Title VII of the Civil Rights Act of 1964 prohibits workplace discrimination by all private employers, state and local governments, and educational institutions with 15 or more employees. We are all familiar with Title VII’s prohibition against sex discrimination in the workplace. In recent years, the Equal Employment Opportunity Commission (EEOC), the federal agency responsible for enforcing Title VII, has found that claims of sex stereotyping by lesbian, gay, and bisexual individuals are covered under the Act’s prohibition against sex discrimination. The EEOC has also interpreted Title VII to prohibit discrimination based on an individual’s gender identity, including transgender status. On December 14, 2014, the U.S. Department of Justice (DOJ) announced a reversal of its previous position and has now joined the EEOC in extending the protection of Title VII to allow claims based on an individual’s gender identity. 
DOJ explains its position
Gender identity is an individual’s internal sense of being male or female, resulting from a combination of genetic and environmental influences. It may or may not correspond to the individual’s biological gender. Transgender individuals’ gender identity is different from the sex assigned to them at birth. The DOJ recently joined the EEOC in extending protection from workplace discrimination to transgender individuals.
In a memo addressed to DOJ department heads and U.S. attorneys, Attorney General Eric Holder stated that the department will no longer assert that Title VII’s prohibition against sex discrimination excludes discrimination based on gender identity per se. Holder characterized the reversal as an important shift to ensure that Title VII protections are extended to individuals suffering discrimination on the basis of their gender identity, including transgender status, and to foster consistent treatment of employees and job applicants throughout the government. The memo clarifies the Civil Rights Division’s ability to file Title VII claims against state and local public employers on behalf of transgender individuals in addition to its role in discrimination lawsuits involving federal government employees.
With its reversal, the DOJ joins other federal agencies in extending protection to individuals on the basis of gender identity and transgender status. By Executive Order issued by the president on July 21, 2014, federal contractors are prohibited from discriminating against employees based on gender identity and sexual orientation. In 2012, the EEOC decided to allow individuals to file workplace sex discrimination charges based on gender identity and transgender status.
EEOC’s initial case extending protection
Mia Macy, who was born male, was a police detective with specialized training and certification as a ballistics investigator. In December 2010, Macy applied for a crime lab position with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). The lab’s director allegedly offered her the position over the telephone contingent on a background check. While the background check was pending, Macy told the bureau that she was in the process of transitioning from male to female. Shortly thereafter, she was told that the position was no longer available because of budget cuts, only to learn later that another applicant had been hired.
Macy filed a charge with the ATF alleging its decision not to hire her was based on her gender identity and was therefore unlawful sex discrimination under Title VII. The bureau declined to process the claim on the basis that it didn’t fall within the Act’s prohibition on sex or gender discrimination. Macy appealed the ATF’s decision to the EEOC, which reversed the bureau and held that Title VII does encompass discrimination on the basis of gender identity.
In reaching its conclusion, the EEOC relied on the U.S. Supreme Court’s ruling in Price Waterhouse v. Hopkins that discrimination on the basis of gender nonconformity is discrimination based on sex and that “an employer may not take gender into account” in its employment decisions. The EEOC concluded that principle extends to cases involving discrimination on the basis of transgender status. The agency reasoned that when an employer discriminates against someone because she is transgender, it has engaged in disparate treatment related to the victim’s sex.
The EEOC found that to be the case regardless of whether the employer discriminates because the individual has expressed her gender in a nonstereotypical fashion, is uncomfortable with the fact that she has transitioned or is in the process of transitioning, or simply does not like that she is identifying as a transgender person. According to the agency, in each of those scenarios, the employer is making a gender-based evaluation, which violates the Supreme Court’s admonition that employers may not take gender into account when making employment decisions. The EEOC concluded that intentional discrimination against a transgender individual because she is transgender is by definition discrimination based on sex and is therefore unlawful under Title VII.
What do other discrimination laws say?
Despite recent recognition of gender identity as a protected status under Title VII, the Americans with Disabilities Act (ADA) expressly excludes from the definition of “disability” gender identity disorders not resulting from physical impairments, along with transvestism, transsexualism, pedophilia, exhibitionism, voyeurism, and other sexual behavior disorders. In many states, the state-law counterpart to Title VII, have not yet had their prohibitions on sex discrimination extended to discrimination based on gender identity or transgender status.
Although the DOJ’s reversal in position doesn’t directly affect private employers, it does signal the continuing trend toward protection against discrimination based on gender identity and transgender status. The move reaffirms that in processing charges, litigating cases, and negotiating with employers, the EEOC will take the position that Title VII protects individuals on the basis of their gender identity. Many courts are giving weight to the EEOC’s position and recognizing gender identity discrimination claims.
With continuing attention on this issue, you should take steps to protect your company from liability by ensuring that your equal employment opportunity policies and procedures include gender identity as a protected characteristic and that supervisors and managers understand how to respond to complaints of discrimination based on gender identity.
Leslie Sammon is an attorney with Axley Brynelson, LLP. She may be contacted at lsammon@axley.com.