Do an employer’s criticisms of a transgender employee’s unruly hair, disheveled clothing, poor writing and speaking skills, and negative client interactions support a discrimination claim based on her failure to conform to a gender stereotype? The U.S. District Court for the District of Colorado recently said no to that question. However, the employee’s termination following a heart attack raised sufficient issues of fact to allow her disability discrimination claim to proceed. 
Employee receives mixed performance reviews
Born male in 1954, Danielle Rice began transitioning to female in 1991. In 1994, she had sex reassignment surgery. She began working for BearingPoint as a senior manager in 2005. Four years later, she became an employee of Deloitte Consulting LLP when it purchased BearingPoint.
Rice claimed that she initially received favorable feedback from Deloitte on her work performance. In August 2009, she received a performance rating of “on track to meet or exceed goals.” Just four months later, however, a second performance review criticized her written and oral communication skills, and she was placed on a performance improvement plan (PIP). She claimed she was successfully meeting the terms of her PIP.
Heart attack follows meeting about performance
In June 2010, Rice received a negative rating during a project performance review and met with her Deloitte counselor, Mike Van Den Eynde, to discuss it. At the meeting, Van Den Eynde apparently told her that her employment with Deloitte wasn’t working out and they needed to part ways and discuss the terms of her separation. The following day, Rice had a heart attack and went on medical leave for eight months, returning in mid-January 2011.
In February, Rice was given her 2010 year-end review, in which she received the lowest possible rating. Van Den Eynde allegedly told her that it would be difficult to come back from that rating and gave her the rest of the week to consider whether to take a last-chance opportunity or termination with severance. On February 28, she allegedly informed Deloitte that she “would transition” from the company. Her employment was terminated in a letter dated March 7, 2011.
EEOC charge alleges Title VII, ADA discrimination
In May 2011, Rice filed a charge with the Equal Employment Opportunity Commission (EEOC) alleging she was terminated because of her disability and her failure to conform to Deloitte’s preferred gender stereotypes. In her sex discrimination claim under Title VII of the Civil Rights Act of 1964, she alleged that she was treated less favorably than similarly situated colleagues who conformed to Deloitte’s gender stereotypes. She asserted that the company’s adverse treatment of her, including her termination, violated Title VII because her gender was a motivating factor in its actions.
In support of her disability discrimination claim, Rice asserted that her heart attack substantially limited a variety of major life activities, including breathing, lifting, and performing some manual tasks. She claimed that she is a person with a disability, has a record of a disability, or was regarded by Deloitte as having a disability under the Americans with Disabilities Act (ADA) and was terminated in violation of the ADA after returning to work from medical leave.
Court rejects gender stereotyping claim
Price Waterhouse v. Hopkins, the landmark Title VII case decided by the U.S. Supreme Court in 1989, set the stage for claims of gender stereotyping discrimination. In that case, a woman was denied partnership by an accounting firm because some of the partners felt she was “macho,” needed “a course at charm school,” and should walk, talk, and dress more femininely, wear makeup, and have her hair styled. The Supreme Court found that such comments are indicative of gender discrimination and that punishing someone for failing to act and appear according to gender expectations is gender stereotyping barred by Title VII. In 2012, the U.S. 10th Circuit Court of Appeals (whose rulings apply to all Colorado employers) stated in McBride v. Peak Wellness Ctr., Inc. that “in a sex stereotyping claim, the [employee] must show that the employer discriminated against her based on her failure to conform to stereotypical gender norms.”
In this case, Rice presented e-mails from a male employee to Van Den Eynde stating that she “lack[ed] any shred of professionalism. From unruly hair to a style of dress that appeared disheveled.” Another e-mail noted concerns about her being “unique/odd in her mannerisms, style and interactions.” Rice also claimed that a male senior manager referred to her using male pronouns during a conference call.
Deloitte asked the court to dismiss the case before trial, arguing it terminated Rice for legitimate business reasons, including her unprofessional appearance, poor written and oral communications, and negative interactions with clients. The district court judge ruled in favor of Deloitte on the Title VII claim, finding that Rice failed to present evidence that the termination decision was based on her failure to conform to stereotypical gender norms.
The judge stated that Rice wasn’t criticized for not being more feminine like the employee in Price Waterhouse; instead, the criticism was focused on concerns about her lack of professionalism. In addition, some of the employees who made the negative comments weren’t involved in the decision to terminate her. Despite the unflattering nature of the remarks about her unruly hair, disheveled clothing, and odd mannerisms, the judge believed that similar observations could be made about any employee― male or female―and such gender-neutral comments couldn’t support a sex discrimination claim based on gender stereotyping.
Disability claim survives on evidence of pretext
Deloitte also requested pretrial dismissal of Rice’s disability claim, arguing that it decided to terminate her employment in June 2010, before she had her heart attack and allegedly became disabled. The court didn’t buy that argument, finding there was sufficient evidence that she was terminated in 2011 after her heart attack occurred, which left her disability discrimination claim viable.
Deloitte also argued (albeit too late in the process) that Rice couldn’t show its legitimate business reasons for terminating her were a pretext for discrimination, or false. Here, too, the judge disagreed. After ruling that Deloitte had made this argument too late in the judicial process, the judge found there was evidence of pretext. The court pointed to the initial favorable performance review in which Rice was given an “on track to meet or exceed goals” rating. In addition, she presented evidence that Van Den Eynde sought out only negative feedback about her performance, ignoring the positive feedback.
Rice also offered evidence that Van Den Eynde told her in 2011 that he was concerned that the level of stress she was going to take on by coming back to work would exacerbate her heart condition. Deloitte’s termination of her shortly after that highlighted the inconsistencies and contradictions in its proffered legitimate reasons for the discharge decision. The court therefore denied the company’s request for dismissal of the disability discrimination claim.
Despite the court’s adverse ruling on the ADA claim, Deloitte succeeded in narrowing the issues that will go to trial by getting the Title VII sex discrimination claim dismissed. With fewer viable claims at issue, parties often pursue settlement rather than going to trial. Rice v. Deloitte Consulting LLC, No. 12-cv-253 (D.Colo., July 9, 2013).
More transgender discrimination claims likely
Although Title VII doesn’t explicitly prohibit discrimination on the basis of gender identity, the EEOC’s position has evolved to the point that it considers bias against transgender individuals sex discrimination in violation of Title VII. In April 2012, the agency found in Macy v. Holder that a transgender woman who had been denied a job with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) had a cognizable discrimination claim under Title VII based on gender identity, change of sex, or transgender status.
More recently, the EEOC supported the settlement of a harassment claim filed by a transgender worker who was physically and verbally harassed while working for a federal contractor in Maryland. By recognizing both discrimination and harassment claims based on transgender status, the EEOC has given the green light to more employment cases based on gender identity.
Takeaway: steps for employers
With recent U.S. Supreme Court decisions addressing same-sex marriage and the EEOC’s protection of transgender workers, the national spotlight is on gay, lesbian, and transgender issues. Employers nationwide need to review their employment policies and practices to ensure they don’t discriminate or retaliate against employees on the basis of gender identity. Even in jurisdictions where there’s no explicit protection for such workers, the best practice is to revise your equal employment opportunity (EEO) policy to specifically list gender identity as a protected category.
In addition, you should review your job applications and interview questions to make certain they don’t solicit information related to transgender status. Train supervisors, managers, and HR personnel to recognize, prohibit, and remedy discrimination and harassment based on gender identity. In short, proactively including gender identity in your antidiscrimination and antiharassment policies and practices will help prevent costly employment lawsuits down the road.
Steve Collis is an associate with Holland & Hart in the firm’s Denver, Colorado, office. He may be contacted at stcollis@hollandhart.com