• Legal Issues: Transgender Issues in Employment

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    October 24, 2012

    by George C. Hlavac, Esq., and Edward J. Easterly, Esq., Norris, McLaughlin & Marcus

    Recently, how employers should handle transgender employees or applicants in the workplace has become a significant issue.  As of now, the courts have not agreed on an answer to this issue.  Moreover, the issue itself has been framed in different ways by different courts to dictate different decisions.  This issue, however, is generally encompassed in cases involving facts alleging discrimination and/or harassment on the basis of sex, gender, or both.

    Price Waterhouse and Its Progeny

    The seminal case in this area and the case that has been relied upon most frequently when addressing this issue is Price Waterhouse v. Hopkins (1989). According to the court in this case, discrimination on the basis of gender stereotype is unlawful sex discrimination. The plaintiff, a female senior manager in an accounting firm, was denied partnership, in part, because she was considered “macho” and “over-compensating for being a woman.” She was advised by her employer that she could improve her chances for partnership if she were to take a “course at charm school,” “walk more femininely, talk more femininely, dress more femininely, wear make-up, have her hair styled, and wear jewelry.”

    The court held that the comments were indicative of gender discrimination and held that Title VII barred not just discrimination because of biological sex, but also gender stereotyping—failing to act and appear according to expectations defined by gender. In this regard, the court noted: “[a]s for the legal relevance of sex stereotyping, we are beyond the day when an employer could evaluate employees by assuming or insisting that they matched the stereotypes associated with their group ...”

    Numerous federal district courts and courts of appeals have relied upon Price Waterhouse’s holding regarding gender stereotyping to find actionable discrimination and/or harassment against cross-dressers, transgendered individuals, and transsexuals.

    In Rosa v. Park West Bank & Trust (2000), a biological male who was dressed in traditionally female attire when he requested a loan application was denied the loan application by the bank. The bank informed Rosa that it would not give him the loan application until he returned dressed as a man. Rosa subsequently filed a claim of sex discrimination against the bank pursuant to the Equal Credit Opportunity Act (which is interpreted the same as Title VII), alleging that by requiring him to conform to sex stereotypes regarding how a man should dress before proceeding with the credit transaction, the bank unlawfully discriminated against him on the basis of sex.

    In denying the bank’s motion to dismiss and allowing Rosa’s claim to go forward, the First Circuit Court explained:

    "It is reasonable to infer that [the bank] told Rosa to go home and change because [it] thought that Rosa’s attire did not accord with his male gender: in other words, that Rosa did not receive the loan application because he was a man, whereas a similarly situated woman would have received the loan application. That is, the bank may treat, for credit purposes, a woman who dresses like a man differently than a man who dresses like a woman. If so, the bank concedes, Rosa may have a claim. Indeed, under Price Waterhouse, ‘stereotyped remarks [including statements about dressing more femininely] can certainly be evidence that gender played a part.’ "

    Courts have stated that after Price Waterhouse, an employer that discriminates against women because, for instance, they do not wear dresses or makeup, is engaging in sex discrimination because the discrimination would not occur but for the victim’s sex. It follows that employers that discriminate against men because they do wear dresses and makeup, or otherwise act femininely, are also engaging in sex discrimination because the discrimination would not occur but for the victim’s sex.

    A similar result was reached more recently in Glenn v. Brumby. There, the plaintiff was a biological male suffering from gender identity disorder. In October 2005, the plaintiff was hired by the defendant as a man. A few months later, however, the plaintiff informed his direct supervisor that he was a transsexual and was in the process of becoming a woman. On Halloween of 2006, the plaintiff came to work dressed as a woman (all employees were permitted to wear costumes). When a supervisor saw the plaintiff, he was sent home. In the fall of 2007, the plaintiff informed the defendant that he was ready to undergo gender transition and would be coming to work as a woman. Shortly thereafter, the plaintiff was terminated by the defendant.

    At his deposition, the plaintiff’s supervisor testified that he fired the plaintiff because he considered it “inappropriate” for him to appear at work dressed as a woman and that he found it “unsettling” and “unnatural” that the plaintiff would appear wearing women’s clothing. Additionally, the supervisor testified that he worried that the plaintiff’s gender transition would be “disruptive” and that some people would view it as a moral issue and it would make his co-workers uncomfortable. The court in Glenn held that the plaintiff had been unlawfully discriminated against on the basis of his gender non-conformity. Relying on Price Waterhouse, the court held that discrimination on the basis of gender non-conformity constitutes discrimination on the basis of sex.

    EEOC Issues Decision on Discrimination and Gender Identity, Change of Sex, Transgender Status

    In April 2012 and based largely on Price Waterhouse and its progeny, the Equal Employment Opportunity Commission (EEOC) issued a decision holding that discrimination based on gender identity, change of sex, and/or transgender status is cognizable under Title VII as “discrimination on the basis of sex.”

    Some courts have avoided the Price Waterhouse sex-stereotyping problem by premising their determinations on the employer’s enforcement of a dress code and grooming policies. These courts have indicated that if an individual was not terminated due to sexual stereotyping, but rather, due to his or her failure to comply with the defendant’s sex-specific dress code and grooming policies, the defendant does not violate anti-discrimination laws. Notwithstanding this fact, an employer must ensure that its policy applies to all employees, requires a unisex uniform, is justified in commonly accepted social norms, is reasonably related to its business needs, does not take male or female mannerisms into account or appear to have a disparate impact on either sex, and does not require an employee to behave in a certain manner.

    Based on the foregoing, it is clear that the issue of whether an employer can prohibit a male employee from wearing dresses/skirts to work has not been definitively answered. Based upon the Price Waterhouse line of cases that prohibit an employer from discriminating against an employee based upon behavior that fails to conform with traditional gender stereotypes, prohibiting a male employee from wearing a dress/skirt to work may subject the employer to liability for sex discrimination pursuant to Title VII. This is especially the case in light of the EEOC’s determination regarding transgender employees.

    As this issue is increasing in the workplace, employers must review their policies to determine appropriate attire for its employees. In light of the foregoing, however, it is clear that if an employer decides to prohibit an employee from wearing certain attire to work and such prohibition leads to an adverse employment action with respect to the employee (discipline or termination), such a decision could result in discrimination liability pursuant to Title VII.

Legal Issues: Transgender Issues in Employment