Executive Summary: U.S. Attorney General Eric Holder has announced that the Department of Justice (DOJ) now takes the position that Title VII's prohibition against sex discrimination includes discrimination based on gender identity, including transgender status. In a press release issued December 18, 2014, the Attorney General stated that he has informed all DOJ component heads and U.S. attorneys in a memo that the department will no longer assert that Title VII's prohibition against discrimination based on sex excludes discrimination based on gender identity per se, including transgender discrimination. 

The December 15 memo notes that several courts have interpreted Title VII's prohibition of discrimination because of "sex" as barring discrimination based on a perceived failure to conform to socially constructed characteristics of males and females. However, courts have reached varying conclusions regarding whether discrimination based on gender identity in and of itself constitutes discrimination because of sex. The memo also notes that the federal government's approach to this issue has evolved since the DOJ took the position in 2006 that Title VII's prohibition on sex discrimination does not include discrimination based on gender identity or transgender status. Since that time, the Office of Personnel Management (OPM) has stated that the federal government's policy against sex discrimination includes discrimination based on gender identity, and the EEOC has ruled that discrimination on the basis of gender identity violates Title VII. Additionally, earlier this year, the President signed an Executive Order prohibiting federal contractors from discriminating against employees based on gender identity and sexual orientation, which was followed by a Final Rule from the OFCCP implementing the Executive Order.  

The Attorney General's memo states that "the straightforward reading of Title VII is that discrimination ‘because of ... sex' includes discrimination because an employee's gender identification is as a member of a particular sex, or because the employee is transitioning, or has transitioned, to another sex." Accordingly, the DOJ will no longer assert that Title VII's prohibition on sex discrimination does not encompass gender identity per se (including transgender status).

 Employers' Bottom Line:

The DOJ only has authority to file discrimination lawsuits against government employers, not private employers.  However, the DOJ's shift of position further solidifies the federal government's position on this issue, which may influence courts in deciding gender identity or transgender discrimination claims filed against private employers under Title VII.  While the outcome of such lawsuits is far from clear, employers may be able to avoid expensive and often protracted litigation by promulgating and enforcing anti-discrimination policies that include gender identity and transgender status.