Nemeth Bonnette Brouwer Employment Blog

On September 15, 2017, President Trump indicated the Secretary of Defense would decide whether transgender people currently in the military could re-enlist. According to the Pentagon, Mattis stated in a memo that current policy allowing transgender individuals to re-enlist would be followed. 

What does this mean for transgender individuals in the private sector?  Private employers must comply with federal (Title VII) and state law (in Michigan, the Elliott Larsen Civil Rights Act).     

      Title VII of the Civil Rights Act states:

“[i]t shall be an unlawful employment practice for an employer – (1) to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual's race, color, religion, sex, or national origin.”

Much of the debate over whether transgender (and other LGBTQ) employees are afforded rights under Title VII focuses on how the word “sex” should be interpreted. Should it be interpreted as including sexual orientation (such as lesbian, homosexual, bisexual, transgender) or only including biological sex (female versus male)?

That question was at issue in a recent Second Circuit case, Zarda v. Altitude Express, a 2017 case where other administrative agencies in the United States government (the United States Justice Department and the Equal Employment Opportunity Commission) weighed in—giving conflicting advice to the Second Circuit as to whether the definition of sex under Title VII includes sexual orientation.

In Zarda, a skydiver instructor was fired after disclosing he was gay to a female client. He disclosed he was gay to avoid any awkwardness as they would be tightly strapped together for the jump. Her husband complained and Zarda was fired. Zarda sued in the Eastern District of New York under Title VII claiming sexual orientation discrimination. The district court rejected his claim, holding that Title VII did not protect him for being a gay man. On appeal, a judicial panel for the Second Circuit upheld the lower court’s decision. However, the entire Second Circuit decided to review the decision, granting an en banc review and inviting briefs from several parties and non-parties to weigh in.

The U.S. Department of Justice (DOJ), in an unusual move did just that, arguing that the word “sex” in Title VII was never intended to prohibit sexual orientation discrimination. This is contrary to the position taken by another governmental agency, the Equal Employment Opportunity Commission (EEOC), in the same case. Earlier in the case, the EEOC had filed pleadings (under then President Obama) taking the position that Title VII protections did prohibit discrimination on the basis of sexual orientation. To explain the incongruity, the DOJ indicated that the EEOC did not speak for the U.S. government on that issue. Additionally, the DOJ’s recent interpretation in Zarda was at odds with its own interpretation in 2014 under then President Obama, which had been aligned with the EEOC’s position it was now opposing. Importantly, however, the DOJ’s position in Zarda, recognizes a claim on the basis of sexual orientation where employers apply impermissible sex stereotypes to homosexual employees.      

Thus, even if the word “sex” in Title VII is read narrowly as only including biological sex, the DOJ acknowledges that sex stereotypes cannot be impermissibly applied to homosexual employees. This also applies to transgender employees as a federal Michigan court has held. In Equal Employment Opportunity Commission v. R.G. & G.R. Harris Funeral Homes, Inc. 100 F. Supp 3d 594 (E.D. Mich., 2015). Harris Funeral Home discharged Stephens, a funeral director after he informed the owner he was transitioning to a female. The Funeral Home’s dress code required that male funeral directors wear pantsuits while female skirt suits. When Stephens informed the funeral home he intended to comply with the dress code by wearing a skirt suit, he was discharged. As a result he filed a charge with the EEOC who filed a lawsuit on his behalf claiming Harris Funeral Home violated Title VII.

The Funeral Home filed a Motion to Dismiss (in April 2015) arguing that the protections of Title VII did not extend to transgender employees; i.e., “sex” did not include sexual orientation. The Eastern District of Michigan held that transgender status was not a protected classification under Title VII. However, the Court denied the funeral home’s motion to dismiss because Stephens had also alleged Harris Funeral Home had fired him “because Stephens did not conform to the [Funeral Home’s] sex- or gender-based preferences, expectations, or stereotypes.” That, the court reasoned could form the basis of a lawsuit.

In August 2016, Harris Funeral Home filed another motion to dismiss No. 14-13710 (E.D. Mich. Aug. 18, 2016). This time arguing that the sex stereotyping law which had developed under Title VII imposed a substantial burden on its ability to conduct business in accordance with its religious beliefs. In essence, the Funeral Home said it was exempt from a body of law which had developed under Title VII prohibiting sexual stereotypes as it pertained to Stephens. The reason for the exemption was based on the Funeral Home’s exercise of its sincerely held religious beliefs as a corporation under the Religious Freedom Restoration Act (“RFRA”). In granting the motion to dismiss, the Eastern District of Michigan agreed. The court reasoned that the Funeral Home’s owner was a devout Christian and argued that he would be “violating God’s commands if he were to permit an employee who was born a biological male to dress in a traditionally female skirt-suit at his funeral home because doing so would support the idea that sex is a changeable social construct rather than an immutable God-given gift.”

The EEOC filed an appeal to the Sixth Circuit Court of Appeals on Stephens’ behalf, in October 2016, before the change in administration.

In January 2017, the ACLU filed a motion to intervene on Stephens behalf to represent her as she no longer believed she could be adequately represented by the EEOC with the change in administration. The Sixth Circuit granted the motion.  

Now more than ever in the employment area, with the change in administration and change in positions, it is important to check with counsel. It is also important to remember that even if a person’s transgender status may not be a specifically protected classification under Title VII, she may have a claim under Title VII if she did not meet the employer’s sex- or gender-based preferences, expectations, or stereotypes.