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Appeals court ruling seen strengthening cases for transgender employees

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A ruling by a federal appeals court that reinstated a sex discrimination case filed by a transgender auto mechanic is likely to be influential with other courts, according to legal experts.

Jennifer Chavez, a former auto mechanic at Austell, Georgia-based Credit Nation Auto Sales L.L.C., told her employer of her gender transition Oct. 28, 2009, and was fired Jan. 11, 2010, according to the Jan. 14 ruling by the 11th U.S. Circuit Court of Appeals in Atlanta in Jennifer Chavez v. Credit Nation Auto Sales L.L.C.

Ms. Chavez sued in U.S. District Court in Atlanta in January 2013, charging sex discrimination. The District Court granted Credit Nation summary judgment, dismissing the lawsuit, and Ms. Chavez appealed.

Credit Nation's reason for firing Ms. Chavez, because she had slept for 40 minutes in a customer's vehicle while on the clock, was “true and legitimate,” said a unanimous three-judge appeals court panel in its Jan. 14 ruling.

However, Ms. Chavez presented circumstantial evidence to show “discriminatory animus” was at least a motivating factor in her termination, according to the unpublished ruling.

For instance, said the ruling, though Ms. Chavez changed into a uniform before her shift started and out of it before leaving work, the owner asked her not to wear a dress back and forth to work, saying it would be “disruptive.”

“Chavez has also offered evidence suggesting Credit Nation subjected her to heightened scrutiny after learning about her gender transition plan and was simply looking for a legitimate work-related reason to terminate her,” the ruling said in reinstating the case.

It is a significant decision in showing some courts' increasing willingness to see Title VII of the Civil Rights Act of 1964 expansively to cover transgender discrimination claims, said Sam Schwartz-Fenwick, a partner with Seyfarth Shaw L.L.P. in Chicago.

Mr. Schwartz-Fenwick said the ruling is the latest “in a long line of cases in which some courts have held that Title VII encompasses claims of transgender discrimination.” Others, however, have held it does not because it is not explicitly stated in the law, he said.

Still, Lisa A. Linsky, a partner with McDermott, Will & Emery L.L.P. in New York, said the ruling is likely to be influential “because of the evidentiary framework that the 11th Circuit sets out.”

Ms. Linsky said though there was a legitimate reason to terminate Ms. Chavez — her sleeping on the job — the court found enough circumstantial evidence to show there may also have been discriminatory intent and a jury should decide “how much credibility to give this circumstantial evidence.”

Both attorneys said a significant ruling on the issue of transgender discrimination is the U.S. Supreme Court's 1989 decision in Price Waterhouse vs. Hopkins, in which it held a plaintiff can rely on gender-stereotyping evidence to show that discrimination occurred. That case did not involve a transgender employee, but a woman viewed as being too masculine.

The Equal Employment Opportunity Commission has also held that Title VII encompasses transgender discrimination.