Quite a bit has changed since we last visited this topic generally in 2014. Approximately eighteen states and over 200 municipalities ban gender identity discrimination. Indeed, for several years, California’s Fair Employment and Housing Act has prohibited discrimination on the basis of “sex, gender, gender identity, [and] gender expression.” As to federal law, this year, the Obama Administration issued guidelines explaining that federal law also bans gender identity discrimination. In response to the recent federal guidelines, several states and school districts filed a lawsuit in May against the United States and its departments of education, justice, and labor, the equal employment opportunity commission, and individual defendants. According to the plaintiffs, the “[d]efendants have conspired to turn workplaces and educational settings across the country into laboratories for a massive social experiment” and “radical changes” have been “foisted” on the nation.

Presently, some federal courts interpret the federal anti-discrimination laws as protective of transgender employees, and some do not. The inconsistent treatment of transgender employees in federal courts can lead to confusion regarding the scope of transgender employee rights. While California state law specifically protects transgender employees, federal law, by contrast, is a morass of various interpretations and decisions. This stems from the fact that Title VII itself does not specifically state gender identity or expression or transgender individuals are protected from discrimination.

An example of an inconsistent interpretation of “sex” under Title VII is illustrated in two cases from the same federal appellate jurisdiction in the Northeast. On March 18, 2016, the United States District Court for the District of Connecticut decided Fabian v. Hospital of Central Connecticut. In that case, the plaintiff, a prospective employee of a hospital, claimed she was not hired after she disclosed her identity as a transgender woman. The hospital argued that Title VII does not protect transgender individuals from discrimination. The court disagreed with the hospital and stated that “employment discrimination on the basis of transgender identity is employment discrimination ‘because of sex’ and constitutes a violation of Title VII of the Civil Rights Act.”

Just days before the Fabian decision, however, the United States District Court for the Southern District of New York in Christiansen v. Omnicom Group, Inc., reached the opposite result, finding that although the conduct alleged in the case was “reprehensible,” discrimination based on sexual orientation does not violate Title VII. The Court evaluated whether the plaintiff’s claim was for sexual stereotyping or sexual orientation, the latter of which it considered not specifically protected under Title VII. The Court stated it was constrained by applicable precedent in applying this distinction, and went on to criticize why the distinction should make any difference. The Court observed “the futility of treating sexual orientation discrimination as separate from sex-based considerations.” Indeed, the distinction can lead to anomalous results: a female employee fired for not deferring to men could state a claim for sex discrimination under Title VII, whereas, a female employee who is fired for dating women could not. Although the court was critical of the distinction, it nonetheless abided by it and found that the plaintiff in the case before it did not state a Title VII claim.

Since North Carolina enacted legislation requiring persons to use the restroom that corresponds to their sex at birth, the matter of transgender rights has become increasingly politicized and a frequent topic in the media. With the conflicting interpretations of the law and with employers experiencing uncertainty in how to handle transgender issues, such as use of restrooms, some direction from the federal government is clearly needed. Luckily, there has been some. The U.S. Department of Labor’s Occupational Safety and Health Administration offers guidance to employers in its “A Guide to Restroom Access for Transgender Workers,” which is available here. As always, when in doubt, or when creating new policies, it is prudent to consult with legal counsel.