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Student's transgender bathroom case may impact the workplace

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Legal guidance for employers on the issue of how they should deal with transgender employees in the workplace could emerge from a case now before the U.S. Supreme Court on transgender students’ bathroom use.

Complicating the issue is a joint Department of Justice and Department of Education memorandum issued Feb. 22 that revokes Obama administration federal guidelines on transgender students’ use of bathrooms.

In May 2016, the Obama administration had issued guidance that said as a condition of receiving federal funds under Title IX of the Education Amendments of 1972, educational institutions must not discriminate on the basis of a student’s gender identity.

Last week, the Trump administration withdrew and rescinded that guidance, stating the Obama administration guidance had “given rise to significant litigation regarding school restrooms and locker rooms.”

The letter states the departments believe “that, in this context there must be due regard for the primary role of the States and local school districts in establishing educational policy.” 

It says also its guidance documents do “not leave students without protections from discrimination, bullying, or harassment. All schools must ensure that all students, including LGBT students, are able to learn and thrive in a safe environment.”

Transgender students’ bathroom use will be considered by the U.S. Supreme Court, which has accepted for review Gloucester County School Board v. G.G., in a case filed by Gavin Grimm, a transgender male student against the Gloucester, Virginia-based school board over his use of the boys’ bathroom. Oral arguments in the case are scheduled for March 28.

While the Trump administration letter refers to Title IX, and the law protecting employees at the federal level is Title VII of the Civil Rights Act of 1964, both “contain the same language,” which the Obama administration has said applies to transgender individuals, said Sam Schwartz-Fenwick, a Chicago-based partner at Seyfarth Shaw L.L.P. Chicago. The Trump administration “might find it can’t maintain different views of the same phrase,” he said.

Mr. Schwartz-Fenwick said also is it is confusing that the letter said the transgender bathroom case is a states rights issue, while still stating schools should not discriminate against students “based on their LGBT status, so in the education context the litigation may very well follow, based on trying to unwrap that ambiguity.” 

Meanwhile, “the law has never been settled regarding whether federal law properly extends to claims of transgender discrimination,” he said. “The Obama administration said it was covered, but courts didn’t necessarily agree with that, so what employers have been having to do for quite a long time is live with this uncertainty and plan accordingly,” said Mr. Schwartz-Fenwick.

Many employers’ position, he said, is, “We don’t want any risk of a lawsuit, so we’re going to create inclusive policies.” Many employees also “realize it’s just a best business practice to be inclusive, because it helps with recruiting and retentions and also with just having a reputation as a good corporate citizen.”

But the rescission does not “really change anything” for employers, he said. “It just underscores the uncertainty there, which isn’t going to be clarified until the Supreme Court weighs in” on the issue, or Congress promulgates a new law. “Until that happens, there’s going to uncertainty and employers are going to continue to have to wade through that,” he said.

“Sexual orientation and transgender rights in employment are certainly not going to be advanced in this administration.  I think they’ll be rolled back,” said Richard B. Cohen, a partner with Fisher/Broyles L.L.P. in New York.

“Right now, the administration is sending very clear signals that transgender rights, either in the workplace or publicly-funded universities and schools” are being re-evaluated, said Eric B. Meyer, a partner with Dilworth Paxson L.L.P. in Philadelphia.

“It looks like there’s going to be, if not a 180-degree turn, at least a different approach than was taken in the Obama Administration,” he said.

“Even though this is not an employment issue, I’d take it as a sign that the Trump administration may rescind interpretations that were issued by the (Equal Employment Opportunity Commission) and (the Occupational Safety and Health Administration) that employers are required to let people use the restroom that corresponds to their gender identity, as they did in this case, and just leave that to the individual states to decide,” said Robin E. Shea, a partner at Constangy, Brooks & Smith L.L.P. in Winston-Salem, North Carolina.

“What that means, as a practical matter, is that assuming there’s no state law in place, and assuming the Trump Administration does in the employment context what it just did in the educational context, employers could go back to requiring transgender employees to use a single sex, a single-user rest room if that’s what they wanted to do, if that’s what they thought was best, and it was too expensive to remodel their restroom arrangement,” she said.

She added, however, “I don’t think rescinding discrimination protections for transgender individuals is high” on the Trump Administration’s agenda.

Anthony B. Haller, a partner with Blank Rome L.L.P. in Philadelphia, said he believes the issue’s outcome will be influenced by the Supreme Court’s ruling in the Gloucester case. Whichever way the court rules on the issue “would have that ripple effect on the interpretation of Title VII,” he said. 

The issue also has ramifications as far as the related issue of discrimination based on sexual orientation is concerned, experts say. How that issue develops “remains to be seen,” said Lisa A. Linsky, a partner with McDermott, Will & Emery L.L.P. in New York.

“President Trump has said publicly that marriage equality is a done deal, and that issue will not be touched, but there are many other social issues and civil rights that are at stake for LGBT Americans.”