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EEOC Decides That Title VII Prohibits Transgender Status Discrimination

On April 20, 2012, the U.S. Equal Employment Opportunity Commission (EEOC) decided in Macy v. Holder, to overturn the Department of Justice’s refusal to give full consideration to the EEO claim of a transgender federal employee, that discrimination based on gender identity, change of sex, and/or transgender status is discrimination on the basis of sex, prohibited by Title VII of the Civil Rights Act of 1964 (Title VII).

Prior to transitioning from a male to a female, Macy worked as a police detective in Phoenix, AZ. Macy decided to relocate to San Francisco, and applied for an opening in the Bureau of Alcohol, Tobacco, Firearms and Explosives Agency’s crime laboratory and interviewed by phone with the Director of the lab. After discussing background, credentials, and the proposed salary and benefits, the Director conditionally hired Macy, pending a background check. In a subsequent phone call, Macy alleges that the Director advised that he was hired pending completion of the background check. Macy was then contacted by a staffing firm to begin the necessary paperwork for the position, and an investigator was assigned to conduct the background check.

Macy emailed the staffing firm to inform them that she was transitioning from male to female and asked that this information be passed on to the Lab Director. A few days later, the staffing firm told Macy that the Agency had been made aware of upcoming gender transition. Five days later, the Director of the lab sent Macy an email stating that the position was no longer available due to budget cuts.

Macy then contacted an EEO counselor at the Agency to discuss her concerns that the job offer had been withdrawn based on her gender identity. The counselor told her that the job had not been closed for budgetary reasons, but rather was filled by another employee. The counselor stated that the other applicant was hired because that person was farthest along in the background check process. Suspecting this reason was pretextual, Macy filed a formal EEO Complaint, citing discrimination based on sex, specifically citing “gender identity” and “sex stereotyping” as the basis for her complaint.

The Department of Justice informed Macy that it intended to pursue her claim for discrimination on the basis of sex under Title VII, but that it considered her claim for gender identity discrimination to be a separate claim, which would not be afforded the right to request a hearing before an EEOC judge or the right to appeal the final Agency decision to the EEOC because it was not covered by the federal statute.

Macy appealed to the EEOC, claiming that the EEOC had jurisdiction over her entire claim under Title VII. She argued that the separate procedure for adjudicating her gender identity claim was a “de facto dismissal” of that claim. The Agency responded that Macy’s appeal was premature because her claim for discrimination on the basis of sex was being adjudicated under Title VII. Macy then withdrew her claim for discrimination based solely on sex, as the Agency had identified it, and informed the EEOC that she intended to pursue only her claim for discrimination on the basis of gender identity, change of sex, and/or transgendered status.

The EEOC accepted Macy’s appeal and ruled that the EEOC had jurisdiction over her entire claim. The Commission rejected the Agency’s argument that her claim of discrimination was actually two separate claims–one for discrimination “because of sex” under Title VII, and one for discrimination based separately on “gender identity stereotyping.”  Instead, the Commission established 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.”

Explaining that Title VII prohibits any discrimination based on sex, the Commission clarified that the definition of sex includes both biological differences and gender, which includes “cultural and social aspects associated with masculinity and femininity.” Relying on the Supreme Court’s plurality in Price Waterhouse v. Hopkins, the Commission explained that “gender discrimination occurs any time an employer treats an employee differently for failing to conform to any gender-based expectations or norms.”

The Commission recognized that several lower courts have used the sex-stereotyping theory when analyzing transgender discrimination under Title VII, but concluded that sex stereotyping is only “one means of demonstrating disparate treatment based on sex” in the context of transgender discrimination. The Commission instead held that discrimination based on transgender status, in and of itself, is discrimination “based on . . . sex” in violation of Title VII. The Commission explained that “[t]his is true regardless of whether an employer discriminates against an employee because the individual has expressed his or her gender in a non-stereotypical fashion, because the employer is uncomfortable with the fact that the person has transitioned or is in the process of transitioning from one gender to another, or because the employer simply does not like that the person is identifying as a transgender person.”

In short, the Commission concluded that “intentional discrimination against a transgender individual because that person is transgender, is, by definition, discrimination ‘based on … sex,’ and such discrimination therefore violates Title VII.”

The Commission’s ruling is a landmark decision. Federal employers are bound by the Commission and will now be found to have violated Title VII’s prohibition on sex discrimination if they discriminate against transgender individuals. Although the Commission’s ruling is only binding on federal employers, it represents a significant development in Title VII as it applies to employers and transgender individuals in the private sector. First, the EEOC will likely use the ruling when deciding charges of discrimination against private employers. Additionally, lower courts may adopt, or at least consider, the Commission’s reasoning. The Commission’s ruling, therefore, may result in an overall expansion of Title VII protection. Employers should be prepared for claims of discrimination relating to transgender status.

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