From Bruce Jenner’s announcement that he was transitioning to become a woman named “Caitlyn” to North Carolina’s passage of a so-called bathroom bill requiring schools and public agencies to restrict bathroom use to the facility corresponding to a person’s biological sex at birth, gender identity issues have become the subject of significant policy debate, lawsuits, and mainstream conversation. Gender identity is also increasingly becoming a more prevalent issue in our workplaces.
Is transgender discrimination in employment illegal?
Title VII of the Civil Rights Act of 1964 is a federal law that prohibits discrimination in employment based on sex (and other protected characteristics). There continues to be debate about whether prohibited “sex” discrimination includes discrimination based on a person’s gender identity. Some courts have rejected that interpretation, and so far, the U.S. Supreme Court hasn’t addressed the issue. On the other hand, the Equal Employment Opportunity Commission (EEOC) takes the position that discrimination based on gender identity is sex discrimination and is therefore unlawful in employment.
During fiscal year (FY) 2015, the EEOC received 271 complaints of gender identity discrimination. While that’s still a small fraction of the 26,396 total sex discrimination complaints the agency received nationwide in FY 2015, the EEOC notes that complaints of gender identity and sexual orientation discrimination rose 28 percent from the previous fiscal year.
Gender identity discrimination by federal contractors and subcontractors is clearly prohibited under an Executive Order issued by President Barack Obama in 2014. Executive Order 13672 went into effect last year. There are also some states that prohibit discrimination against employees because of their “gender identity or expression.”
What does this mean for employers?
The prohibition on discrimination based on gender identity means job applicants cannot be denied employment because they are transgender or do not conform to gender norms. It also means transgender employees cannot be fired, denied promotions or raises, or be subjected to other adverse employment actions because of their gender identity.
The EEOC has identified certain obligations for employers with transgender employees, including:
- Bathroom access. The EEOC has concluded that it is unlawful for an employer to deny an employee access to a common restroom that corresponds to the employee’s gender identity. An employer can make a single-occupant restroom available to all employees but cannot restrict the transgender employee to using only that restroom. That doesn’t mean that men can enter and use a women’s restroom using “gender identity” as an excuse. However, the EEOC maintains that if an employee has begun living and working full-time in accordance with his gender identity and has notified the employer, it cannot restrict him from using the restroom corresponding to his gender identity.
- Names and pronouns. Employers should instruct coworkers and supervisors to use the name and pronoun that corresponds to the gender identity with which a transgender employee identifies. It will take employees some getting used to when a person they’ve known for years as “Steve” changes her name to “Shelly” and must now be referred to as “she” or “her.” While some mistakes are unavoidable, persistently refusing to refer to an employee by her preferred name or pronoun can create a hostile environment.
- Harassment prevention. Investigate reports of harassment of transgender employees, including the use of derogatory terms, attempts to sabotage a transgender employee’s work, and any other actions based on the person’s gender identity. If the investigation reveals that inappropriate conduct has occurred, you should take appropriate corrective measures.
- Personnel records. The EEOC found an employer acted unlawfully by taking an unreasonably long time to revise its personnel records to reflect a transgender employee’s new name and gender. Accordingly, your HR department should pay attention to any requests to update records.
- Medical procedures. The EEOC maintains that employers must not require employees to have surgery or other medical procedures before according them the right to be treated consistent with their gender identity. “Gender reassignment surgery is in no way a fundamental element of a transition,” the EEOC wrote in one decision. In that case, the agency concluded that the employer had acted unlawfully by conditioning access to the women’s restroom on the employee undergoing a “final surgery” in her transition from male to female.
Bottom line
It is not a new phenomenon for people to identify with a gender that’s different from their anatomical sex at birth, but transgender individuals are becoming more comfortable expressing their gender identity in 
the community and at work as society and the law have become more accepting and protective of them. You should expect that trend to continue and be prepared for the day that one of your employees provides notice of her transition.
Amanda Jones is an attorney with Cades Schutte LLP, practicing in the firm’s Honolulu, Hawaii, office. She may be contacted at ajones@cades.com.