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Appellate rulings push transgender fight closer to high court

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Litigation over allegations of workplace discrimination due to sexual orientation may have taken a step closer to U.S. Supreme Court review after an appellate court ruled for a worker in a transgender rights case earlier this month.

The federal appeals court ruling that a person’s transgender status is protected from discrimination under Title VII of the Civil Rights Act of 1964 is the third recent appellate court ruling on a related issue and increases the momentum toward a review by the high court on gender conformity under the statute, experts say.

The March 7 ruling by the 6th U.S. Circuit Court of Appeals in Cincinnati in Equal Employment Opportunity Commission v. R.G. & G.R. Harris Funeral Homes Inc. involved Aimee Stephens, who was fired about two weeks after she informed her employer and co-workers at her Detroit-based funeral home that she was undergoing a gender transition to female from male.

In comparable rulings, in February, the 2nd U.S. Circuit Court of Appeals held in an en banc ruling in Melissa Zarda et al. v. Altitude Express that Title VII protects against discrimination based on sexual orientation, in a case filed by a gay skydiver who was fired by his employer.

In April 2017, the 7th U.S. Circuit Court of Appeals in Chicago held in Kimberly Hively v. Ivy Tech Community College that sexual orientation is protected under Title VII, in a case filed by a lesbian college instructor.

On the other hand, the 11th U.S. Circuit Court of Appeals in Atlanta held in March 2017 in Jameka K. Evans v. Georgia Regional Hospital, in a case filed by a lesbian security guard, that Title VII does not protect employees from discrimination on the basis of sexual orientation. The U.S. Supreme Court in December declined to hear that case.

The ruling by a unanimous three-judge panel in the latest 6th Circuit case said, “Discrimination on the basis of transgender and transitioning status is necessarily discrimination on the basis of sex, and thus the EEOC 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.”

In overturning the lower court’s ruling in the case, the appeals court cited the Religious Freedom Restoration Act, which “prohibits the government from enforcing a religiously neutral law against an individual if that law substantially burdens the individual’s religious exercise and is not the least restrictive way to further compelling government interest.”

“We hold that the Funeral Home does not qualify for the ministerial exception to Title VII; the Funeral Home’s religious exercise would not be substantially burdened by continuing to employ Stephens without discriminating against her on the basis of sex stereotypes; the EEOC has established that it has a compelling interest in ensuring the Funeral Home complies with Title VII; and the enforcement of Title VII is necessarily the least restrictive way to achieve that compelling interest,” said the ruling.

The latest ruling is one of a series “in a book that’s being written” as to whether the law “should be construed broadly and evolve over time, as opposed to being read strictly” as it was enacted in 1964, said Gerald L. Maatman Jr., a partner with Seyfarth Shaw L.L.P. in Chicago.

Michelle E. Phillips, a principal with Jackson Lewis P.C. in White Plains, New York, said, “The ruling is significant in that it conforms with the EEOC’s position in their strategic enforcement plan.”

The initial District Court ruling in the case was disappointing “because there was clear evidence that the funeral home failed to engage in any attempt to work with the transgendered employee,” she said.

Ms. Phillips said 19 states and the District of Columbia, which do not include Michigan, where the funeral home is based, have approved legislation protecting gender identity discrimination.

The ruling “makes it more likely the Supreme Court will actually decide this issue sometime in the near future,” because “you have a number of circuits now issuing rulings” on the issue of Title VII. “These are all very important decisions for protecting LGBT rights,” said Ms. Phillips.

Eric B. Meyer, a partner with FisherBroyles L.L.P. in Cherry Hill, New Jersey, said, “This was a limited analysis of whether transgender discrimination violates Title VII, but it certainly goes right in the same column as the wins in Hively and Zarda, and I think we’re one step closer to getting the Surpeme Court in on this issue of whether LGBT rights are covered under Title VII.”

He said because the 6th Circuit case in particular involves not only Title VII, but the Religious Freedom Restoration Act, “There is an added dynamic here would could push this to the Supreme Court.”

He said, “The 11th Circuit notwithstanding, the trend right now is, courts are much more receptive to holding that sexual orientation discrimination violates Title VII. The EEOC started the trend, the circuits picked it up and this is a boulder that’s running downhill.”

Samuel N. Lillard, a partner with Fisher Phillips L.L.P. in Columbus, Ohio, said he believes the latest ruling adds momentum toward the Supreme Court considering Title VII’s provisions. “The Supreme Court has been heading in that direction anyway,” he said.

He pointed to the Supreme Court’s 1989 ruling in Price Waterhouse v. Hopkins, which held gender nonconformity claims were covered under Title VII.

When Title VII was written legislators considered only biological sex, he said. “The argument has been in some of these transgendered cases it’s not about sex...it’s about our preference,” Mr. Lillard said.

Mr. Meyer said, “Folks who are discriminated against based on sexual orientation, I would think, are going to be inclined to tack on federal claims to any states or local rights’” claims they charge in litigation.

“I think we’ll see many more of these lawsuits not just pursued, but appealed in other circuits around the country,” said Nathaniel Glasser, a member of law firm Epstein Becker Green P.C. in Washington.

He said now that “two courts have seriously considered and adopted the rationale of the EEOC” in concluding Title VII protects sexual orientation and gender identity discrimination, if employers “weren’t already paying attention to what the EEOC has been saying, they should look carefully now in those areas and also at the EEOC’s other enforcement priorities to ensure that their own policies and practice are in line with those priorities.”