On September 25, 2014, the Equal Employment Opportunity Commission (EEOC) filed two lawsuits, the first actions by the agency in which it has alleged that discharging an employee because she is transgender constitutes discrimination on the basis of sex and therefore violates Title VII of the Civil Rights Act of 1964. In light of the increasing societal and judicial recognition of LGBT rights, employers must be aware of the potential workplace issues faced by employees who don’t conform to traditional gender norms. 
Background
People who don’t conform to traditional gender norms are becoming a more visible group in our society, including in the workplace. Although there is no universally accepted definition of “transgender,” the term often refers to a person whose gender self-identity is inconsistent with his or her biological gender. Based on that definition, although a transgender person may undergo medical procedures to align her physical gender and self-identity, such procedures are not required for a person to be transgender. Moreover, someone who is transgender may present—i.e., dress or act—in gender nonconforming ways to varying degrees. Therefore, like other protected statuses that aren’t readily apparent, it may not be as easy as you might think to identify someone as transgender without his disclosure.
The EEOC has long used Title VII to challenge the termination of or discrimination against employees on the basis of their sex. The most straightforward cases involve employment actions that favor men over women or women over men. But Title VII’s protections are broader than that, in part because “gender” includes not just biological sex but also the cultural and social aspects of masculinity and femininity.
In 1987, the U.S. Supreme Court recognized that Title VII’s prohibition against discrimination on the basis of sex includes adverse action against employees for failing to conform with stereotypical gender norms—that is, women not being “feminine enough” or men not being “masculine enough.” In 2012, the EEOC clarified that discrimination on the basis of transgender status or gender identity is also discrimination “based on sex” in violation of Title VII. The agency observed that gender discrimination occurs anytime an employer treats an employee differently for failing to conform to any gender-based expectations or norms.
Building on that decision, the EEOC recently filed a pair of lawsuits that mark the first time the agency has used Title VII to challenge the discharge of transgender employees as sex discrimination in federal court.
EEOC’s lawsuits
According to the complaint in the first lawsuit, filed in Florida, Lakeland Eye Clinic hired Brandi Branson in 2010 as its director of hearing services. At that time, Branson used a male name and appeared to conform to traditional male gender norms. He successfully provided hearing services to patients referred to him by Lakeland physicians. The referrals were his sole source of clients.
In early 2011, Branson began wearing feminine clothing and makeup to work, which prompted ridicule and withdrawal by coworkers. A few months later, Lakeland confronted Branson about her changing appearance. She informed the clinic that she was undergoing a gender transition from male to female, including a legal name change. The comments and ostracism by managers and employees continued. Ultimately, all but one of Lakeland’s physicians stopped referring patients to Branson for hearing services.
In June 2011, Lakeland fired Branson and told her it was eliminating her position and closing its hearing services division. However, the clinic continued operating its hearing services division and, in August 2011, replaced Branson with a male employee who conformed to traditional male gender norms.
According to the complaint in the second lawsuit, filed in Michigan, Amiee Stephens had worked for R.G. & G.R. Harris Funeral Homes as a funeral director/embalmer since October 2007. She performed her work adequately. In July 2013, she informed Harris and her coworkers in a letter that she was undergoing a gender transition from male to female and intended to dress in appropriate female attire. She asked for their support and understanding. Harris fired Stephens in August 2013, telling her that what she was proposing to do was unacceptable.
In both cases, the EEOC alleged that the employer’s decision to fire the employee was “because of sex” and “motivated by sex-based considerations.” Specifically, the agency claimed the employers terminated the employees because they are transgender, because of their transition from male to female, or because they didn’t conform to the employers’ sexor gender-based preferences, expectations, or stereotypes. Therefore, the EEOC alleged, the employers deprived the transgender employees of equal employment opportunities and otherwise adversely affected their status as employees because of their sex.
Bottom line
The EEOC’s decision to file these lawsuits demonstrates that it is willing to pursue employers in court for taking adverse action against transgender employees on the basis of their gender nonconformity. As with discrimination based on any legally protected status, employers that commit or fail to prevent discrimination against transgender employees expose themselves to liability under Title VII and other federal laws. Moreover, New Jersey is one of many states with laws that provide even broader protections than federal law and explicitly include gender identity or expression as a protected status.
Even if you aren’t faced with a lawsuit, ignoring the workplace challenges faced by transgender employees could expose you to a myriad of significant and tangible costs, including the loss of well-qualified employees who are unhappy with the work environment, the need to hire and train people to replace them, and a loss of business due to a damaged reputation.
Arielle B. Sepulveda is an attorney with Day Pitney LLP, practicing in the firm’s Parsippany, New Jersey office. She may be contacted at asepulveda@daypitney.com.