By Laura J. Maechtlen and Craig B. Simonsen

A transgender woman filed a complaint last week against a large healthcare employer alleging sex discrimination in violation of Title VII.

The complainant seeks, among other things, a permanent injunction against the employer from engaging in the “unlawful conduct of discriminating against employees who have undergone, or are undergoing, a gender transition.” Seidler v. Sanford Health, et al., No. 15-cv-00111 (December 1, 2015). The defendant in this case is “one of the largest health systems in the nation, with 43 hospitals and nearly 250 clinics in nine states, and three countries,” with approximately 27,000 employees. See About Sanford Health.

The complaint alleges that the defendant engaged in unlawful discrimination against the plaintiff, a woman who is transgender, because of sex, by  subjecting the plaintiff to different terms and conditions because of sex. Particularly, it alleges that defendant had, and continues to maintain, a “companywide policy or practice that discriminates against transgender female employees by precluding them use of a locker room that is consistent with their sex and/or gender, and/or by intentionally treating transgender females disparately from other employees with regard to the use of a locker room that is consistent with their sex and/or gender.”  The plaintiff alleges that she was “compelled to quit her job” after she was repeatedly denied access to the women’s locker rooms and subjected to disparate treatment from managers.

According to a statement provided to Law360, the U.S. Equal Employment Opportunity Commission investigated a charge that the plaintiff filed with the agency and was “unable to conclude that the information obtained establishes violations of statutes.” The employer indicated that its “employment policies prohibit discrimination of any kind .”

Implications For Employers

As we have noted previously here, the EEOC has been pursuing test cases to establish legal protections for transgender workers under Title VII’s prohibition against “sex” discrimination and harassment as part of its strategic mission even though no federal statute, including Title VII, explicitly prohibits employment discrimination based on gender identity or expression. The EEOC has made clear that, while gender identity and/or expression are not independent classifications for protection under federal law, the agency will attempt to establish a case of sex discrimination through a variety of different formulations.

In that effort, in Macy v. Bureau of Alcohol, Tobacco, Firearms and Explosives, EEOC Appeal No. 0120120821 (April 23, 2012), the EEOC asserted that transgender individuals may state a claim for sex discrimination under Title VII. While the EEOC acknowledged that transgender, like sex stereotyping, was not an independent protected status, it concluded that a transgender person “may establish a prima facie case of sex discrimination through a number different formulations .”

Other than the Macy case, the EEOC has actively pursued R.G. & G.R. Harris Funeral Homes, and others on behalf of transgender workers.

Recommendations For Employers

In order to avoid potential pitfalls in this emerging area of law, employers must be mindful of issues related to gender identity and/or expression that might arise during interviewing, hiring, discipline, promotion and termination decisions.  Employers should be particularly vigilant when an employee identifies as transgender, or announces a plan to undergo a gender transition. Moreover, the theories often articulated by plaintiff’s counsel are not just limited to transgender employees—many forms of “sex stereotyping” may give rise to actionable claims, not just discrimination or harassment against individuals who identify as transgender.

Employers must also be aware that transgender individuals may be affirmatively protected under state or local laws (see our analysis of a recent California case), and that any allegations concerning transgender discrimination, gender stereotyping or gender identity, require the same analysis, investigation and response as a traditional sex discrimination complaint. Finally, employers should consider whether to implement gender transition guidelines for human resources and/or management that define a process through which employees and management approach an employee gender transition in the workplace.