Transgender Law Center on behalf of Mia Macy, a transgender woman, against the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). Macy was a police detective in Phoenix, Arizona, who was trained in ballistics. She applied for an open position in the crime lab at the ATF as a male wearing male business attire. After being assured that the job was hers, the job offer was withdrawn after she disclosed that she was now a female and would report to work in female clothing. The EEOC took the position that discrimination against a transgender worker constitutes sex discrimination based on gender stereotypes. Ms. Macy was awarded reinstatement, back pay and benefits with interest, compensatory damages, and attorney fees. The ATF was required to take corrective action to ensure such discrimination does not repeat itself. The Department of Justice accepted the EEOC’s ruling on May 21, 2012.

More recently, on September 16, 2013, the Minneapolis-area EEOC announced that a South Dakota supermarket owner had agreed to pay $50,000 to Corie McCreery, a former employee, who was fired immediately after informing the owner that she was transitioning from male to female. According to the EEOC, the owner said that McCreery made other employees “feel uncomfortable.” After an investigation, the EEOC found “reasonable cause” to believe that the company had violated Title VII’s prohibitions against sex discrimination. The matter was then resolved through a conciliation agreement, which, in addition to the $50,000 payment to McCreery, required the employer to provide professional anti-discrimination training annually for its employees, implement and distribute an anti-discrimination policy to all employees, and report all future complaints of discrimination to the EEOC. The conciliation agreement also required the employer to provide McCreery with a written letter of apology and a neutral letter of reference.

Since there will certainly be more cases of transgender discrimination as public opinion shifts, employers should consider the following steps:

1. Employers in states and cities where sexual orientation and gender identity are protected should ensure that both are included in their non-discrimination policies.
2. Even in states and cities where sexual orientation and gender identity are not recognized, employers may want to include them in their policies since the EEOC is taking the position that discrimination can be a form of sex discrimination and gender stereotyping.
3. Employers should consider taking steps to sensitize their employees to gender identity-related issues within the context of anti-harassment training programs.

In conclusion, even if ENDA does not pass quickly, employers must be aware of the EEOC’s position and take steps now to prevent risk to their organizations.

*Seventeen states and the District of Columbia prohibit employment discrimination based on sexual orientation and gender identity including: California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Iowa, Main, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, Oregon, Rhode Island, Vermont and the State of Washington. Four other states ban discrimination based on sexual orientation but not gender identity. They are Maryland, New Hampshire, New York and Wisconsin. Approximately 150 municipalities also prohibit one or both.