Although the terms “transgender” and “gender identity” have already been protected classifications in the California Fair Employment and Housing Act (FEHA) for a number of years, the State legislature saw a need to provide further clarification to alleviate continued discrimination against transgender employees, as well as employees who may not have had gender reassignment but nonetheless identify with the opposite of their biological gender.  Effective January 1, 2012, The Gender Nondiscrimination Act was enacted to define “gender identity” and add “gender expression” to the FEHA.

Now that two and one half years have passed since the FEHA was amended to include these terms, employers are still left with unanswered questions about their obligations to ensure individuals are not discriminated against in their employment.  FEHA provides the framework with little to no guidance on the practicalities of the workplace and how employers should handle issues that may arise concerning employees who are transgender or gender expressive.

This past March, a Sacramento County Superior Court judge declined to dismiss a lawsuit brought by the Department of Fair Employment and Housing against American Pacific Corporation (AMPAC) for “sex, gender, gender identity, and gender expression” discrimination.  The AMPAC case is a telling example of how an employer can easily make a costly mistake.

When a transgender applicant presented as a male and accepted an employment offer, the human resources department learned during the background investigation that he was biologically female.  There was no evidence that he had undergone any sex reassignment procedure.  AMPAC was concerned about the employee using the men’s locker room and restroom since he had not undergone an actual sex reassignment.  Seemingly not understanding the requirements of the FEHA, AMPAC asked the employee to delay the start of his employment until after sex reassignment surgery was done.  The employee protested, indicating he had been a firefighter who worked in similar situations and was not questioned about using the men’s facilities.  AMPAC, however, apparently refused to allow him to use the men’s restroom and locker room, and required him to use the women’s facilities.

If AMPAC had sufficient information and guidance regarding the rights of employees who are within the protected status of transgender, gender identity, or gender expression, litigation probably could have been avoided.

The express rights of the protected employees include the following:  An employee has the right to be referred to as the sex he or she identifies with, including in employment records.  Intentional refusal to address the employee with the appropriate pronoun or name may be discrimination and/or harassment.  An employee also has a right to use a restroom that corresponds to his or her gender identity or expression.  It is good practice to provide a unisex restroom, but it is not required and employees cannot be forced to use only the unisex restroom.  This is a typical concern, as it was AMPAC’s.  However, the court allayed the employer’s fears about restroom and locker room use by noting that “[i]ndividuals who claim a different gender from day to day, or who do so simply to be disruptive or to sexually harass other employees, do not meet the definition of transgender.”

Employees also must be permitted to dress in conformance with their gender identity.  While employers are still allowed to have and enforce reasonable dress code policies, employees cannot be forced to dress in a manner that does not comport with their gender expression or identity.  Further, employers should not make intrusive inquiries into the employee’s gender unless there is a legitimate business reason.

If an employee is being treated for gender identity disorder or has a serious medical condition related to his or her transgender status, then the employee may be entitled to leave under the Family and Medical Leave Act (FMLA) and/or the California Family Rights Act (CFRA).  On a related note, California has ordered health insurance companies that are regulated by the California Department of Insurance to stop denying health care coverage to transgender individuals based on their gender identity.  However, insurance companies are not required to provide treatment that it does not cover for non-transgender individuals.

Another concern for employers is what to communicate to employees who have a transgender co-worker.  Will the employees complain about the restroom or locker room?  How much can be disclosed to employees about a transgender co-worker?  What if an employee threatens to quit if required to use the same restroom as a transgender co-worker?  Training is the best tool employers have to educate employees about transgender and gender expression issues to avoid these types of occurrences.  Moreover, employers are obligated to train their employees that discrimination and harassment based on transgender, gender identity, or gender expression is unlawful and will not be tolerated.  As always, if an employer is uncertain how to handle a situation related to transgender, gender identity, or gender expression, legal counsel should be consulted.  While avoiding liability is always paramount, establishing an inclusive, nondiscriminatory work environment for all employees should be as well.