When Eric Becomes Erica:

Emerging Issues Related to Transgender Discrimination in the Workplace

By Eric Kendall Banks
eric.banks@kutakrock.com

Transgender employees are people whose birth sex does not match their internal perception or external expression of their gender identity. Transgender is an umbrella term which may encompass, but is not limited to, people who are transsexual. Thirteen states and approximately 90 cities and counties nationwide have outlawed discrimination against transgender employees. In 2000, approximately 20% of the American population was covered by laws prohibiting transgender discrimination. This percentage had risen to 37% in 2007, or approximately 105 million Americans. A total of 125 Fortune 500 companies have policies prohibiting transgender discrimination. On August 8, 2006, the American Bar Association House of delegates passed Resolution 122B, “which urges the protection of transgender people in employment.”[1]

This issue will affect more and more employers on many fronts. Should transgender employees be allowed to use any bathroom they choose? How do you manage the relationship of the transgender employee with other employees, customers or clients? Is the transgender employee entitled to greater legal rights if she or he has undergone a sex change operation? Are employers held to a different standard if the employee is “fully committed” to being transgender, as opposed to someone having a more blended lifestyle, assuming the traits of different genders on different days?

Legislatures and courts have taken many approaches to addressing claims of transgender discrimination. Some federal circuits that have examined the issue of whether Title VII covers transgender employees have stated that it does not. The prevailing federal approach under Title VII adheres to a traditional definition of “sex” for two reasons: the legislative history of Title VII and Congress’s failure to include sexual orientation as a protected classification. However, this may provide little protection for employers if the transgender employee argues that he or she faced discrimination not because of being transgender but because of sexual stereotyping.

The seminal case is Price Waterhouse v. Hopkins, 490 U.S. 228 (1989), where the United States Supreme Court broadened the interpretation of “sex” to include gender stereotyping. Id. at 250-251. The plaintiff was not a transsexual, but rather an “aggressive” woman who was passed over for a promotion because she was too “macho.” Id at 234-235. The Supreme Court established that Title VII’s “because of . . . sex” language included discrimination based on biological sex and gender discrimination, that is, discrimination based on a failure to conform to stereotypical gender norms.

Last September, the District Court of the D.C. Circuit relied heavily on the Price Waterhouse reasoning when it ruled in favor of a transgender person whose offer of employment was rescinded after she revealed she would be transitioning from a male to a female. In Schroer v. Billing, 577 F. Supp. 2d 293 (D.D.C. 2008), the plaintiff involved a highly decorated retired Army Colonel who had been an Airborne Ranger qualified in the Special Forces and who possessed the top‑secret security clearance required by the Library of Congress for the position of security analyst. She received the highest scores of any of the other candidates for the position. The court found the reasons offered for rescinding the job offer were pretexual. It also said the decisions that define the word “sex” in Title VII as referring only to anatomical or chromosomal sex have been eviscerated by Price Waterhouse.

Transgender employees may seek relief under state or local laws even if they do not work in one of the jurisdictions that specifically outlaws discrimination against transgender employees by claiming they are handicapped or disabled. Whether transgenderism is a personality disorder is a controversial issue. Technically, transexualism is a psychiatric disorder known as gender identity disorder (“GID”).[2] However, there is disagreement within the mental health community regarding whether GID should be listed in the DSM as a mental disorder. Also, transgender advocates argue that it gives a misleading picture of transgender people and their lives because not all transsexual people have mental health problems.

Fortunately, employers do not need to be concerned about a transgender employee filing a claim under the Americans with Disabilities Act (“ADA”). ADA Section 12208 specifically states the ADA does not apply to transvestites. And the applicable federal regulation states in Section 1630.3 that disability does not include “transvestism, transexualism, pedophilia, exhibitionism, voyeurism, gender identity disorders not resulting from physical impairments, or other sexual behavior disorders.” It also says that homosexuality and bisexuality are not impairments and so are not disabilities under the ADA.

The enhanced protection available to employees under state and local laws requires employers to be particularly sensitive to the evolving issues surrounding transgenderism and to be more open‑minded regarding how they view gender restrictions. The recent changes in the law and the uncertain judicial landscape behoove employers to err on the side of caution and treat issues involving transgender employees with the same diligence as they would show employees in any protected class. Most importantly, when in doubt, employers should make no adverse employment actions involving transgender employees until they have consulted with their attorneys at Kutak Rock LLP.

[1] Amanda S. Eon, The Misconception of “Sex” in Title VII: Federal Courts Reevaluate Transsexual Employment Discrimination Claims, 43 Tulsa L. Rev. 765, 770 (2008).
[2] Diagnostic and Statistical Manual of Mental Disorders IV, American Psychiatric Association (1994). GID is also known as gender dysphoria.

Copyright 2009. Eric Kendall Banks. All Rights Reserved. No claim to original government works. eric.banks@kutakrock.com