As you may be aware, North Carolina recently enacted a law that requires all state employees to use bathrooms that correspond with their biological sex as listed on their birth certificates (House Bill 2). House Bill 2 was passed in a single day to thwart a Charlotte, North Carolina ordinance that would have prohibited sexual orientation and gender identity discrimination and would have allowed transgender individuals to use facilities consistent with their gender identity.

In response to the North Carolina ordinance, the Equal Employment Opportunity Commission issued a fact sheet stating that federal employment discrimination law prohibits employers from restricting transgender workers' access to common workplace restrooms. Although Title VII does not expressly protect transgender worker, the EEOC stated in its fact sheet that sex discrimination under Title VII of the Civil Rights Act includes discrimination based on gender identity. The EEOC also specifically stated in its fact sheet that "Contrary state law is not a defense under Title VII" – no doubt referring to the recent activity in North Carolina. The agency has also taken this position in at least two highly publicized court cases in which it sued employers on behalf of transgender employees, and part of its strategic plan focuses on LGBT rights in the workplace. Referring to its administrative decisions in Macy v. Dep't of Justice (2012) and Lusardi v. Dept' of the Army (2015), in the EEOC's view, employers may not:

  • Deny an employee equal access to a common restroom corresponding to the employee's gender identity is sex discrimination;
  • Condition this right on the employee undergoing or providing proof of surgery or any other medical procedure; or
  • Avoid the requirement to provide equal access to a common restroom by restricting a transgender employee to a single-user restroom instead (though the employer can make a single-user restroom available to all employees who might choose to use it).

In reply to the DOJ's letter, North Carolina filed a lawsuit against the United States seeking to protect the state's right to enact H.B. 2. In turn, the DOJ sued North Carolina over House Bill 2 in countersuit asking for an injunction to block H.B. 2.

What does all of this mean? The "sex" category under Title VII has been expanded by the courts to include sex stereotyping, sexual orientation, and same sex harassment, and now a number of courts have found that Title VII protects transgender employees.

Employers need to stay tuned as this issue is not going away anytime soon.