The Equal Employment Opportunity Commission recently issued an opinion concluding that under Title VII, employees may bring discrimination claims based on their transgendered status or gender identity.

Mia Macy was a male police detective in Phoenix, Arizona.  In 2010, Macy decided to relocate to San Francisco and pursue a position with the Bureau of Alcohol, Tobacco, Firearms, and Explosives.  After the interview process, a local director for the Bureau informed Macy that she would be able to fill the position provided that she passed a background check.  While her background check was pending, Macy informed the third-party contractor responsible for filling the position that she was in the process of transitioning from male to female.  The contractor relayed this information to the Bureau.  Five days later, the Bureau notified Macy that the position had been cut due to budget restrictions.  An EEO counselor at the Bureau, however, told Macy that another applicant had been hired for the position because that individual was farther along in the background investigation process.  Macy filed a discrimination charge against the Bureau, alleging sex discrimination, and discrimination on the basis of gender identity (as a transgender woman) and sex stereotyping.  When only her sex discrimination claim was accepted, however, Macy appealed.  

The Commission reversed the decision, concluding that discrimination claims based on transgender status or gender identity are covered under Title VII.  The Commission based its conclusion principally upon the United States Supreme Court’s decision in Price Waterhouse v. Hopkins, 490 U.S. 228 (1989) and subsequent decisions by federal courts.  In Price Waterhouse, the Supreme Court held that discrimination on the basis of gender stereotype (e.g., a woman denied partnership in a company because she was too “macho” and not “feminine” enough) is sex-based discrimination prohibited under Title VII.  Several United States Circuit Courts of Appeals have subsequently held that under this holding, Title VII bars “not just discrimination because of biological sex, but also gender stereotyping—failing to act and appear according to expectations defined by gender.”  Following this approach, the Commission reasoned that when an employer discriminates against someone because the person is transgender, the disparate treatment is “related to the sex of the victim.”  According to the Commission, this includes a person allegedly discriminated against for expressing his or her gender in a non-stereotypical fashion, and a person allegedly discriminated against because an employer is uncomfortable with or dislikes the fact that he or she has or is transitioning from one gender to another.  

Going forward, employers should assume that the Commission’s opinion is legally correct.  While the Supreme Court has not specifically addressed whether transgender or gender identity discrimination claims are covered under Title VII, many lower courts have held that this is a protected class.  Therefore, given the current trend in federal courts to recognize the validity of such claims, the Commission’s opinion will certainly bolster an employee’s ability to bring gender identity and transgender discrimination claims under Title VII.