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A growing number of U.S. employers are expanding their nondiscrimination policies to include lesbian, gay, bisexual and transgender employees, even when they are not legally compelled to do so.
Employers are responding as the federal government has taken a stand defending LGBT employees, even though federal laws do not explicitly prohibit employment discrimination on the basis of sexual orientation or gender identity.
Late last year, the U.S. Labor Department issued a final rule prohibiting federal contractors from discriminating against employees and job applicants based on their sexual orientation or gender identity.
The final rule applies to all employers holding government contracts valued at $10,000 or more on or after April 15, 2015.
Additionally, the U.S. Equal Employment Opportunity Commission in recent years repeatedly has declared its intent to use existing gender nondiscrimination rules under Title VII of the Civil Rights Act to sue employers engaging in — or failing to prevent — workplace bias and harassment toward LGBT employees and potential hires.
In particular, experts say the federal government devoted considerable energy in 2014 to establishing employment protections for transgender workers under existing federal laws. Those efforts culminated in an Dec. 18 statement from the U.S. Department of Justice formally permitting federal regulators and prosecutors to pursue litigation against public employers — but not private employers — for gender identity discrimination claims under Title VII.
“This will help to foster fair and consistent treatment for all claimants,” U.S. Attorney General Eric Holder said in the statement. ”It reaffirms the Justice Department's commitment to protecting the civil rights of all Americans.”
For its part, the EEOC took arguably its most aggressive action so far toward achieving that end by filing federal lawsuits last September against private companies in Michigan and Florida on behalf of employees who allege they were fired after informing their employer they planned to transition from one gender to the other.
“The cases involving transgender employees in particular are something I've been watching, where we're starting to see the extension of sex discrimination protection to transgender individuals,” said Todd Solomon, a Chicago-based partner at McDermott Will & Emery L.L.P. “That's kind of the new frontier in terms of employment discrimination. Not that the issue of equal employment rights for gays and lesbians is exactly settled, but I'd say they're more stable today than they have been, so a lot of the focus lately has been on transgender rights in the workplace.”
While the EEOC's lawsuits, as well as individual federal suits against private employers, should offer some encouragement to transgender employees seeking nationwide protection from workplace discrimination, experts say it could be years before the U.S. Supreme Court renders a definitive ruling on the issue or Congress passes legislation barring discrimination based on sexual orientation and gender identity.
Still, experts said many employers aren't waiting for the courts or Congress to extend nondiscrimination protections to transgender workers.
Two-thirds of Fortune 500 employers currently include explicit gender identity protections in their corporate nondiscrimination policies, according to Washington-based nonprofit the Human Rights Campaign.
“Regardless of what the law requires, it's really become an employment best practice to have these kinds of policies on the books,” said Sarah Warbelow, the Human Rights Campaign's Washington-based legal director. “It helps create a more settled and stable work environment in which your people can focus on getting their jobs done without having to worry that someone is going to find out who they are and who they love. That's just good for business.”
However, experts say that while some employer clients are philosophically receptive to the idea of adding gender identity-specific provisions to their nondiscrimination policies, they have been reluctant to do so.
“Gender identity is a newer issue for a lot of employers,” said Laura Maechtlen, a partner at Seyfarth Shaw L.L.P. in San Francisco. “What we're finding is that a lot of employers want to do the right thing, but they feel like they don't understand the specific issues facing that community, so they're scared to address it because they don't want to make a mistake.”
To avoid complications — including potential discrimination claims under state and/or federal laws — Ms. Maechtlen said she has advised clients to establish clear guidelines for supervisors and human resources professionals “outlining how they should respond and what their responsibilities are in the event that an employee comes forward and announces that they plan to transition genders.”
“Some of the trickier situations we've seen come up involve companies where there aren't a lot of resources in place for handing it, and it just creates a lot of frustration in the moment,” Ms. Maechtlen said.
“It makes it a lot easier to have thought through that process in advance.”
Companies face more stringent enforcement of laws that target corporate wrongdoing, ranging from the Dodd-Frank Wall Street Reform and Consumer Protection Act to the Foreign Corrupt Practices Act, as well as new regulatory tools — including one dubbed RoboCop.