Does federal law prohibit discrimination against transgender employees? Some federal courts have ruled that the answer is no. However, an EEOC decision issued in April 2012 has found that such a prohibition exists.  

The following allegations were made: The complainant, named Macy, was an employee of the ATF. Macy spoke to her director about an open position. At this time, Macy was presenting as a male. The director told Macy she would get the position provided her background check was clear. However, days after disclosing that she was transitioning from male to female and that she would have a new name and gender, she was informed that, due to budgetary constraints, the position was no longer available. In actuality, the position had been given to another person. Macy filed an administrative complaint claiming transgender discrimination.  

Macy’s claim eventually reached the EEOC. The issue was whether federal law — specifically Title VII — prohibits discrimination against transgender individuals. Many federal courts, as the EEOC recognized, had held that Title VII did not protect employees from discrimination based upon their status as transgender individuals. Rather, those courts generally required plaintiffs to show that they were discriminated against for failing to conform to gender stereotypes — for example, a woman being passed over for promotion for failing to act in a sufficiently “feminine” manner.  

The EEOC rejected this distinction. It concluded a transgender person could prevail by showing that the employer discriminated against him or her for failing to conform to gender stereotypes. However, unlike many courts that have considered the issue, the EEOC concluded that a person also may prevail simply by showing that he or she was discriminated against based upon his or her status as a transgender individual. Both forms of discrimination fall within the definition of discrimination based on sex.  

How should employers react to this decision? While courts are not required to follow the EEOC’s decision, it may signal an increasing acceptance of transgender discrimination claims. Furthermore, many states and municipalities already prohibit discrimination against transgender individuals. Therefore, the prudent approach is for employers to ensure that their policies prohibit discrimination against transgender individuals (as many employers already have) and train their employees accordingly.