Federal agencies diverge on transgender protections

Disagreement within the Trump administration as to whether federal law protects transgendered workers from discrimination is a moot point for many businesses because they already generally extend this protection, say experts.

Furthermore, 20 states and hundreds of county and other local laws already require this protection. Experts say these laws will remain in place even if the U.S. Supreme Court eventually rules otherwise, as some expect, say observers, who also note appellate courts are divided on this issue.

Experts advise companies that already offer this protection to continue to do so.

“It’s sort of uncharted territory, to an extent, since we have federal agencies taking generally diametrically opposed stands on the same issue,” said Evan Gibbs, an associate with Troutman Sanders LLP in Atlanta, referring to conflicting policies among the Department of Justice, the Department of Health and Human Services and the Equal Employment Opportunity Commission.

However, “Most employers have kind of moved past this issue,” said J. Randall Coffey, a partner with Fisher Phillips LLP in Kansas City, Missouri.

Title VII of the Civil Rights Act of 1964 “does not apply to discrimination against an individual based on his or her gender identity,” said the U.S. Department of Justice in a brief submitted to the Supreme Court last week, in which it urged the court not to grant certiorari to R.G. & G.R. Harris Funeral Homes Inc. v. Equal Employment Opportunity Commission.

That case involves a transgender worker who was fired when she told her funeral home employer she was undergoing a gender transition to male from female. The 6th U.S. Circuit Court of Appeals in Cincinnati ruled in her favor in March.

Among other Trump administration moves in this area, last week the New York Times reported the Department of Health and Human Services is considering narrowly defining gender under Title IX of the Education Amendments Act of 1972, the federal civil rights law that bans gender discrimination in education, by saying gender orientation is immutably determined at birth.

The department said in a statement in response to a request for comment that it does not comment on the status of deliberations or the department’s focus, but that an Obama administration regulation on this issue was “overbroad and inconsistent” with Title IX’s text.

On Monday, the Washington-based Human Rights Commission, an LGBT civil rights organization, said in a statement it had sent a Freedom of Information Act request to the department for all records related to redefining the word gender to exclude transgender people from civil rights protections.

Meanwhile, the EEOC continues to maintain that transgender workers are protected under federal law, although two nominated Republican commissioners have not yet been confirmed. An EEOC spokesman could not be reached for comment.

The “complete lack of uniformity at the federal level among the courts and among the executive branch regarding what the scope of rights that are protected by Title VII” is an area of continuing uncertainty for employers, said Mr. Coffey.

This patchwork “leaves everyone in a state of unrest and lack of clarity until the Supreme Court takes cert on one of these cases” that address the issue, said Nonnie L. Shivers, a shareholder with Ogletree, Deakins, Nash, Smoak & Stewart P.C. in Phoenix.

Meanwhile, “It’s kind of hard to know how the new majority of the Supreme Court” will address this issue, said Sam Schwartz-Fenwick, a partner with Seyfarth Shaw LLP in Chicago.

Others believe, based on new Associate Justice Brett Kavanaugh’s previous judicial rulings, that the court will issue a narrow ruling stating Title VII does not protect sexual orientation.

However, considering the EEOC’s position and state and other local laws on this issue, this should not impact employers’ policies, say experts.

“The EEOC is going to take the position that Title VII covers both discrimination based on sex orientation and gender identity and expression, so they will want to ensure they don’t run afoul of the EEOC’s view of the law,” said Mark T. Phillis, a shareholder with Littler Mendelson P.C. in Pittsburgh.

“Most employers, particularly those that do business on the coasts or do business in multiple jurisdictions, are probably subject to state or local laws that provide protection anyway, so they have to comply with those legal requirements in any event,” Mr. Coffey said.

“I don’t think employers will change their policies at all,” he added. “There’s an enormous cultural incentive to be friendly to the LGBT community.”

“Most employers of any size have someone who is gay or lesbian or transgendered who works for them. If they are good employees, most employers want to keep them,” Mr. Coffey said.

Meanwhile, depending on the November elections’ outcome, Congress may act to require discrimination protections based on sexual and gender orientation in federal law.

“My feeling is it’s going to be an uphill battle for (the Trump administration) to try to do this change administratively through these agencies,” said Paul E. Starkman, a member of law firm Clark Hill PLC in Chicago.

Any attempt to do so “will be met with some resistance from the courts, although given the Trump administration’s success in changing the judiciary and installing justices that are nominated by the Trump administration, that may make that resistance a little less forceful.”

Legislation would be the “cleanest and most meaningful way’’ to change the law, said Ms. Shivers.

Meanwhile, Mr. Phillis said that before HHS issues guidance on this, there will be a notice and comment period, “and depending on how it’s structured, it may be something employers may want to comment on and help shape the discussion.”