EEOC Rules that Transgender Discrimination Claims are Covered by Title VII of the Civil Rights Act of 1964

In a sharp reversal of its prior rulings, the Equal Employment Opportunity Commission, the federal agency created by the Civil Rights Act of 1964 with principal authority for interpreting and applying Title VII, the federal statute that bans, among other things, sex discrimination in employment, ruled on April 20, that a "complaint of discrimination based on gender identity, change of sex, and/or transgender status is cognizable under Title VII."  Overturning its own prior rulings from 1984, 1994 and 1996, which had taken a narrow view of the concept of "discrimination because of sex" under the statute, the Commission unanimously concluded in Macy v. Holder, Appeal No. 0120120821, Agency No. ATF-2011-00751, that subsequent developments – especially significant federal circuit and district court decisions - have led to a new understanding of the law.

The ruling came on a complaint by Mia Macy, who is represented in the case by the Transgender Law Center.  According to her complaint, Ms. Macy applied for a position for which she was qualified at the Walnut Creek crime laboratory of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives, an agency within the U.S. Department of Justice.  At the time, she was still presenting as a man.  She discussed her interest in the position with the Director of the laboratory, and was told she would be hired pending a background investigation.

Her application was to be processed as a civilian contractor through Aspen of D.C., a government contractor responsible for filling the position.  She submitted the relevant paperwork from Aspen on March 28, 2011, which she promptly submitted, and the necessary background investigation was begun. 

However, on March 29, Ms. Macy sent an email to Aspen informing them that she was in the process of transitioning from male to female and asked them to inform the laboratory director of this change.  On April 3, she was notified by Aspen that they had told the employer about her change in name and gender.  Five days later, she received another email from Aspen, stating that due to federal budget reductions, the position was no longer available.  When she followed up with an agency EEO counselor, she was told that actually the position had been filled with a different applicant who was the "farthest along in the background investigation."  Considering this to be a pretext for discrimination, she filed a complaint with the agency's EEO office.

On the formal complaint form, Macy checked off "sex" and "female" and typed in "gender identity" and "sex stereotyping" as the basis for her complaint, and wrote that she was discriminated against on the basis of "my sex, gender identity (transgender woman) and on the basis of sex stereotyping."  In the letter responding to her complaint, the agency said that because "gender identity stereotyping cannot be adjudicated" before the EEOC under Title VII, her claim would be processed "according to Department of Justice Policy."  (All federal civilian employment at present takes place under an Obama administration policy of non-discrimination based on gender identity, pursuant to a policy statement by the president – not an executive order or a formal regulation.) 

Dissatisfied with this response, Macy's attorney contracted the agency insisting that her entire complaint should be processed under Title VII.  The agency's response was that it would process her complaint "based on sex (female)" as a Title VII complaint, and her complaint based on "gender identity stereotyping" under the agency's "policy and practice."  Macy's attorney submitted a notice of appeal, taking the question before the Commission, a five-member body that serves in an appellate capacity regarding decisions by executive branch EEO offices, asserting that EEOC has jurisdiction over her entire claim, and that the agency's "reclassification" of her claim was, in effect, a dismissal of her gender identity claim under Title VII.

The Commission, made up of both Democratic and Republican appointees, unanimously agreed that Macy's entire claim is subject to Title VII's ban on sex discrimination.  Although the Commission had issued several decisions in the past rejecting the argument that gender identity discrimination was a form of sex discrimination in violation of Title VII, federal courts have come to disagree with that view. 

Most recently, the 11th Circuit Court of Appeals, based in Atlanta, ruled late last year in Glenn v. Bumbry, 663 F.3d 1312 (2011), that discrimination by a government agency against an employee who was transitioning male-to-female was sex discrimination in violation of the Equal Protection Clause of the 14th Amendment, citing with approval prior rulings by the 6th Circuit upholding a sex discrimnation claim under Title VII by a transgender fire fighter in Ohio and by the 9th Circuit recognizing a cause of action under the federal Violence Against Women Act by a plaintiff who was victimized due to gender identity. 

These federal courts were relying, in turn, on the Supreme Court's 1989 decision in Price Waterhouse v. Hopkins, 490 U.S. 228, in which that Court, ruling in a partnership decision case brought by a woman whose rejection suggested gender stereotyping by the employer, said, "Congress' intent to forbid employers to take gender into account in making employment decisions appear on the face of the statute."  The Price Waterhouse court accepted the plaintiff's argument that evidence of sex stereotyped thinking by an employer would support a claim of intent to discriminate on the basis of sex.

Wrote the EEOC, "When an employer discriminates against someone because the person is transgender, the employer has engaged in disparate treatment 'related to the sex of the victim.'  This is true regardless of whether an employer discriminates against an employee becuase 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 each of these circumstances, the employer is making a gender-based evaluation, thus violating the Supreme Court's admonition that 'an employer may not take gender into account in making an employment decision." 

There are only two exceptions under federal discrimination law where an employer can take gender into account: when it is a "bona fide occupational qualification," a narrow exception that usually relies on safety issues, or in an affirmative action program used to remedy past discrimination.

"To be sure," the EEOC conceded, "the members of Congress that enacted Title VII in 1964 and amended it in 1972 were likely not considering the problems of discrimination that were faced by transgender individuals.  But as the Supreme Court recognized in Oncale v. Sundowner Offshore Services, Inc.: 'Statutory prohibitions often go beyond the principal evil [they were passed to combat] to cover reasonably comparable evils, and it is ultimately the provisions of our laws rather than the principal concerns of our legislators byw hich we are governed.  Title VII prohibits "discriminat[ion]. . . because of . . . sex" in . . . employment. [This] . . . must extend to [sex-based discrimination] of any kind that meets the statutory requirements."'

The EEOC noted that transgender complainants might articulate a variety of theories in support of their discrimination claims.  Gender stereotyping might be the basis of a complaint, but also a transgender applicant might have something more akin to a traditional sex discrimination claim by showing that the employer sought to fill a position with a man and the applicant, whose applications was proceeding favorable so long as the employer considered her to be a man, was suddenly denied when the employer was informed that the applicant was a woman.  This would be a clearcut case of sex discrimination.  The EEOC compared this to an employer who would reject an applicant because the applicant had converted from Islam to Christianity, and would then face a charge of discrimination on the basis of religion. 

At this stage, Macy's complaint is still just that, a complaint, and given the procedural position of the case, the EEOC was not rendering a final decision on the merits of her claim.  Instead, it sent the case back to the agency for further processing as a Title VII sex discrimination claim, as such claims are now broadly construed under the EEOC's ruling in this case to include claims of gender identity discrimination.  In a footnote, EEOC mentioned that it had previously taken the same position on this issue in an amicus (friend-of-the-court) brief that it had filed in a case pending in the U.S. District Court for the Western District of Texas, Pacheco v. Freedom Buick GMC Truck, supporting the plaintiff's claim in that case that under recent federal court decisions, a gender identity claim could be brought under Title VII.

The EEOC's ruling marks a major advance for transgender rights, not least because federal courts are supposed to generally defer to the EEOC's interpretations of Title VII.  Given the recent trends in the federal courts on the issue of gender identity discrimination as sex discrimination, it seems likely that the EEOC's decision will be well-received in subsequent court rulings.  So far, the defendant in one 6th Circuit Title VII gender identity discrimination case petitioned the Supreme Court for review, and that petition was denied.  This is not a merits ruling on the issue by the Supreme Court, but as that petition for review was filed at a time when similar rulings had been made by the 9th and 1st Circuits in cases involving other federal sex discrimination bans, it is possible to argue that the Supreme Court is not inclined to intervene as this doctrine is being developed in the lower courts.

As a result of the Macy decision, individuals with gender identity employment complaints now have a strong basis to seek assistance from the 53 regional EEOC offices as well as the EEO offices of federal agencies that are now bound by this administrative ruling.  As such, the ruling takes the Obama Administration's policy statement on gender identity discrimination a step further, and raises interesting questions about the pending Employment Non-Discrimination Act bill in Congress. 

The ruling also raises interesting strategy decisions about pending federal legislation to ban discrimination based on sexual orientation and gender identity or expression, the Employment Non-Discrimination Act (ENDA).  A version of ENDA that covered only sexual orientation discrimination passed the then-Democratic-controlled House of Representatives in 2007, after its lead sponsor, Rep. Barney Frank, removed gender identity from the bill on the ground that there was inadequate support in the House for a more comprehensive bill.  After the Democrats recaptured the White House and achieved majorities in both houses of Congress in 2008, a comprehensive ENDA was introduced, but did not advance in either chamber before the Republicans re-captured the House in the 2010 election.  Unless the Democrats take back control of the House and retain control in the Senate this November, the bill will not move in the next Congress.  The EEOC's action means that protection against gender identity discrimination is no longer held hostage by these political circumstances, but also raises the natural question whether ENDA needs to mention gender identity, when a bill limited to sexual orientation might be easier to pass.

PS – After I posted this, I received an email from a reader who stated disappointment with my "conclusion."  The implication of his communication was that I was concluding that gender identity should be dropped from ENDA.  This is not my conclusion.  I ended with a strategic question: "Does ENDA need to mention gender identity, when a bill limited to sexual orientation might be easier to pass?"  To some, the answer to that question is self-evident – but is the self-evident answer "yes" or "no"?  I think that is subject to debate.  To close off all debate on a question of strategic importance would be short-sighted, especially when we are in a moment when the legislation can't move anyway because of the current political balance in Congress.  So much of this depends on how the fall elections go.  If Romney ends up in the White House, nothing happens with ENDA for the following four years.  Even if the president is re-elected, whether anything happens with ENDA depends on how the congressional elections turn out.  The Democrats would have to pick up 25 seats or more to have working control of the House – is that possible in a year where commentators are suggesting the presidential election will be a "tight" contest?  And the balance of retirements, incumbents, etc., in the Senate suggest that it will be an uphill battle for the Democrats to retain control of that chamber, much less widen their margin.  So ENDA may not be going anywhere for quite a while, which makes this a good time to have the debate.  It is also worth noting that the longer we go without enactment of ENDA, the more precedents may build up solidifying Title VII coverage of gender identity…  So there are plenty of variables to consider.  I still haven't made up my mind how to answer the strategic question, and I would welcome debate.