13 March 2018

Sixth Circuit Rules that Transgender Individuals are Protected Under Title VII

Late last week, the Sixth Circuit Court of Appeals issued a ground breaking decision which impacts all employers in Michigan, Ohio, Tennessee and Kentucky.  The Court held that “discrimination on the basis of transgender and transitioning status violates Title VII.”  In reaching that conclusion, the Court rejected an employer’s defense under the Religious Freedom Restoration Act.

This means that employers in the Sixth Circuit must not take any adverse employment actions against employees because they are transgender or are transitioning from one sex to another.  Employers must also eliminate any policies, work rules, or practices that discriminate against employees based on their transgender status.

The Sixth Circuit’s Decision

The Sixth Circuit laid out its new rule in Stephens v. R.G. & G.R. Harris Funeral Homes Inc.  In that decision, the Court held that a funeral home in Detroit violated Title VII’s anti-discrimination laws when it fired its funeral director, Aimee Stephens (formerly known as Anthony Stephens) after she told its owner that she planned to transition from male to female and would be representing herself as a woman while at work.

The EEOC brought suit on Stephens’s behalf and alleged that she was terminated in violation of Title VII on the basis of her transgender or transitioning status and based on her refusal to conform to sex-based stereotypes.  Title VII prohibits employers from discriminating against employees on the basis of several characteristics, including sex and sex stereotyping.  But whether “sex” includes sexual orientation or transgender status has been the subject of much recent litigation.

The district court held that transgender status was not a protected status under Title VII, but that the EEOC had stated a claim for discrimination based upon failure to conform to gender or sex stereotypes.  Nevertheless, the lower court dismissed the EEOC’s claim finding that the funeral home’s actions were protected by the Religious Freedom Restoration Act.

The Sixth Circuit overruled the lower court.  Although the Sixth Circuit agreed that sex stereotyping was unlawful, it ruled that the lower court erred in failing to recognize transgender status as protected by Title VII.  It explained:

“Discrimination on the basis of transgender and transitioning status is necessarily discrimination on the basis of sex, and thus the [Equal Employment Opportunity Commission] should have had the opportunity to prove that the Funeral Home violated Title VII by firing Stephens because she is transgender and transitioning from male to female.”

The Sixth Circuit also rejected the funeral home’s argument that being required to employ Stephens while she dresses as a woman would constitute an unjustified substantial burden on a sincerely held religious belief in violation of the Religious Freedom Restoration Act.  The Sixth Circuit ruled that the funeral home failed to show that its religious exercise was substantially burdened and that, even if it had met this requirement, Title VII was still the least restrictive means of furthering the government’s compelling interest in eradicating workplace discrimination.

What’s Next?

This ground breaking decision may be appealed further.  But in the meantime, employers must be aware that a general religious objection to an employee’s transgender status will not serve as a defense and that any actions, rules, policies or practices which discriminate against employees based on their transgender status will be unlawful.

Finally, although this case does not address whether sexual orientation is protected by Title VII, its rationale suggests that the Sixth Circuit may soon agree with other federal courts which have extended legal protection to an individual’s sexual orientation.

Please contact the authors or your Miller Johnson Employment Section attorney with any questions about how this ruling may impact your organization.