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LGBT Employees And The Changing Legal Landscape

Lori WaxmanThe laws affecting lesbian, gay, bisexual and transgender (“LGBT”) individuals in the workplace are constantly changing. There have been significant developments in this area of the law recently at both the state and federal levels - up to and including the date of the publication of this Newsletter.1 The highlights are described below.

EPS' RealSolutions® Podcasts presents an interview with this month’s author, Lori Waxman. To learn more about Lori’s experience, listen to our podcast.


Title VII of the Civil Rights Act of 1964 (“Title VII”) prohibits discrimination based on race, color, religion, national origin and “sex”. The question is, though, what is “based on sex”? Title VII does not explicitly recognize sexual orientation or gender identity as protected characteristics.3 The Employment Non-Discrimination Act (“ENDA”)”, the proposed federal legislation to amend Title VII, would prohibit employers from discriminating against employees on the basis of sexual orientation or gender identity. However, despite the introduction of this legislation in almost every congress since 1994, it has never passed.

While Title VII has not been expanded to include sexual orientation or gender identity as protected characteristics, the Equal Employment Opportunity Commission (“EEOC”) and other federal agencies have extended Title VII's reach to include one or both of these categories, and some federal courts have done the same.


In 2012, the EEOC held that discrimination against an individual because they are transgender is discrimination "based on sex" in violation of Title VII.4 This was the first time that the EEOC provided any guidance on the extent to which Title VII’s sex discrimination prohibition applied to transgender employees, and this decisionalso paved the way for transgender employees to file sex discrimination complaints against public or private employers with the EEOC. While the EEOC takes the position that Title VII always covers discrimination based on gender identity, it has not reached the same conclusion regarding claims of sexual orientation discrimination, and decides such claims on a case-by-case basis. The EEOC has found that claims of sexual orientation discrimination are “based on sex” where there are facts showing that an employer is motivated by attitudes about sex stereotypes, or where the evidence reveals that an employer treats an employee differently because of what the employer considers to be gender non-conforming behavior.5

In 2014, the EEOC filed two lawsuits involving sex discrimination against transgender individuals who were transitioning from male to female. The underlying theory of both cases is that discrimination against transgender individuals is a form of sex discrimination prohibited by Title VII. One lawsuit was filed in a federal district court Michigan and involved a funeral home - this case is still pending.The other lawsuit, filed in a federal district court in Florida against a medical clinic, settled on April 13, 2015 for $150,000 - and for the employer’s agreement to implement a new gender discrimination policy and to provide training to its management and employees regarding transgender/gender stereotype discrimination.7

It is noteworthy that in the EEOC’s Strategic Enforcement Plan for fiscal years 2013–2016, the EEOC has identified as an enforcement priority the “coverage of lesbian, gay, bisexual and transgender individuals under Title VII’s sex discrimination provisions.” Further, in 2015, reflecting an update in its policy, the EEOC issued a new internal memorandum in which it provides the following instructions to its field offices:

“Complaints of discrimination on the basis of transgender status or gender-identity related discrimination should be accepted under Title VII and investigated as claims of sex discrimination. . . . Individuals who believe they have been discriminated against because of their sexual orientation should be counseled that they have a right to file a charge with the EEOC.”

There is no doubt that the EEOC is committed to enforcing the rights of transgender employees.

US Department of Labor (DOL)

On April 8, 2015, the DOL’s Office of Federal Contract Compliance Programs (“OFCCP”) clarified that discriminating on the basis of sex includes discrimination on the bases of sexual orientation, gender identity and transgender status. This final rule implements Executive Order 13672, signed by President Obama on July 21, 2014, which prohibits federal contractors and subcontractors from discriminating on the basis of sexual orientation or gender identity (in addition to other protected classes). Accordingly, federal contractors and subcontractors are prohibited from discriminating on the basis of sexual orientation and gender identity.

Executive Order 13672 also prohibits discrimination in the federal workforce on the basis of gender identity – amending Executive Order 13087, signed by President Clinton in 1998, which prohibited discrimination against federal employees on the basis of sexual orientation (Executive Order 13672 added “gender identity”).

Wage and Hour Division/FMLA

On February 25, 2015, the DOL issued a final rule revising the definition of “spouse” under the Family and Medical Leave Act (“FMLA”) so that eligible employees in legal same-sex and common law marriages can take FMLA leave to care for their spouse or family member, regardless of where they live. The DOL proposed the change in light of the U.S. Supreme Court's June 2013 decision in United States v. Windsor,8which found that Section 3 of the Defense of Marriage Act (DOMA), limiting the definitions of "marriage" and "spouse" to opposite-sex marriages and spouses, was unconstitutional.

The final rule was set to take effect on March 27, 2015. However, on March 18, 2015, the Attorney General of Texas filed a lawsuit against the DOL in a federal district court in Texasregarding the newly revised definition of “spouse” – and the states of Nebraska, Arkansas and Louisiana joined in the lawsuit.On March 26, 2015, the judge granted a preliminary injunction, sought by the states of Texas, Nebraska, Arkansas and Louisiana, ordering a stay of the application of the DOL’s final rule redefining the term “spouse” under FMLA. Texas, Louisiana, Arkansas and Nebraska do not recognize same-sex marriages and define marriage as solely between a man and a woman. These states argue that the DOL exceeded its authority by promulgating the rule, and that it violated state law as well as Section 2 of DOMA, known as the Full Faith and Credit Statute, which provides that states are not required to recognize legal same-sex marriages from other states.

On March 31, 2015, the DOL filed papers with the court requesting that it dissolve the preliminary injunction. A hearing was held on April 10, 2015 and the Texas court declined the DOL’s request. It is not clear whether the decision to uphold the injunction applies to employers outside of the plaintiff states, or whether it applies to private employers in those states.

The United States Department of Justice (DOJ)

In December 2014, the DOJ announced that it will take the position in litigation that Title VII’s prohibition of sex discrimination extends to discrimination based on gender identity, which includes transgender status. As a result, the DOJ and its attorneys are now barred from arguing in court that transgender employees are not a protected class under Title VII. While the DOJ lacks the authority to file suit against private employers alleging gender identity discrimination, this is a progressive stance.

United States Office of Special Counsel (OSC)

The OSC is an independent federal investigative and prosecutorial agency that receives and investigates allegations of prohibited personnel practices (“PPPs”) under the Civil Service Reform Act of 1978 (“CSRA”).Many of the PPPs described in the CSRA are also prohibited by other laws – and the CSRA lists certain PPPs, including discrimination prohibited by Title VII.

On October 14, 2014 the OSC announced the release of a PPP report concerning the OSC's finding that the Army engaged in gender identity discrimination against a department specialist who was transitioning from male to female, in violation of the Civil Service Act. The OSC now takes the position that allegations of discrimination based on sexual orientation and gender identity may constitute PPPs and therefore will accept and investigate complaints of sexual orientation and gender identity discrimination filed by federal employees. 

Federal Case Law

Interestingly, a leading case in this area of the law is one that involved sex-stereotyping and gender nonconformity – but it did not involve issues of gender Identity or sexual orientation. In Price Waterhouse v Hopkins,10 a 1989 Supreme Court case, the plaintiff claimed that she was not promoted to partnership for two years in a row based on her gender nonconformity because she was not “feminine enough”. The U.S. Supreme Court found that she stated a claim because gender stereotyping is actionable as sex discrimination. This case has been relied upon by courts and the EEOC in cases involving both gender identity and sexual orientation discrimination.

Of the federal circuit courts that have decided cases on the issue, there is currently a split as to whether Title VII(or laws with similar language banning discrimination because of sex) prohibits discrimination based on gender identity: the Sixth, Ninth and Eleventh Circuits have upheld such claims, whereas the Seventh and Tenth Circuits have rejected them.11 There will likely be many more cases, especially with the EEOC’s Strategic Enforcement Plan and position on gender identity discrimination.

Federal agencies can have a huge impact on the courts in this area, as evidenced by a case filed against Saks Fifth Avenue in Texas.12 In the 2014 lawsuit, a former transgender employee claimed that she was harassed and fired over her transgender identity. Initially, Sak’s response to the lawsuit was to file a motion to dismiss, asserting that transgender discrimination was not protected under federal law. However, in January 2015, the DOJ filed a “Statement of Interest” in connection with the Texas lawsuit, in which it stated its opinion thatdiscrimination against an individual based on gender identity is discrimination because of sex. In addition, in January 2015, while defending against the lawsuit in Texas, New York’s attorney general sent a letter to Saks in New York inquiring about Sak’s anti-discrimination policies in New York and the processes for employees to file harassment or discrimination complains as well as the trainin3 materials used to educate employees on preventing workplace harassment. Importantly, the letter noted that both the DOJ and the EEOC have recognized that transgender employees are protected from harassment and discrimination in the workplace.13Saks eventually withdrew its defense and stated that it would defend the case on the merits, and in March 2015 the parties settled the case.

What’s Next?

While many federal agencies and courts have spoken on the issue of discrimination against individuals based on gender identity and/or sexual orientation, there remains much uncertainty. Given the trend towards expanding the reach of Title VII, along with the many state and local laws prohibiting discrimination against LGBT individuals in the workplace, it may be a good idea for employers to have policies and handbooks reviewed and updated (if necessary) to reflect a broad interpretation of Title VII as it relates to discrimination based on sexual orientation and gender identity. Equally as important, employers should make sure that their managers and employees receive training on these policies and that all employees are aware of the processes to file harassment or discrimination complaints, and of their roles in maintaining a respectful workplace.

While there have been developments at both the federal and state levels, this article will focus on changes in the federal laws.

42 U.S.C. § 2000e-2 (a) etseq.

3 In contrast, twenty-two states and the District of Columbia (DC) have laws that prohibit employment discrimination based on sexual orientation, and 19 states and DC prohibit discrimination based on gender identity. 

4 Macy v. Holder, Appeal No. 0120120821 (EEOC Apr. 20, 2012).

See Baker v. Social Security Administration, EEOC Appeal No. 0120110008, 2013 WL 1182258 (E.E.O.C.) (Jan. 11, 2013); Culp v. Dep't of Homeland Security, EEOC Appeal No. 0720130012, 2013 WL 2146756 (E.E.O.C.) (May 7, 2013).

6 EEOC v. R.G. & G.R. Harris Funeral Homes, Inc. (E.D. Mich., Civ. No. 2:14-cv-13710).

7 EEOC v. Lakeland Eye Clinic, P.A. (M.D. Fla., Civ. No. 8:14-cv-2421-T35).

133 S. Ct. 2675 (2013).

See Texas, et al. v. United States,No. 7:15-CV-00056-O, 2015 WL 1378752 (Mar. 26, 2015).

10 490 U.S. 228 (1989). This case was relied on by the EEOC in Macy v. Holder. See discussion above.

11 See Glenn v. Brumby, 663 F.3d 1312 (11th Cir. 2011)Barnes v. City of Cincinnati, 401 F.3d 729 (6th Cir. 2005)Smith v. City of Salem, 378 F.3d 566 (6th Cir. 2004)Schwenk v. Hartford, 204 F.3d 1187 (9th Cir. 2000).See also Etsitty v. Utah Transit Authority, 502 F.3d 1215 (10th Cir. 2007)Ulane v. Eastern Airlines, Inc., 742 F.2d 1081 (7th Cir. 1984)).

12 Jamal v. Saks & Company, CASE NO.: 4:14-CV-02782 (S.D. Texas 2014).

13 The letter also stated that the New York City human rights law prohibits sex discrimination based on gender identity.