The Equal Employment Opportunity Commission (EEOC) recently adopted the position that employment discrimination against transgender individuals is a form of sex discrimination under Title VII of the Civil Rights Act of 1964. The decision, though not binding on courts, will likely have a significant impact on employers in all sectors as courts typically defer to the EEOC’s interpretation of Title VII. In essence, the decision indicates that the EEOC considers “transgender” to now constitute a protected class under Title VII.

The decision, Macy v. Holder, involved a transgender woman who was born male and, at the time of application, still presented as a male. The applicant, Mia Macy, was a veteran police detective with military and law enforcement background who applied for a position as a ballistics technician at the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF). After discussing the position over the phone, Macy was informed that she would be hired pending a background check.

During the background check process, Macy informed ATF that she was in the process of transitioning from male to female. Five days later, Macy received an email stating that the position for which she had applied was no longer available due to budget reductions. In fact, another person was hired for the position.

Macy filed a complaint with the EEOC against ATF alleging discrimination on the basis of “gender identity” and “sex stereotyping.” At first, the EEOC required that Macy’s complaint be processed according to the U.S. Department of Justice’s policies, which offer fewer remedies and no right to a hearing. The EEOC then issued a “correction” stating that it would only accept Macy’s claim based on “gender identity stereotyping” under the agency’s “policy and practice,” rather than Title VII.

On Macy’s appeal to the EEOC, the commission agreed with Macy that the complaint was appropriately classified as a discrimination claim based on “gender identity” and “sex stereotyping.” The commission stated the following: “[T]he Commission hereby clarifies that claims of discrimination based on transgender status, also referred to as claims of discrimination based on gender identity, are cognizable under Title VII’s sex discrimination prohibition….”

This decision provides a clear message to employers in all sectors that Title VII’s protections extend to “cultural and social aspects associated with masculinity and femininity,” which includes an individual’s transgender status.

Macy will open the door to discrimination claims based on transgender status at all stages of employment—not just application. As a result, employers are cautioned to ensure their employment practices and policies related to both applicants and employees align with this new development.

Training also may be warranted to ensure that management and non-management staff alike understand what it means to be transgender and that discrimination or harassment based on such a status is now considered a protected characteristic by the EEOC.