By Sam Schwartz-FenwickMichael W. Stevens, and Kylie Byron

Seyfarth Synopsis: The Department of Justice has reversed the previous Administration’s position on employment protections for transgender individuals, and issued a memorandum that will likely be relied on by private employers seeking to use their religious faith to engage in otherwise prohibited discriminatory conduct.

In a bombshell week, with significant implications for employers, the Department of Justice issued two memos setting forth its views on transgender discrimination claims and an employer’s ability to make decisions based on its religious beliefs.

On October 5th, 2017, the Department of Justice released a memorandum stating that the new position of the DOJ would be that Title VII does not protect transgender persons from discrimination in the workplace. However, somewhat confusingly, the memo specified that transgender people were still protected under Title VII’s existing formulation. This presumably means that a transgender person may sue under Title VII if their employer discriminates against them on the basis of their race or country of origin, but not on the basis of sex or gender identity. The DOJ had previously argued in Court that Title VII does not extend to claims of sexual orientation discrimination.

On October 6th, 2017, the Department issued new guidance providing that “[e]xcept in the narrowest of circumstances, no one should be forced to choose between living out his or her faith and complying with the law.” The directive explicitly states that private companies must be given the same leeway regarding religious beliefs that churches receive. This guidance may impact hiring, and could possibly give any private organization the ability to hire, fire, and discipline employees based upon the faith of the owner or supervisor. It may also lead to changes in benefit plans that expressly exclude on religious grounds transgender coverage and/or same-sex spousal benefit.

These directives were not unexpected. Nonetheless, they mark a sharp reversal of DOJ policy. Under the Obama Administration, the DOJ had held the position that transgender employees were protected from discrimination under Title VII, congruent with the EEOC’s position. Specifically, the Department’s position was that gender identity discrimination was a form of sex stereotyping and thus covered by under Title VII. The DOJ intervened in litigation throughout the country advocating this view of the statute. Likewise, the prior administration argued in Hobby Lobby v Burwell, that private companies cannot claim exemption on religious grounds from generally applicable statutes.

In addition, the DOJ’s new course puts it at odds with the EEOC. The EEOC continues to advocate for a broad interpretation of Title VII that extends to claims of sexual orientation and gender identity discrimination.   Further it remains the EEOC’s position that a business cannot defend otherwise discriminatory conduct by arguing such conduct was consistent with its religious beliefs.

The memos underscore that this is an area of law filled with uncertainty. The law on the scope of Title VII’s coverage, and the ability of religion to act as an affirmative defense to otherwise discriminatory conduct, remain unsettled. The memos do not resolve the issue. The Department of Justice has stated its viewpoint and direction, but these directives do not supersede state or federal law already in place. Further, these memos do not control the position of the EEOC.

It is anticipated that these memos will lead to an increase in targeted employment lawsuits from impact groups. How such cases will turn out is unknown.

What is known is that these issues will remain in flux until either the Supreme Court hears the issue or Congress passes clarifying legislation. This term, the Supreme Court in Masterpiece Cakeshop will be given the opportunity to provide some insight into how it views the tension between religious rights and principles of non-discrimination. The case involves whether or not a business (here a bakery) is permitted to refuse service to same-sex couples on the basis of the business-owner’s faith. The baker asserts a First Amendment rights to religious liberty and freedom of speech. A ruling in favor of the baker would be consistent with the DOJ’s October 6 memo, and could dramatically change the employment law landscape. As with the DOJ memo, such a ruling could be relied on by employers and plan sponsors to justify otherwise discriminatory actions in hiring, promotion, firing and plan design.

As the policy change by the DOJ is not binding, it is not advisable to shift employment policies based upon the Attorney General’s statements. Treating transgender employees with equality in the workplace is a best practice standard that increases employee safety and productivity and helps with recruitment, retention and morale. Further, inclusive policies mitigate against the risk of potential litigation. In addition, several states and cities have protective statutes that prohibit discrimination against transgender people in employment, and federal courts in multiple jurisdictions have found transgender claims covered by Title VII.

For more information on this topic, or for advice or assistance in helping your workplace comply with best practices for transgender employees, please contact the authors, your Seyfarth Attorney, or any member of Seyfarth Shaw’s Workplace Policies and Handbooks Team.

By Sam Schwartz-Fenwick, Michael W. Stevens, and Kylie Byron

Seyfarth Synopsis: The first eight months of the new administration signals a retrenchment on the executive branch’s view of legal protections due LGBT individuals, including in employment.

Recently, in a dramatic shift, the Department of Justice broke ranks with the Equal Employment Opportunity Commission, and filed an amicus brief in the Second Circuit in Zarda v. Altitude Express, Inc., No 15-3775, Dkt. #417 (S.D.N.Y. July 26, 2017).  In that brief, the Department argued that, contrary to its prior position (and that of the E.E.O.C.), discrimination on the basis of sexual orientation was not prohibited under Title VII as harassment on the basis of gender. The E.E.O.C.’s longstanding position is that such discrimination is prohibited, a position that recently found support in the Seventh Circuit in Hively v. Ivy Tech, No. 15-720 (7th Cir. Apr. 4, 2017) (en banc).

There is currently a circuit split on this issue, with the Seventh Circuit finding that sexual orientation discrimination is prohibited by Title VII, and the Eleventh Circuit finding that it is not. The sudden reversal of the Department of Justice, injects further uncertainty in the already unsettled landscape of LGBT protections under Title VII.  Employers can expect this uncertainty to continue until the issue is addressed by either Congress or by the Supreme Court. Employers seeking to navigate this in flux legal landscape should work closely with counsel.

In another shift on LGBT issues, in March 2017, the Administration revoked Executive Order 13673, or the “Fair Pay and Safe Workplaces Order.”  Order 13673 required federal government contractors and prospective contractors to show compliance with Order 13672, an order that barred federal contractors from discriminating in employment on the bases of sexual orientation or gender identity. By revoking Order 13673, the  Administration has limited the impact of Order 13672.  While the nondiscrimination Order remains in place, the Order that would hold contractors accountable has been revoked.  Revocation of Order 13673 has created uncertainty among federal contractors as to their responsibilities, and as to appropriate best practices. To remain compliant with Order 13672, employers should work closely with counsel.

In addition, the Administration has revoked the Department of Education issued guidance regarding transgender students. The DOE under the Obama administration stated that transgender students were protected under Title IX on the basis of gender identity.  Thus, schools that did not permit transgender students to use the necessary hygienic facilities (such as bathrooms) appropriate to their gender were in violation of Title IX’s nondiscrimination provisions and risked losing federal funds.

In February 2017, the Trump Administration rescinded that guidance finding it did not “contain extensive legal analysis or explain how the position is consistent with the express language of Title IX.” Absent legal mandates to the contrary, schools can continue to offer protections to their transgender students consistent with their beliefs as to what is in the best interest of students.  Schools that seek to limit bathroom access to the sex-at-birth assigned to their students will need to grapple with how they can enact and implement such a rule while still complying with the present DOE guidance which provides that LGBT students must be assured that they “are able to learn and thrive in a safe environment” and cannot be subjected to discrimination.

The Administration’s view that Title IX does not protect transgender individuals has also led it to consider making changes to Section 1557 of the Affordable Care Act, Section, the regulations containing anti-discrimination protections in the provision of healthcare. Section 1557 bars covered entities from discriminating, including barring coverage based on a transgender exclusion in a plan. Last year, a court in the Northern District of Texas placed a nationwide preliminary injunction on enforcement of the transgender related Section 1557 regulations in a suit against HHS. The current administration chose not to appeal the decision. The Department of Justice further asked the court for a remand to HSS, so that HHS could determine whether or not the regulations comported with Title IX. The court granted this remand, and HHS is currently reportedly planning a new proposed rule for that purpose.

On August 4, 2017, the Justice Department announced that it was reviewing a draft proposed rule already prepared by HHS. It is likely that the proposed rule will unwind the transgender protections of Section 1557, in whole or provide exemptions to the regulations. Healthcare providers, employers, human resources departments and benefits administrators should work closely with counsel on this rapidly changing area of the law.

In further recent action, on July 26, 2017 President Trump tweeted that he would bar transgender persons from service in the military, and thus discharge all transgender service members. While a tweet does not appear to create legal policy, the tweet, and subsequent tweets on the subject, sent strong signals regarding his intention. On August 9, 2017, two lawsuits were filed alleging that although the ban has not yet been enacted, the policy announcement itself caused harm to service members. While this policy change does not directly impact private employers it underscores the need to keep abreast of change in the law that relate to gender-identity based protections, and to consult with counsel to evaluate internal policies, practices, and procedures with an eye toward gender identity claims.

Finally, in understanding the impact of the new administration on LGBT issues, it is instructive to examine the President’s judicial appointments, especially his appointment of Neil Gorsuch to the Supreme Court. While numerous publications, including ours, have been written on Justice Gorsuch’s outlook towards LGBT individuals, his dissent in Pavan v. Smith is instructive as to his leaning in future LGBT-related cases. In Pavan, the Court held that the same-sex parents of children in the state of Arkansas may not be prohibited from being listed as legal parents on their child’s birth certificate.  The Court held, per curiam, that because Arkansas already listed non-biological parents on birth certificates for non-same-sex couples, the state could not deny the same treatment to same-sex couples.

Justice Gorsuch, along with Justices Alito and Thomas, dissented in part arguing that “essentialist” biological or anatomical rationales should be the primary determining factor of parenthood, rather than adoption and other legal same-sex parenting methods. He further called into question the reach of Obergefell v. Hodges.  Judge Gorsuch’s views on LGBT issues will receive attention next year when the Court addresses whether a business can refuse to provide service to a gay couple.  This decision has wide ranging implications for employers and plan administrators, as it is expected to touch on the extent to which religious liberty can trump discrimination claims.

As the current administration continues to unwind regulations and legal arguments put forth by the Obama Administration, the legal landscape regarding LGBT employment issues will continue to remain in flux. Stay tuned to this blog for further analysis of subsequent developments.

For more information on this topic, please contact the authors, your Seyfarth Attorney, or any member of Seyfarth Shaw’s Workplace Policies and Handbooks Team.

By Abigail Cahak, Sam Schwartz-Fenwick, and Mary Kay Klimesh

Seyfarth Synopsis: The Seventh Circuit affirmed that a transgender student demonstrated a likelihood of success on claims that his school district’s decision to prohibit him from using the boys’ restroom violated both Title IX and the Constitution’s Equal Protection Clause.

In Whitaker v. Kenosha Unified School District No. 1 Board of Education, a transgender male high school student alleged that his school district informed him that, because he was listed as “female” in the school’s records and had not undergone a surgical transition–a procedure prohibited for minors–he could use only the girls’ restroom or a gender neutral bathroom.  The Complaint asserted that this violated his civil rights under Title IX and the Equal Protection Clause of the Fourteenth Amendment.  One month after initiating the case, the student filed a motion for preliminary injunction.  The next day, the school district filed a motion to dismiss.  The United States District Court for the Eastern District of Wisconsin denied the motion to dismiss and granted the preliminary injunction.

On May 30, 2017, the United States Court of Appeals for the Seventh Circuit affirmed the district court’s decision. The Seventh Circuit declined to hear an appeal on the motion to dismiss, concluding it was not “inextricably intertwined” with the preliminary injunction ruling.

In affirming the lower court’s ruling, the appellate court held that the student met his burden by making a threshold showing in support of the preliminary injunction. First, because two experts opined that use of the boys’ restroom was integral to his “transition and emotional well-being,” the student was likely to suffer irreparable harm without an injunction.  Second, any harm the student would face without an injunction could not be remedied by an after-the-fact award of monetary damages because he provided evidence that he had contemplated suicide and this potential harm cannot be adequately remedied by legal relief.  Third, the student’s chances of success on his Title IX and Equal Protection Clause claims were “better than negligible.”

Regarding Title IX, the court analogized to Title VII, finding that current case law did not foreclose the student from bringing his claim on a theory of sex stereotyping, as articulated by the Supreme Court in Price Waterhouse v. Hopkins.  With regard to the Equal Protection Clause, the court found the school district’s policy was a classification based on sex and thus merited application of heightened scrutiny, noting that “[w]hen a sex-based classification is used, the burden rests with the state to demonstrate that its proffered justification is ‘exceedingly persuasive.’”

The Seventh Circuit rejected the school district’s argument that the student’s presence in the boys’ restroom infringed on the privacy of other students. In so doing, the court recognized the legitimate interest a school district has in ensuring bathroom privacy rights are protected, but noted that the “interest must be weighed against the facts of the case and not just examined in the abstract, to determine whether the justification is genuine.”  The Seventh Circuit reviewed the record and concluded that the “School District’s privacy argument is based on sheer conjecture and abstraction,” citing the fact that the student had used the restroom for months without issue and that the school district presented no evidence that his presence was any more intrusive than that of “an overly curious student of the same biological sex who decides to sneak glances at his or her classmates performing their bodily functions.”

The decision suggests that, although the present administration has backed away from interpreting Title IX to prohibit discrimination based on transgender status, private litigants may find support for this theory in court. Further, Whitaker may be indicative of a growing trend in the Seventh Circuit to take an expansive view of coverage of LGBT status under civil rights laws.  For example, just over two months ago, the court concluded in its en banc decision in Hively v. Ivy Tech Community College of Indiana–a decision cited in Whitaker–that Title VII covers sexual orientation discrimination.  Stay tuned for further developments in this rapidly evolving area of the law.

For more information on this or any related topic please contact the authors, your Seyfarth attorney, or any member of the Workplace Policies and Handbooks Team.

 

 

 

By Sam Schwartz-Fenwick and Lucas Deloach

Seyfarth Synopsis: Increasingly, courts have held that discrimination on the basis of sexual orientation and gender identity violates Title VII. Federal district courts in Nevada and Pennsylvania have recently joined their ranks.  Nonetheless, the issue remains unsettled.

In the previous two months, federal courts in Nevada and Pennsylvania held that Title VII’s prohibition on sex discrimination includes discrimination based on gender identity and sexual orientation, respectively. These rulings accompany the Seventh Circuit’s recent decision to vacate its panel ruling that Title VII did not extend to claims of sexual orientation discrimination and to re-hear the case en banc.

In Roberts v. Clark County School District, a transgender police officer brought suit in the District of Nevada after the Clark County School District prohibited him from using either the men’s or women’s restrooms.  The school district argued in its motion for partial summary judgment that Title VII only prohibits discrimination based on “biological sex.”  In an October 4, 2016 ruling, the court disagreed and “join[ed] the weight of the authority” concluding that discrimination based upon an individual’s transgender status violated Title VII.  It further concluded that the plaintiff was entitled to summary judgment on his discrimination claim, as he was “clearly treated differently than persons of both his biological sex and the gender he identifies as ­­- in sum, because of his transgender status.”

In EEOC v. Scott Medical Health Center, P.C., the Equal Employment Opportunity Commission (EEOC) sued a pain management and weight loss clinic and alleged that a gay male employee was constructively discharged after a manager created a sexually hostile work environment.  The complaint recited a number of the manager’s alleged homophobic slurs and statements. The defendant moved to dismiss the complaint on the grounds that Title VII does not protect discrimination on the basis of sexual orientation.  The court denied the defendant’s motion exactly one month after the Roberts decision.  The court remarked that “the singular question” is “whether, but for [the employee’s] sex, would he have been subjected to this discrimination or harassment.”  The court thought not and held that Title VII’s “because of sex” provision prohibits discrimination on the basis of sexual orientation.

Of course, these decisions are not the final word. As President-elect Trump assembles his administration, it is not yet clear whether the executive branch and its agencies will depart from the position that the protections of Title VII extend to LGBT statuses.  Additionally, the U.S. Supreme Court has agreed to hear an appeal which asks the Court to weigh in on the issue of restroom access for transgender students.  While the appeal directly implicates Title IX, the ruling could also impact courts’ interpretations of prohibitions on sex discrimination under Title VII.

Given this uncertainty and the patchwork of court decisions across the country, employers should consult with counsel to review their policies, practices, and procedures as they relate to sexual orientation and gender identity claims.

For more information on this or any related topic please contact the authors, your Seyfarth attorney, or any member of the Labor & Employment or Workplace Policies and Handbooks Team.

 

 

 

By Mary Kay Klimesh, Sam Schwartz-Fenwick, and Abigail Cahak

Seyfarth Synopsis: The Supreme Court is poised to hear and rule on the Obama Administration’s position regarding coverage of gender identity within Title IX’s prohibition on sex discrimination. However, the status of the case is uncertain in light of who the incoming Trump Administration will appoint to the currently vacant ninth seat vacancy on the Court.

On October 28, 2016, the U.S. Supreme Court agreed to hear an appeal in the matter of Gloucester County School Board v. G.G., which asks the Court to weigh in on the issue of restroom access for transgender students.  The Supreme Court’s ruling is anticipated to address whether the U.S. Department of Education (“DOE”) may interpret a federal law prohibiting sex discrimination to cover claims based on gender identity.

The case appeals the decision of the U.S. Court of Appeals for the Fourth Circuit, which concluded that a Virginia school board violated Title IX when it decided not to allow a transgender male student to use the boys’ restroom.

The District Court Dismisses the Case

The U.S. District Court for the Eastern District of Virginia initially dismissed the plaintiff’s case, reasoning that, although Title IX prohibits discrimination on the basis of sex, it does not include concepts such as gender, gender identity, or sexual orientation in that prohibition. The District Court concluded that Title IX’s regulations allow schools to provide separate restrooms on the basis of sex, that the plaintiff’s biological sex is female, and that requiring him to use the girls’ restroom did not constitute sex discrimination.

The Fourth Circuit Reverses Due to Deference to the DOE’s Interpretation

The Fourth Circuit reversed based on deference to the DOE’s position that the term “sex” as used in Title IX incorporates gender identity.

Since 2014, the DOE and other federal agencies, including the U.S. Department of Housing and Urban Development, Occupational Safety and Health Administration, U.S. Office of Personnel Management, and Equal Employment Opportunity Commission, have interpreted and enforced their respective statues and regulations prohibiting sex discrimination to include a ban on gender identity discrimination.

In a January 7, 2015 opinion letter, the DOE stated that “[w]hen 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” and cited its prior statements in a December 2014 policy document to similar effect.  More recently, in May 2016, the DOE issued a Dear Colleague letter reiterating its position that, when a school is notified by a parent or guardian that their child will assert a gender identity different from previous representations or records, the school must begin treating the student consistent with that gender identity and that Title IX imposes no medical diagnosis or treatment requirement as a prerequisite.

The Fourth Circuit concluded that the DOE’s interpretation of its own Title IX regulations was entitled to Auer deference, which requires that an agency’s interpretation of its own ambiguous regulation be given controlling weight unless the interpretation is plainly erroneous or inconsistent.  The court found the DOE’s interpretation permissible because “[a]lthough the regulation may refer unambiguously to males and females, it is silent as to how a school should determine whether a transgender individual is a male or female.”  Further, “[t]he regulation is silent as to which restroom transgender individuals are to use when a school elects to provide sex-segregated restrooms, and the Department’s interpretation, although perhaps not the intuitive one, is permitted by the varying physical, psychological, and social aspects.”  And although the DOE’s interpretation was “novel,” this alone “does not render the current interpretation inconsistent with prior agency practice,” particularly where the DOE and other federal agencies have consistently enforced the position since 2014.

An Uncertain Future

The school board petitioned the Supreme Court to hear the case arguing that the Fourth Circuit erred because the DOE’s interpretation actually alters the meaning of Title IX.  The Supreme Court agreed to hear the case and has granted certiorari on two questions: first, whether Auer deference should extend to an unpublished agency letter and, second, whether, regardless of deference, the DOE’s interpretation of Title IX and its regulations should be given effect.

It is unclear how President-elect Trump will handle the pending case once in control of the DOE and he has not clearly indicated his intentions on the matter.  However, Vice President-elect Pence has stated his position that the issue should be resolved at the local level.  As a practical matter, the new Administration could withdraw the DOE’s policy statements which could render the case-or-controversy requirement moot or which could otherwise prompt the Supreme Court to remand the decision to the lower courts for reconsideration.

Assuming the case proceeds forward, it will be heard during the Supreme Court’s October 2016 Term, which runs through June 2017.  The Supreme Court’s ruling will likely have a broader impact beyond education and could also have application to cases interpreting prohibitions on sex discrimination contained in other federal statutes, including Title VII of the Civil Rights Act of 1964.  The decision is expected to be sharply divided amongst the justices and, with Justice Scalia’s seat still sitting vacant, it is unknown how the lack of a ninth justice or the appointment of that position may impact the ruling.

For more information on this or any related topic please contact the authors, your Seyfarth attorney, or any member of the Workplace Policies and Handbooks Team.

By Sam Schwartz-Fenwick and Kylie Byron

Seyfarth Synopsis: In State of Texas v. United States, a District Court issued a nationwide injunction to enjoin the Department of Education and Department of Justice from enforcing their guidelines on accommodations for transgender students.  The injunction does not prevent states from permitting accommodations.

In a setback for the Obama Administration, and supporters of transgender inclusion, a U.S. District Court for the Northern District of Texas issued a preliminary injunction as to enforcement of the federal government’s Title IX guidance on transgender bathroom policies in schools. Under the departmental guidance, schools to comply with Title IX’s prohibition on sex-discrimination were required to permit transgender students to use bathrooms consistent with their gender identity, regardless of their sex assigned at birth.

The Court found the departments prematurely issued the guidance, as before issuance they did not comply with the notice and comment period required by the APA for “final agency action.” The Court found these steps necessary as it determined the guidance necessitates added regulatory compliance such as reconstruction of existing restrooms. The Court further disagreed with the administration’s position that “sex” in Title IX extends to gender identity, finding that “sex” under Title IX is not “fungible” and does not encompass the claims of transgender persons.  The Court declined to follow the Fourth Circuit’s affirmation of the departmental guidance in G.G. v. Gloucester County School Board, holding the Fourth Circuit wrongly found the definition of “sex” capable of encompassing transgender claims, and further noting the Supreme Court indicated its intent to overturn G.G. by issuing a stay.

The Court rejected the notion that non-inclusive bathroom policies gravely endanger transgender students. It instead found that in light of the Supreme Court stay in G.G., no irreparable harm would arise to students if federal guidance were enjoined.

The injunction is nationwide in scope, though it does not apply to states or cities that have already passed laws that require transgender-inclusive restrooms outside of the context of Title IX. In addition, no portion of the injunction holds that transgender-inclusive restrooms violate Title IX or are themselves illegal. In short, even if the district court decision is upheld, a school may still lawfully choose to implement an inclusive restroom policy; however, the federal government may not require a school to do so.

That said there is an active question as to whether the district court’s ruling will apply in the Fourth Circuit, given that the Court of Appeals ruled in in G.G. that Auer deference, and federal guidance on transgender inclusion, are appropriate.  It is also of course uncertain whether the injunction itself will be upheld on appeal.  If the Fifth Circuit affirms the injunction, there will be a circuit split with the Fourth Circuit thus making review by Supreme Court likely.  The Supreme Court has not yet decided whether it will review the Fourth Circuit’s injunction in G.G., and if the Supreme Court does not do so, or does not overturn G.G, the Fourth Circuit will be required to follow federal guidance on Title IX.

The injunction in State of Texas predicts a period of significant uncertainty in the law regarding gender identity protection under Titles VII and IX , beginning with contradictory rulings in various district courts, potential circuit splits, and culminating with the need for legislative or Supreme Court action.  Schools and employers should consult with counsel to evaluate their internal policies, practices and procedures with an eye towards potential discrimination claims.

If you have questions regarding this topic, please contact the authors or your Seyfarth attorney.

 

By Sam Schwartz-Fenwick and Kylie Byron

Seyfarth Synopsis: The Seventh Circuit has ruled that Title VII does not provide protection from discrimination on the basis of sexual orientation. However, the reasoning behind the Court’s ruling seems calculated to bring the question before the Seventh Circuit on en banc review or before the Supreme Court itself.

In a defeat for proponents of an expansive interpretation of Title VII, the Seventh Circuit in Kimberly Hively v. Ivy Tech Community College, affirmed the district court’s ruling that Title VII does not provide protection from discrimination on the basis of sexual orientation. However, language in the opinion suggests that the staying power of this ruling might be short-lived.

While noting Circuit precedent such as Hamner v. St. Vincent Hosp. & Health Care Ctr., Inc., 224 F.3d 701, (7th Cir. 2000) finding that Title VII does not extend to claims of sexual orientation discrimination, the Court focused the bulk of its 42 page decision on whether this precedent can stand now that the EEOC has taken the position that sexual orientation discrimination is per se sex discrimination under Title VII.

The Court appeared friendly to the reasoning of the EEOC. It noted that the line between sexual orientation discrimination and impermissible gender stereotyping is difficult to define, when it exists, and that separating sexual orientation claims from sex and gender stereotyping claims has the “illogical” result of protecting heterosexual individuals who make gender stereotyping claims but not gay, bisexual or lesbian individuals who make the same claims.  The court also noted that there is “no rational reason” for protecting LGB employees from gender stereotyping claims only if that employee acts “stereotypically gay” enough that their behavior can be seen as flagrantly defiant of gender norms.

The Court then noted that, despite the difficulty in separating sex stereotyping claims from sexual orientation claims, some discrimination claims are themselves discrimination on the basis of sexual orientation rather than on the basis of sex discrimination, such as stereotypes about lifestyle. As such, the Court stated that not all sexual orientation claims are sex stereotyping claims, and thus despite the “unsatisfactory” results and disagreements in district courts, Title VII could not be extended to cover sexual orientation absent further clarification from the Supreme Court.

The Circuit’s ruling in Hively is yet another indicator – as noted by the Court of Appeals itself, and by our previous blogs – that a unified prohibition on sexual orientation discrimination will almost certainly have to come from the Supreme Court or through legislative action such as the Equality Act.  With the Court’s order of a stay of the Title IX case G.G. v. Gloucester Cty. Sch. Bd. (a case involving the scope of the definition of “sex” under Title IX), the Court may be indicating that it considers the matter ripe for adjudication

The Seventh Circuit’s ruling in Hively predicts a period of significant uncertainty in the law regarding sexual orientation protections in employment, beginning with contradictory rulings in various district courts, potential circuit splits, and culminating with the need for legislative or Supreme Court action.  Employers should consult with counsel to evaluate their internal policies, practices and procedures with an eye towards sexual orientation claims.

If you have questions regarding this topic, please contact the authors or your Seyfarth attorney.

By Kylie Byron, Abigail Cahak, Mary Kay Klimesh, and Sam Schwartz-Fenwick

Seyfarth Synopsis: The Fourth Circuit in a case of first impression held that Title IX entitles transgender students to use the bathroom that matches their gender identity. Though that ruling only discusses Title IX, the Court’s language and reasoning may have implications for Title VII jurisprudence.

The Fourth Circuit has become the first Federal Circuit to weigh in on bathroom access for transgender students. In G.G. v. Gloucester County School Board, Case No. 15-2056 the court deferred to the U.S. Department of Education’s guidance that Title IX, which permits segregation of toilet, locker room, and shower facilities on the basis of “sex,” prohibits restriction of restrooms on the basis of “gender identity” as well as assigned sex. This ruling not only places the Circuit at odds with state “bathroom bills”, but also has potential implications for the Circuit’s interpretation of Title VII.

In G.G., plaintiff, a transgender boy, was prevented from using the men’s restroom at his high school due to a policy enacted by the school board specifically in response to his gender transition. G.G. sued for gender discrimination under Title IX and the Equal Protection Clause and requested a preliminary injunction allowing him to use the bathroom aligning with his gender identity.  The District Court for the Eastern District of Virginia dismissed G.G.’s Title IX claim holding that Title IX prohibits discrimination on the basis of sex and not on the basis of other concepts such as gender, gender identity, or sexual orientation.

The Fourth Circuit reversed the District Court’s dismissal of G.G.’s Title IX claim. The Court held that Auer deference required the Court to defer to the Department of Education’s interpretation of Title IX regulations, which indicated that transgender students could use hygienic facilities (such as restrooms) consistent with their gender identity regardless of the sex assigned at birth. The Court further found the Department of Education’s position regarding access to restrooms for transgender individuals consistent with the position of other federal agencies, including the Equal Employment Opportunity Commission.

G.G. is an important decision for employers. While the lawsuit arose under Title IX not Title VII, the reasoning of the Court readily applies to Title VII given the similar verbiage of the statutes and the regular practice of courts to look to case law under both statutes.  It is expected that Title VII litigants going forward will increasingly cite G.G, to bolster their argument that courts should defer to the EEOC’s position that Title VII’s prohibition on sex-discrimination encompasses gender identity. Indeed, as we have blogged previously, a case, ACLU v. McCrory, has already been filed challenging North Carolina’s “bathroom bill”, alleging harm under Titles IX and VII and under the Equal Protection Clause of the Constitution.

While the reasoning of G.G. is unlikely to be universally adopted by courts analyzing gender identity claims under Title VII or Title IX, the decision adds voice to the growing chorus of support for the argument that claims of gender identity discrimination are actionable under current Federal law. Employers should consult with counsel to evaluate their internal policies, practices and procedures with an eye toward gender identity claims.