Transgender Student’s Case Raises Questions for Employers

Circuit court rulings could clarify definition of ‘sex discrimination’

Allen Smith, J.D. By Allen Smith, J.D. March 8, 2017
Transgender Student’s Case Raises Questions for Employers

​Employers and educators alike are left uncertain about the extent of coverage of laws prohibiting sex discrimination, now that the Supreme Court sent a transgender student's case back to the lower courts.

Gavin Grimm (known in court documents as "G.G.") is a transgender student seeking to use the bathroom that matches his gender identity at his Virginia high school. The Supreme Court vacated a lower court ruling in his favor on March 6 and sent the case back to the 4th U.S. Circuit Court of Appeals. The decision followed the Department of Justice's (DOJ's) and Department of Education's (DOE's) Feb. 22 withdrawal of guidance that schools should let transgender students use bathrooms that match their gender identity. The circuit court's forthcoming ruling should provide a better idea of whether the Title IX prohibition on sex discrimination includes discrimination based on gender identity. And its holding might influence courts determining whether Title VII of the Civil Rights Act of 1964 prohibits discrimination based on gender identity.

The guidance had stated that Title IX, which prohibits sex discrimination in educational institutions that receive federal financial assistance, was interpreted to prohibit discrimination based on gender identity. In a letter rescinding the guidance, the DOJ and DOE said "there must be due regard for the primary role of the states and local school districts in establishing educational policy."

Uncertainty over Definition of 'Sex Discrimination'

"The vacating of the lower court ruling in G.G. underscores the unsettled nature of federal law regarding transgender rights," said Sam Schwartz-Fenwick, an attorney with Seyfarth Shaw in Chicago.

"Because the language in Title IX mirrors that in Title VII with regard to discrimination on the basis of sex, the G.G. case has significance for employers in that the [appeals] court's ruling could provide clarity as to whether the term 'sex' in Title IX and Title VII should be interpreted to include gender identity," noted Nancy Van der Veer Holt, an attorney with FordHarrison in Washington, D.C. Although the court will consider only Grimm's Title IX claim, the definition of sex discrimination under this statute might influence how courts interpret sex discrimination under Title VII.

[SHRM members-only toolkit: Employing Transgender Workers]

Last April, the 4th Circuit ruled that the Virginia school board's decision to not let Grimm use the boys' bathroom violated Title IX, relying heavily on a 2015 DOE letter interpreting the term "on the basis of sex" in Title IX to include gender identity

She noted that before the Supreme Court vacated the G.G. case and sent it back to the lower courts, the issues before it were:

  • Whether courts should extend deference to an agency letter (here, the 2015 DOE's Office of Civil Rights letter) that, among other things, does not carry the force of law and was adopted in the context of the very dispute in which deference is sought.
  • Whether, with or without deference to the 2015 DOE letter, the department's specific interpretation of Title IX, which stipulated that a funding recipient providing sex-separated facilities must "generally treat transgender students consistent with their gender identity," should be upheld. 

"People would like certainty," said Mark Phillis, an attorney with Littler in Pittsburgh. "Employers want to know what the rules are" so they can adapt policies and procedures accordingly.

Sending the case back to the lower courts "removes the hope many had that we were going to get certainty as to what the law is," Phillis said. Two appeals courts—the 6th and 11th circuits—have held that sex discrimination under Title VII includes the definition of gender identity, he noted. And the Equal Employment Opportunity Commission (EEOC) takes this position as well.

The Supreme Court's vacating of the G.G. case simply delays a Supreme Court ruling on whether the word "sex" in Title IX—and in Title VII—should be read to include gender identity, Van der Veer Holt said. "The Title VII meaning of 'sex' is presently being considered by the Second, Fifth, Seventh and 11th circuits."

Phillis agreed that the issue will now percolate in lower courts and that this may have been the Supreme Court's reasoning for vacating the case—it wanted more decisions in the lower courts before it took up the issue. So, expect more litigation on Title IX bathroom access cases, in addition to ones examining whether Title VII includes gender identity and sexual orientation discrimination, he said.

Be Aware of EEOC's Position

"The issues relating to transgender employees are complex and evolving," said Todd Solomon, an attorney with McDermott, Will & Emery in Chicago. "Many companies wish to stay ahead of federal law and accommodate transgender employees when possible and avoid being a test case" for the EEOC.

"While this case is important by analogy, it really has little to no bearing in the Title VII context for private employers," said Michelle Phillips, an attorney with Jackson Lewis in White Plains, N.Y. "Private employers must be cautious in following any ruling in the Grimm case and instead should be careful not to run afoul of the EEOC's interpretation of Title VII." She added, "The EEOC has not changed course on LGBT [lesbian, gay, bisexual and transgender] rights at all. In fact, the EEOC renewed its emphasis on LGBT rights in its 2017-2020 Strategic Enforcement Plan." 

Phillips stated, "The arguments set forth by the school district in the Grimm case are a stark reminder that employers need to be equipped to deal with staff objections to restroom usage and to ensure that there is no harassment, intimidation or ostracism of transgender employees." She recommended that employers be "supportive and respectful toward all employees, including transgender employees and to work in partnership to accommodate the myriad of issues regarding the gender transition plan." 

Elizabeth Marvin, an attorney with Lewis Baach in Washington, D.C., said that whether Title IX encompasses gender identity discrimination "could potentially have an impact on employers, because it would require the [Suprerme Court] to consider whether Title IX's prohibition on discrimination on the basis of sex includes gender identity," should the issue again reach the Supreme Court. "A decision that 'sex' as used in Title IX encompasses gender identity would effectively expand the definition of 'sex' as used in other statutes, such as Title VII."

"The position federal courts will take on the scope of Title VII is unsettled, a trend that will continue until the Supreme Court weighs in or express federal legislation is passed barring transgender discrimination," said Schwartz-Fenwick.

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