SUMMER 2018 TODAY’S GENER AL COUNSEL
Labor & Employment
Transgender Employees and Employment Discrimination By Alison Nadel and Natalie Colvin
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here is a fulsome debate regarding the meaning and scope of “sex” discrimination under Title VII. In its recent decision in Zarda v. Altitude Express, Inc. the Second Circuit decided that Title VII applies to sexual orientation and observed that we are amidst “something of a revolution in American law respecting gender and sex.” A short time later, the Sixth Circuit became the first federal appellate court to hold that discrimination because of an employee’s transgender or transitioning status constitutes discrimination based on sex, in violation of Title VII in Equal Employment Opportunity Commission v. R.G. & G.R. Harris Funeral Homes, Inc. But other circuits have historically expressed contrary views; the Seventh Circuit’s decision in 1984 in Ulane v. Eastern Airlines, Inc. is among those. This conflict is not limited to the courts. There is also conflict within the executive branch on how Title VII
should be enforced. The Equal Employment Opportunity Commission (EEOC) has held that intentional discrimination because of a transgender person’s gender identity is discrimination based on sex, and therefore prohibited under Title VII. Although the Department of Justice during the Obama administration concurred, Attorney General Jeff Sessions’ October 2017 memo reversed course, concluding that federal law does not prohibit employment discrimination based on gender identity per se. Uncertain times make it more difficult to advise corporate leadership. How difficult is it now? To answer that question, we summarize the evolution of the law in this area and offer some practical considerations for employers. UNDERSTANDING THE DEBATE
Title VII prevents employers from discriminating against employees based on “sex” — a term with no statutory
definition and no legislative history. Following that statute’s passage in 1965, courts held that Title VII does not protect against discrimination on the basis of gender identity, distinguishing discrimination based on “gender” from discrimination based on “sex.” However, the tide appears to be turning, as more courts are taking a broader view of what constitutes “sex” discrimination under Title VII. First, in 1989, the U.S. Supreme Court concluded in Price Waterhouse v. Hopkins that evidence of sex stereotyping (e.g., not acting “womanly” enough and needing to dress “more femininely”) was admissible to show that the plaintiff was denied partnership due to her biological sex, thus proving sex discrimination under Title VII. Notably, that decision departed from the statutory term “sex” in concluding that “gender must be irrelevant to employment decisions.” Second, nine years later, in Oncale v.