The decision in a recent federal court case against the United States Library of Congress shows clearly the risk an employer takes when making employment decisions based on a person’s gender identity. In Schroer v. Billington, D.D.C., Case No. 05-1090, September 19, 2008, the Library of Congress was found guilty of sex discrimination under Title VII when it withdrew a job offer just after the Library became aware that the person being hired – Diane Schroer – was undergoing medical treatments to change her sex from male to female. Ms. Schroer is a decorated military veteran and had been hired for a terrorism research analyst position at the Library. Shortly after being hired, she disclosed the fact that she was undergoing sex change treatments, and the Library of Congress told her the next day that she would not be a “good fit” for the job.

In recent years, a growing number of state and local laws have been adopted prohibiting discrimination based on transsexuality, transgender status, and other gender identity traits. But, federal employment discrimination law does not identify gender identity or similar traits as a protected class. Despite the absence of specific protection under the statute, some federal courts have found discrimination based on gender identity illegal under Title VII on a theory of sexual stereotyping. The theory is that taking action against a man, for instance, going through or contemplating a sex change punishes that man for not adhering to stereotypical male attributes and amounts to sex discrimination. The Court of Appeals for the Sixth Circuit reached that conclusion concerning transgender status in Smith v. Salem, 378 F.3d 566 (6th Cir. 2004).

The judge in the Schroer case went even further, though. That judge concluded not only that the Library of Congress was guilty of sexual stereotyping in violation of Title VII but also that the Library’s decision was sex discrimination on its face. Specifically, the judge concluded that the Library was willing to hire Ms. Schroer when it understood her to be a man but later withdrew the offer after it learned that she would be, at some point in the future, a woman. The judge concluded that such decisionmaking was pure and simple sex discrimination. He likened it to discrimination against a person who converts from one religion to another and concluded that discrimination based on a sex change is sex discrimination under Title VII.

The Schroer case is a reminder to all of the importance of keeping the focus in employment-related decisions on those things that are clearly job-related. Any decision that is influenced by sexual stereotyping or presumptions about persons who do not conform to majority attitudes or “labels” are very likely to run afoul of employment discrimination law.