The EEOC issued an internal memo entitled an “Update on Intake and Charge Processing of Title VII Claims of Sex Discrimination Related to LGBT Status” on February 3, 2015.  The memo, sent to the EEOC’s District Directors, seeks to “reiterate the importance of proper handling of LGBT-related discrimination claims and to update the internal coordination process for such cases.”  As most employers and plan-sponsors know, Title VII does not explicitly prohibit discrimination on the basis of sexual orientation, transgender status, or gender identity.  However, the EEOC has recently used Title VII’s prohibition on sex-based discrimination and harassment in the workplace to investigate claims of discrimination and harassment based on sexual orientation, gender identity, and transgendered status.  In highlighting recent enforcement efforts and developing case law (as well as the public’s rapid shift in attitude towards the LGBT community), the memo instructs District Directors on ways to handle and investigate discrimination charges based on sexual orientation, gender identity, or transgendered status that are levied against employers.  The memo also instructs District Directors to report all such charges to the EEOC headquarters for tracking purposes.  For more information about recent EEOC initiatives see Seyfarth’s Workplace Class Action Blog (For an interesting overview of EEOC litigation go here, as well as Seyfarth’s annual Workplace Class Action Litigation Report 2015 (which can be ordered here)).

Of note to plan sponsors and administrators, the memo states that the EEOC is interested in litigating charges regarding issues of “first impression” such as benefit coverage for same-sex couples and insurance benefits afforded to transgender individuals. While ERISA (and other current federal law) does not require benefit plans that provide benefits to opposite sex spouses to provide equivalent coverage to same-sex spouses, the EEOC clearly believes that such a right is found Title VII. The EEOC will likely argue that failure to provide such coverage constitutes sex discrimination because entitlement to coverage turns on the sex of the employee’s spouse. Similarly, the EEOC appears willing to take an aggressive stance on transgender related benefits coverage. This will likely involve arguing that refusal to consider transgender related medical procedures and treatments as medically necessary (and thus covered under a plan unless specifically excluded), constitutes sex discrimination. A claim of this sort could come up if a plan refuses to cover hormonal therapy (e.g., estrogen) to a transgender woman, or refusing to cover a prostate examination for a transgender man.

Strong arguments exist to counter the EEOC’s position.  Neither the text or the intent of Title VII covers claims of sexual orientation, gender identity, and transgendered status and employers cannot be required to provide benefits that run counter to their closely held religious beliefs. Lower courts, even those that accept the EEOC’s position that Title VII extends to the LGBT community, are sure to disagree on whether anti-discrimination policies can trump the defense of religious freedom. It is likely that only Congress passing the Employment Non-Discrimination Act (ENDA), or a ruling on this issue from the Supreme Court will settle the law in this area.

In the meantime, employer and plan administrators should be on the lookout for signs that the EEOC is investigating their plan or benefit policies.  An employer or plan administrator that is contacted by the EEOC regarding these matters would be well advised to seek the advice of counsel experience in dealing with the EEOC.