President Obama made headlines in May when he embraced the concept of gay marriage. But another important step in the administration’s evolving protection of lesbian, gay, bisexual and transgender (LGBT) rights a few weeks earlier went largely unnoted. That step was the Equal Employment Opportunity Commission’s (EEOC) groundbreaking finding that discrimination based on gender identity is illegal under Title VII.

The April 20 ruling in the case of a job applicant rejected when she revealed she was undergoing a gender transition marks a sharp policy shift for the agency. In Macy v. Bureau of Alcohol, Tobacco, Firearms and Explosives, the agency expressly overturned prior decisions that found claims of discrimination based on gender identity or transgender status not actionable under Title VII. As a result, the EEOC will now accept complaints of workplace discrimination from transgender employees. Although Macy involves alleged discrimination by a government agency, it is expected to impact private employers as well.

“The writing is on the wall, not only for public but also for private employers, that this is a new enforcement area the EEOC will undertake,” says Denise Visconti, a shareholder at Littler Mendelson.

To Professor Art Leonard of the New York University Law School, the case means transgender people will be able to resolve their claims of discrimination through the EEOC’s administrative process as well as through the courts. “That the EEOC will receive complaints means a lot of people may get relief,” he says. For those cases that go to court, Leonard adds that while not binding, the EEOC’s interpretation of a statute usually is given significant weight by the federal courts.

“[Macy] is another step forward on the path to equal rights,” Leonard says.

Sweeping Protections

The EEOC ruling came in a case brought by Mia Macy, a former Phoenix police officer who presented as a man when she applied for a position with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), a Department of Justice (DOJ) agency. She was promised the job subject to a background check, but when Macy revealed she was in the process of transitioning from male to female, she was told the position was no longer available. She subsequently learned someone else had been hired.

On her complaint to the ATF’s EEO office, Macy wrote that she had been discriminated against on the basis of “my sex, gender identity (transgender woman) and on the basis of sex stereotyping.” In response, the ATF said that because “gender identity stereotyping cannot be adjudicated” by the EEOC, that part of her claim would be processed by the DOJ rather than the EEOC. Macy appealed to the EEOC.

The EEOC found that Title VII’s prohibition on sex discrimination proscribes gender discrimination, not just discrimination based on biological sex. “If Title VII proscribed only discrimination on the basis of biological sex, the only gender-based disparate treatment would be when an employer prefers a man over a woman, or vice versa,” the ruling said. “But the statute’s protections sweep far broader than that, in part because the term ‘gender’ encompasses not only a person’s biological sex but also the cultural and social aspects associated with masculinity and femininity.”

The EEOC added that gender stereotyping—discrimination based on an individual’s failure to conform with
gender-based expectations, established in the Supreme Court’s landmark 1989 decision in Price Waterhouse v. Hopkins—is just one form of gender discrimination.

Jackson Lewis Partner Michelle Phillips says the EEOC determined that Macy might be able to establish a viable sex discrimination claim based on various theories, including that she did not get the job because the agency believed that biological men should present as men and wear male clothing, or because the agency was willing to hire a man but not a woman.

Evolving Law

While the Macy ruling is significant, the EEOC was playing catch-up with some federal courts, states and local governments in a rapidly evolving area of employment law.

In its decision, the EEOC cited cases that relied on Price Waterhouse to find that transgender individuals had been discriminated against based on sex stereotyping, most recently the 11th Circuit decision in Glenn v. Brumby (see “Termination of transgender employee ruled illegal”).

In addition, 16 states, Washington, D.C. and approximately 150 counties and municipalities already have included gender identity or gender expression in their discrimination protection statutes. But efforts to provide protection in federal law repeatedly have failed (see “ENDA Update”), so workers in one city may be protected while those in an adjoining community are not.

“Although gender identity is not universally covered across the country, the EEOC is saying it will enforce those rights,” Phillips says.

As evidence that enforcement will cover private as well as public employers, Visconti notes a 2011 EEOC amicus brief in Pacheco v. Freedom Buick GMC Truck, supporting the plaintiff’s argument that a gender identity claim could be brought under Title VII.

Individualized Process

The change in EEOC position underscores the need for employers to review policies, conduct training and create gender transition plans, experts say.

“Even many good, experienced HR professionals need help in this area,” Phillips says. “It is a delicate issue that needs to be handled respectfully.”

Co-worker and manager training helps ensure they respect a transitioning employee’s lifestyle choices. “Often employees ask invasive personal questions or make inappropriate or antagonistic comments about the transgender individual’s personal life or medical procedures,” potentially setting up a hostile work environment claim, Phillips adds. 

Some problems can be short-circuited by working with the employee to develop a transition plan. Visconti points out gender transition time schedules vary, and some people have surgery while others don’t.

“By nature it’s a public process, yet at the same time it’s a private situation,” she says. “Some want to talk about it and others want it to be a very private thing. Like any other request for accommodation, it’s really an individualized process.”