Like the recent proliferation of sexual harassment discussions in the workplace, issues concerning transgender employees are slowly but surely confronting employers and policies that may reinforce sex and gender stereotypes. How should employers react if (and let’s be honest, when) they learn that an employee is transitioning from one sex to another? What are the potential consequences of adverse employment actions based on transgender status? EEOC v. R.G. & G.R. Harris Funeral Homes, Inc. illustrates not only the expansion of the definition of sex discrimination under Title VII, but also the fragility of defenses to Title VII based on religious beliefs.

Background

Aimee Stephens was biologically male and presented herself as male during the six years that she was employed as a funeral director at R.G. and G.R. Harris Funeral Homes. Stephens informed the funeral home owner, Thomas Rost, that she would be having sex reassignment surgery and begin presenting herself and dressing as a woman at work. A few weeks later, Rost terminated her, asserting that he sincerely believed that a person’s sex was an immutable God-given gift and allowing Stephens to present herself as a woman would violate his religious beliefs.

Stephens filed an EEOC charge alleging that she was terminated because of her sex. The EEOC made a reasonable cause determination against the funeral home, was unable to conciliate the charge, and ultimately sued the funeral home for violating Title VII by terminating Stephens on the basis of her transgender or transitioning status and her refusal to conform to sex-based stereotypes.

Funeral Home Prevails in District Court

The funeral home argued that it did not violate Title VII by requiring Stephens to comply with a sex-specific dress code because the policy equally burdened male and female employees. Alternatively, the funeral home argued that it should not be forced to comply with Title VII because employing Stephens while she presented herself as a woman would constitute an unjustified substantial burden on Rost’s sincerely held religious beliefs in violation of the Religious Freedom Restoration Act (RFRA).

At the summary judgment stage, the district court ruled that Stephens could not pursue a Title VII claim based on her transgender or transitioning status. Nevertheless, the district court found direct evidence that the funeral home had discriminated against Stephens on the basis of her sex because Stephens failed to conform to the funeral home’s sex or gender-based stereotypes. Despite its direct evidence finding, the district court granted summary judgment to the funeral home, holding that the RFRA precluded the EEOC from enforcing Title VII against the funeral home, as doing so would substantially burden Rost and the funeral home’s religious exercise. The court found that the EEOC had failed to demonstrate that enforcing Title VII was the least restrictive means to achieve its presumably compelling interest in ensuring that Stephens was not discriminated against on the basis of her sex.

Sixth Circuit Reverses District Court and Grants Summary Judgment to EEOC

In a detailed opinion, the Sixth Circuit not only reversed the district court, but granted summary judgment to the EEOC. First, the Court agreed that the funeral home engaged in improper sex stereotyping when it terminated Stephens for wishing to present herself in a manner that contradicted the funeral home’s expectation of how a biological male should present himself. Highlighting Price Waterhouse v. Hopkins and its own decision in Smith v. City of Salem (also involving a transgender employee), the Sixth Circuit stated that the funeral home’s decision to fire Stephens “fell squarely within the ambit of sex-based discrimination” that these opinions forbid. The Court also noted that the funeral home failed to establish a non-discriminatory basis for Stephens’ termination and even admitted that she was not fired for performance-related issues.

Next, the Sixth Circuit ruled that discrimination on the basis of transgender and transitioning status violated Title VII. The Court explained that discrimination “because of sex” inherently included discrimination because of a change in sex. It added that:

“[A] transgender person is someone who ‘fails to act and/or identify with his or her gender’—i.e., someone who is inherently ‘gender-nonconforming.’”

Title VII required gender to be irrelevant to employment decisions, and gender was not irrelevant if an employee’s attempt to change his or her sex led to an adverse employment decision.

Regarding the funeral home’s RFRA defense, the Sixth Circuit explained that the funeral home had not met its burden. Under RFRA, the funeral home had to demonstrate that the government action at issue—i.e., the enforcement of Title VII—would substantially burden a sincere religious exercise. Although the Court conceded the sincere religious exercise, it held that the burdens that the funeral home identified were not substantial. In addressing the funeral home’s argument that allowing a funeral director to wear the uniform of the opposite sex would distract the loved ones of the deceased and hinder their healing process, the Sixth Circuit held that a religious claimant could not rely on customers’ presumed biases to establish a substantial burden under the RFRA. In addressing the funeral home’s second argument that forcing the funeral home to violate Rost’s faith would significantly pressure him to leave the funeral industry, the Sixth Circuit held that tolerating Stephens’ understanding of her sex and gender identity was not tantamount to supporting it, and bare compliance with Title VII did not amount to an endorsement of Stephens’ views regarding the mutability of sex. Because the funeral home did not establish that Rost’s religious exercise would be substantially burdened by requiring the funeral home to comply with Title VII, its RFRA defense failed. Still, “in the interest of completeness,” the Court clarified that even if Rost’s religious exercise was substantially burdened, enforcing Title VII was the least restrictive means of furthering the government’s compelling interest in eradicating workplace discrimination against Stephens.

Takeaways

The Sixth Circuit’s opinion undeniably illustrates the extent to which the federal government will go to enforce anti-discrimination laws as they relate to the LGTQI community. This case is one of the EEOC’s first lawsuits on behalf of a transgender individual and it would not be unrealistic to believe that more will follow. Consequently, employers should pay close attention to transgender rights in the workplace and the rulings of other circuit courts on related issues.

Employers should consider these guidelines:

  • Remain cognizant of your responsibility to prevent and address any form of sex discrimination, whether it involves sexual harassment, sex or gender stereotypes, gender identity, and/or disparate treatment on the basis of sex.
  • Properly train employees and supervisors on how to communicate, interact with, and/or discipline one another in ways that avoid hostile, offensive, or discriminatory conduct.
  • Ensure that any adverse employment action is supported by a legitimate, non-discriminatory reason, preferably one that is performance-related or involves the violation a known employment policy or procedure.

As demonstrated here, there is no guarantee that a person or institution’s religious beliefs will be a sufficient defense to evade liability under Title VII.