Supreme Court’s Transgender Case May Have Employment Implications

By Allen Smith, J.D. Nov 3, 2016
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A transgender high school student's fight to use bathrooms that match his gender identity is headed to the Supreme Court, which may issue a ruling that has significance not just for schools but for employers as well, depending on how broadly the court decides the case.

"This case is of extraordinary significance to employers," said Michelle Phillips, an attorney with Jackson Lewis in White Plains, N.Y.

[SHRM members-only toolkit: Employing Transgender Workers]

G.G.

The Supreme Court announced on Oct. 28 that it would hear a case involving Gavin Grimm, a transgender high school student in Gloucester County, Va. The court will decide whether the 4th U.S. Circuit Court of Appeals properly deferred to the Department of Education's interpretation of its Title IX regulations in ordering the school district to let Grimm use the boys bathrooms.

The Education Department issued a Jan. 7, 2015, opinion letter interpreting Title IX, which prohibits sex discrimination in education programs that receive federal financial assistance. The letter stated, "When a school elects to separate or treat students differently on the basis of sex … a school generally must treat transgender students consistent with their gender identity." The 4th Circuit deferred to this letter in ordering the school board to let Grimm use the boys restrooms (G.G. ex Rel. Grimm v. Gloucester Cty. Sch. Bd., 822 F.3d 709 (4th Cir. 2016)).

Even if the appeals court did not have to defer to the Education Department's interpretation, the court will determine whether the department's interpretation is valid and can be enforced under Title IX, noted Mark Phillis, an attorney with Littler in Pittsburgh.

H.B. 2

The G.G. decision likely will impact H.B. 2—the North Carolina state law that blocks state agencies from permitting people to use bathrooms that match their gender identities—as it already has at the district court level.

In Carcaño v. McCrory, 1:16cv236 (M.D.N.C. 2016)), a federal district court in North Carolina struck down Part 1 of H.B. 2. In ruling that transgender students and an employee of the University of North Carolina be allowed to use restrooms that match their gender identities, the court relied on the 4th Circuit's holding in G.G.

The Carcaño case was decided under Title IX, not Title VII  of the Civil Rights Act of 1964. (Like Title IX, Title VII prohibits sex discrimination, but Title IX applies to educational institutions, while Title VII covers employers.) A decision by the Supreme Court overturning the 4th Circuit's decision could "considerably erode" the American Civil Liberties Union's (ACLU's) challenge to H.B. 2 in Carcaño, said Elizabeth Marvin, an attorney with Lewis Baach in Washington, D.C.

The Justice Department has brought a separate claim challenging H.B. 2, suing under Title VII as well as Title IX and the Violence Against Women Act, she noted. "Like the ACLU, the foundation of the Justice Department's suit is the 4th Circuit's decision in [G.G. ex Rel.] Grimm, and that case will be similarly impacted by an adverse Supreme Court ruling," she said.

Impact on Employers

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

He noted that the EEOC ruled in 2015 that denying an employee equal access to a restroom corresponding to the employee's self-identified gender identity is sex discrimination.

"The court's decision may provide clarity on the extent to which the EEOC's interpretation should be afforded deference, which may signal how courts are likely to treat claims of sexual orientation and gender identity discrimination under Title VII in the future," wrote Elise Bloom and Andrew Smith, attorneys with Proskauer in New York City, in an e-mail.  "Some employers may experience little practical effect, however, given that many state and local laws already prohibit discrimination based on sexual orientation and gender identity."

Phillis noted that others aside from the EEOC and the Education Department have interpreted sex discrimination to encompass gender identity discrimination, including the Occupational Safety and Health Administration and the Office of Federal Contract Compliance Programs.

Revise Policies

Michelle Phillips of Jackson Lewis said that a ruling in Grimm's favor will signal to both public and private employers that they should take these issues seriously and revise their policies as follows:

  • Add gender identity or expression to the equal employment opportunity and harassment policies.
  • Prevent misgendering (the intentional misuse of preferred personal pronouns and names), harassment or retaliation against transgender and gender nonconforming employees.
  • Grant all employees, both cisgender (not transgender) and transgender, equal access to the restroom, locker room and other gender-separated facilities based on consistent gender identity or expression and not on the sex assigned at birth.
  • Conduct lesbian, gay, bisexual and transgender sensitivity training to ensure a safe and respectful workplace for everyone.
  • Collaborate with transgender employees on a gender transition plan to set parameters and to manage expectations for all on the gender transition.

In addition, Phillips said, "Given the EEOC's position regarding transgender health coverage discrimination, employers should review the company's medical benefits plans to remove categorical exclusions for transgender medical benefits and ensure coverage for transgender medical benefits."

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