Wal-Mart Loses Perfect LGBTQ Rating Because of Transgender Harassment

​Businesses should root out all forms of illegal harassment, not just sexual harassment, Wal-Mart is learning. That includes discrimination against transgender employees, according to Sarah Warbelow, legal director for the Human Rights Campaign (HRC).

The civil rights organization suspended the company's perfect score on the group's Corporate Equality Index on Nov. 9 because of Equal Employment Opportunity Commission (EEOC) determinations this past summer that the company harassed two transgender employees.

Tricia Moriarty, a spokeswoman for Wal-Mart, said, "We are proud of our work on LGBTQ [lesbian, gay, bisexual, transgender and queer] inclusive and nondiscriminatory policies. We're disappointed with the HRC's decision to temporarily suspend our score, which was going to be rated at 100 percent for the second year in a row. While we respect the HRC's work, we are confident in Wal-Mart's leading practices that support our LGBTQ communities and look forward to further educating them on our policies."

Floridian and North Carolinian Harassed, EEOC Finds

One of the EEOC investigations found that Sam's Club, which Wal-Mart owns, demoted an employee in Miami from a management position to a night-shift line worker job in retaliation for her complaints of discrimination.

The Miami employee also was unlawfully denied medically necessary care through at least 2016 that would have been covered by the group health benefit plan if not for her transgender status, the commission found. Wal-Mart has provided evidence that it has removed the categorical exclusion for services related to transgender treatment/sex therapy from its associate's health plans effective Jan. 1, 2017.

Wal-Mart unlawfully harassed the other employee, who worked for Sam's Club in Kannapolis, N.C., when its employees referred to her with masculine pronouns both verbally and in written correspondence, according to the agency.

It is common to slip up and use the wrong pronoun when someone is first transitioning, said Myrna Maysonet, an attorney with Greenspoon Marder in Orlando, Fla. But to continue to do so may show unlawful discrimination.

The EEOC issues only a few determinations of discrimination each year despite the thousands of charges that are filed. These determinations may be defeated in a court, if conciliation with the EEOC fails and the agency sues. But Maysonet said companies still want to avoid these determinations.

The employee has more leverage during conciliation. With Wal-Mart, "it's difficult to say that a company has a perfect score when there are documented cases of discrimination," Maysonet noted.

"Employers must train their employees about what discrimination against transgender people looks like and set expectations for a fair, respectful and inclusive work environment," Warbelow said. According to the National Transgender Discrimination Survey, 90 percent of surveyed people who are transgender reported being harassed, mistreated or discriminated against on the job or feeling the need to take actions like hiding their gender transition to avoid negative treatment.

Nearly half—47 percent—said they were fired, not hired or denied a promotion because of being transgender.

High Cost of Transition

The cost of transitioning can exceed $100,000 in the United States, according to a Money magazine article. Only 10 percent of employers cover gender reassignment surgery, although this is up from 5 percent in 2015, according to the Society for Human Resource Management's 2017 Employee Benefits survey.

But refusal to provide benefits based on a protected characteristic is a form of employment discrimination, Warbelow said.

A tone must be set from the top that harassment will not be tolerated in the workplace, she said. There should be an additional, objective level of review in place for any action that would alter a complaining employee's status.

Title VII of the Civil Rights Act of 1964 prohibits discrimination based on sex, which the EEOC and many courts have interpreted to prohibit discrimination based on gender identity. Warbelow said that some courts also have found that the Americans with Disabilities Act (ADA) exclusion for transgender people is unconstitutional, meaning that transgender people also should have recourse under the ADA.

[SHRM members-only toolkit: Managing Equal Employment Opportunity]

Was this article useful? SHRM offers thousands of tools, templates and other exclusive member benefits, including compliance updates, sample policies, HR expert advice, education discounts, a growing online member community and much more. Join/Renew Now and let SHRM help you work smarter.