Seyfarth Synopsis: In State of Texas v. United States, a District Court issued a nationwide injunction to enjoin the Department of Education and Department of Justice from enforcing their guidelines on accommodations for transgender students. The injunction does not prevent states from permitting accommodations.

In a setback for the Obama Administration, and supporters of transgender inclusion, a U.S. District Court for the Northern District of Texas issued a preliminary injunction as to enforcement of the federal government’s Title IX guidance on transgender bathroom policies in schools. Under the departmental guidance, schools to comply with Title IX’s prohibition on sex-discrimination were required to permit transgender students to use bathrooms consistent with their gender identity, regardless of their sex assigned at birth.

The Court found the departments prematurely issued the guidance, as before issuance they did not comply with the notice and comment period required by the APA for “final agency action.” The Court found these steps necessary as it determined the guidance necessitates added regulatory compliance such as reconstruction of existing restrooms. The Court further disagreed with the administration’s position that “sex” in Title IX extends to gender identity, finding that “sex” under Title IX is not “fungible” and does not encompass the claims of transgender persons. The Court declined to follow the Fourth Circuit’s affirmation of the departmental guidance in G.G. v. Gloucester County School Board, holding the Fourth Circuit wrongly found the definition of “sex” capable of encompassing transgender claims, and further noting the Supreme Court indicated its intent to overturn G.G. by issuing a stay.

The Court rejected the notion that non-inclusive bathroom policies gravely endanger transgender students. It instead found that in light of the Supreme Court stay in G.G., no irreparable harm would arise to students if federal guidance were enjoined.

The injunction is nationwide in scope, though it does not apply to states or cities that have already passed laws that require transgender-inclusive restrooms outside of the context of Title IX. In addition, no portion of the injunction holds that transgender-inclusive restrooms violate Title IX or are themselves illegal. In short, even if the district court decision is upheld, a school may still lawfully choose to implement an inclusive restroom policy; however, the federal government may not require a school to do so.

That said there is an active question as to whether the district court’s ruling will apply in the Fourth Circuit, given that the Court of Appeals ruled in in G.G. that Auer deference, and federal guidance on transgender inclusion, are appropriate. It is also of course uncertain whether the injunction itself will be upheld on appeal. If the Fifth Circuit affirms the injunction, there will be a circuit split with the Fourth Circuit thus making review by Supreme Court likely. The Supreme Court has not yet decided whether it will review the Fourth Circuit’s injunction in G.G., and if the Supreme Court does not do so, or does not overturn G.G, the Fourth Circuit will be required to follow federal guidance on Title IX.

The injunction in State of Texas predicts a period of significant uncertainty in the law regarding gender identity protection under Titles VII and IX , beginning with contradictory rulings in various district courts, potential circuit splits, and culminating with the need for legislative or Supreme Court action. Schools and employers should consult with counsel to evaluate their internal policies, practices and procedures with an eye towards potential discrimination claims.