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A ground-breaking decision by the 6th U.S. Circuit Court of Appeals last year opened doors for transsexuals to bring discrimination lawsuits against their employers, but some lower federal courts are still holding to older precedents that bar Title VII claims. “District court judges are having a hard time with this,” said Christopher Daley, a lawyer and director of the Transgender Law Center in San Francisco. “They are having a hard time feeling that they can really embrace the 6th Circuit ruling.” Traditionally, federal courts have denied that transsexuals are a protected class under Title VII of the 1964 Civil Rights Act, based on a strict reading of how Congress intended the term “sex” to be applied. They hold to a line of cases that stem from a 1984 7th Circuit ruling, Ulane v. Eastern Airlines Inc., 742 F.2d 1081, which reinforced a narrow reading of Title VII. The 6th Circuit, however, broke new ground in 2004 when it relied on a 1989 U.S. Supreme Court decision in Price Waterhouse v. Hopkins, 490 U.S. 228, to find that transsexuals can be victims of sexual stereotyping. Price Waterhouse dealt with a woman passed over for promotion because she did not act as feminine as her employer required. In Smith v. City of Salem, No. 03-3399, the 6th Circuit said the same reasoning can apply to a transsexual firefighter who does not appear masculine enough. Yet as recently as last month, a federal judge rejected the 6th Circuit decision in favor of older precedent. Senior Judge David Sam of U.S. district court in Utah, which is within the 10th Circuit, rejected the employment discrimination claims of a transsexual bus driver. “The Sixth Circuit, in two recent cases, has applied the Price Waterhouse rationale to transsexuals, and has concluded that Ulane and its progeny are no longer good law . . . .This court disagrees,” Sam wrote. Etsitty v. Utah Transit Authority, No. 2:04CV616 DS (D. Utah). Major implications Attorney Randi Barnabee of Smith Barnabee & Co. in Northfield, Ohio, who argued Smith, said she knew when she first read Price Waterhouse in law school that the case would have implications for transsexuals. “I thought ‘this is the case that is going to change everything,’ ” said Barnabee. Discrimination against homosexuals or transsexuals is always triggered by the perception that they do not conform to either sex, she claimed. But there is still resistance from some federal courts that perceive lawsuits relying on Smith to be artful pleadings that are trying to circumvent Ulane, Barnabee said. With an appeal in the Etsitty case headed for the 10th Circuit, lawyers expect to see more clarity in the law. “Either the circuits are going to get in line behind Smith or they are going to split,” Daley said. If the circuits split, it may well be an issue headed for the U.S. Supreme Court, he added. Many of the cases involving Title VII claims by transsexuals, like Etsitty, involve restroom issues, where an employer fires a transsexual employee over concerns about which restroom will be used. Lauren Scholnick of Strindberg Scholnick & Chamness, who is representing Utah plaintiff Krystal Etsitty, said that the restroom issue is only a pretext for the employers’ discomfort with their employees gender nonconformity. “It’s very clear after Price Waterhouse that employers have a duty to protect their employees [from discrimination based on sex-stereotyping],” Scholnick said. Defense lawyers have argued, with some success, that Smith creates another protected class for transsexuals and homosexuals, in opposition to Ulane. Scott Hagen of Ray Quinney & Nebeker in Salt Lake City, who defended the Utah Transit Authority in Etsitty, declined to discuss the case while an appeal is still pending. But in Etsitty, Sam sided with the defense argument that the Price Waterhouse scenario of a woman appearing too masculine is not analogous to the case of a man changing to the opposite sex.

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