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In huge EEOC win, appeals court finds discrimination on basis of transgender/transitioning status violates Title VII

By Kathleen Kapusta, J.D.

Discrimination against employees, either because of their failure to conform to sex stereotypes or because of their transgender and transitioning status, is illegal under Title VII, the Sixth Circuit declared, finding that here, the unrefuted facts showed a funeral home fired its transgender funeral director because she refused to abide by its stereotypical conception of her sex. Reversing the decision of the court below, the appeal court held that the EEOC was entitled to summary judgment as to its unlawful termination claim on behalf of the employee. Nor did the Religious Freedom Restoration Act provide the funeral home owner with any relief, as continuing to employ the funeral director would not, as a matter of law, substantially burden his religious exercise. Even if it did, enforcing Title VII here was the least restrictive means of furthering the compelling government interest in combating and eradicating sex discrimination (EEOC v. R.G. & G.R. Harris Funeral Homes, Inc., March 7, 2018, Moore, K.).

Clothes make the man. Hired in 2007, the employee, a transgender woman who was “assigned male at birth,” presented as a man until July 2013, when she informed her employer that she “decided to become the person that [her] mind already is.” She explained that she intended to have sex reassignment surgery and, as the first step, would live and work full-time as a woman for one year. She was fired approximately two weeks later because she would no longer dress like a man under the funeral home’s dress code, which required all public-facing male employees to wear suits and ties and its public-facing female employees to wear skirts and jackets. The funeral home provided all male employees who interacted with clients with free suits and ties but until October 2014—after the EEOC filed this suit—did not provide its female employees with any sort of clothing or clothing allowance.

Immutable God-given gift. The funeral home owner testified that he fired the employee because “he was no longer going to represent himself as a man. He wanted to dress as a woman.” He claimed he sincerely believed that the Bible teaches that a person’s sex “is an immutable God-given gift,” and that authorizing or paying for a male funeral director to wear the uniform for female funeral directors would render him complicit “in supporting the idea that sex is a changeable social construct rather than an immutable God-given gift.”

Sex stereotyping. The EEOC ultimately sued on the employee’s behalf. Denying the funeral home’s motion to dismiss, the district court found that transgender status is not a protected trait under Title VII, and therefore the EEOC could not sue for alleged discrimination against the employee based solely on her transgender and/or transitioning status. Nevertheless, it found the EEOC had adequately stated a claim for discrimination against the employee based on her failure to conform to the funeral home’s “sex- or gender-based preferences, expectations, or stereotypes.”

Burden on religious exercise. On subsequent cross-motions for summary judgment, the lower court determined that there was “direct evidence to support a claim of employment discrimination” against the employee on the basis of her sex, in violation of Title VII. It found, however, that the RFRA precluded the EEOC from enforcing Title VII against the funeral home, as doing so would substantially burden the employer’s religious exercise and the EEOC had failed to demonstrate that enforcing Title VII was the least restrictive way to achieve its presumably compelling interest in ensuring that the employee was not subject to gender stereotypes in the workplace (in terms of required clothing at the funeral home). The EEOC could have achieved its goals, said the court, by proposing that the funeral home impose a gender-neutral dress code. The lower court also found that it lacked jurisdiction over the EEOC’s discriminatory clothing allowance claim as it could not have been reasonably expected to grow out of the original charge.

Employee intervenes. After expressing concern that changes in the policy priorities of the U.S. government might prevent the EEOC from fully representing her interests in the case, the employee moved to intervene in the appeal. Granting her motion, the appeals court found her intervention would not prejudice the funeral home because she stated in her brief that she did not intend to raise new issues.

Discrimination on the basis of sex. While the district court correctly determined that the employee was fired because of her failure to conform to sex stereotypes in violation of Title VII, it erred in finding she could not alternatively pursue a claim that she was discriminated against on the basis of her transgender and transitioning status, said the appeals court, finding that discrimination on the basis of transgender and transitioning status is necessarily discrimination on the basis of sex. Citing to the U.S. Supreme Court’s decision in Price Waterhouse and its own decision in Smith v. City of Salem, the court found that the owner’s decision to fire the employee because she was “no longer going to represent himself as a man” and “wanted to dress as a woman” fell squarely within the ambit of sex-based discrimination that Price Waterhouse and Smith forbid.

Compliance with sex-specific dress code. While the funeral home argued that an employer does not engage in impermissible sex stereotyping when it requires its employees to conform to a sex-specific dress code, the court pointed out that the question before it was whether the funeral home could legally terminate the employee notwithstanding that she fully intended to comply with the company’s sex-specific dress code simply because she refused to conform to the funeral home’s notion of her sex. “When the Funeral Home’s actions are viewed in the proper context, no reasonable jury could believe that Stephens was not “target[ed]… for disparate treatment” and that “no sex stereotype factored into [the Funeral Home’s] employment decision,” the court observed.

Further, the funeral home misread binding precedent when it suggested that sex stereotyping violates Title VII only when “the employer’s sex stereotyping resulted in ‘disparate treatment of men and women.’” It is apparent from both Price Waterhouse and Smith, said the court, that an employer engages in unlawful discrimination even if it expects both biologically male and female employees to conform to certain notions of how each should behave.

In short, said the court, even if the funeral home’s dress code did not itself violate Title VII, it could not rely on its policy to combat the charge that it engaged in improper sex stereotyping when it fired the employee for wishing to appear or behave in a manner that contradicted the funeral home’s perception of how she should appear or behave based on her sex. Because the EEOC presented unrefuted evidence that unlawful sex stereotyping was at least a motivating factor in the funeral home’s actions (and because it rejected the funeral home’s affirmative defenses), the court granted summary judgment to the EEOC on its sex discrimination claim.

Discrimination on the basis of transgender/transitioning status. In addition, said the court, “it is analytically impossible to fire an employee based on that employee’s status as a transgender person without being motivated, at least in part, by the employee’s sex.” While the Seventh Circuit, in Hively v. Ivy Tech Cmty. Coll. of Ind., determined that Title VII prohibits discrimination on the basis of sexual orientation by asking whether the plaintiff, a self-described lesbian, would have been fired “if she had been a man married to a woman (or living with a woman, or dating a woman) and everything else had stayed the same,” the court here asked whether the employee would have been fired if she had been a woman who sought to comply with the women’s dress code. “The answer quite obviously is no. This, in and of itself, confirms that Stephens’s sex impermissibly affected” the owner’s decision to fire her, said the court.

Moreover, the court explained, Price Waterhouse makes it clear that Title VII requires “gender [to] be irrelevant to employment decisions,” and gender (or sex) is not being treated as irrelevant if the employee’s attempt or desire to change his or her sex leads to an adverse employment decision.

Sex-stereotyping invariably implicated. Further, discrimination against transgender persons necessarily implicates Title VII’s proscriptions against sex stereotyping as an “employer cannot discriminate on the basis of transgender status without imposing its stereotypical notions of how sexual organs and gender identity ought to align.” There is simply no way to disaggregate discrimination on the basis of transgender status from discrimination on the basis of gender nonconformity, said the court, finding “no reason to try.”

While the funeral home argued that the Congress enacting Title VII understood “sex” to refer only to a person’s “physiology and reproductive role,” and not a person’s “self-assigned ‘gender identity,’” the drafters’ failure to anticipate that Title VII would cover transgender status is of little interpretive value, the court observed, noting that “statutory prohibitions often go beyond the principal evil to cover reasonably comparable evils, and it is ultimately the provisions of our laws rather than the principal concerns of our legislators by which we are governed.”

Also rejected was the argument that both biologically male and biologically female persons may consider themselves transgender, such that transgender status is not unique to one biological sex. Citing to Zarda v. Altitude Express, Inc., the court here noted that “Taking individuals as the unit of analysis, the question is not whether discrimination is borne only by men or only by women or even by both men and women; instead, the question is whether an individual is discriminated against because of his or her sex.” For these and other reasons, the court held that the EEOC could pursue a claim under Title VII on the ground that the funeral home discriminated against the employee on the basis of her transgender status and transitioning identity—and that it should have had the opportunity, either through a motion for summary judgment or at trial, to establish that the funeral home violated Title VII’s prohibition on discrimination on the basis of sex by firing the employee because she was transgender and transitioning from male to female.

No ministerial exception. Rejecting the argument by certain amici that the employee fell within the ministerial exception to Title VII and was therefore not protected under the Act, the court found that the funeral home, which had virtually no “religious characteristics,” did not qualify for the exception. Nor was the employee a ministerial employee under Hosanna-Tabor: Her title—Funeral Director—conveyed a purely secular function; there was no evidence that she had any religious training; she was not an ambassador of any faith; and she did not perform important religious functions.

Applicability of RFRA. Turning to the applicability of the RFRA, the court noted that if it were to take the owner’s assertions regarding his religious beliefs as sincere, then it had to treat his running of the funeral home as a religious exercise. Thus, the question was whether the funeral home identified any way in which continuing to employ the employee would substantially burden his ability to serve mourners. While the funeral home argued that the employee would present a distraction that would obstruct the owner’s ability to serve grieving families, this, said the court, was premised on presumed biases and was wholly unsupported in the record. Further, the court held as a matter of law that a religious claimant cannot rely on customers’ presumed biases to establish a substantial burden under RFRA.

Tolerance is not support. As to the funeral home’s assertion that forcing it to violate the owner’s faith would significantly pressure him to leave the funeral industry and end his ministry to grieving people, the court found he was not being forced to choose between providing the employee with clothing or else leaving the business; rather this was a predicament of his own making. Nor was permitting the employee to wear attire that reflected a conception of gender that was at odds with the owner’s religious beliefs a substantial burden under RFRA. Presuming that the “line [the owner] draw[s]“—permitting the employee to represent herself as a woman would cause him to “violate God’s commands” because it would make him “directly involved in supporting the idea that sex is a changeable social construct rather than an immutable God-given gift,”—constitutes “an honest conviction,” the court held that as a matter of law, tolerating her understanding of her sex and gender identity was not tantamount to supporting it.

While the owner may sincerely believe that by retaining the employee he was supporting and endorsing her views regarding the mutability of sex, “bare compliance with Title VII—without actually assisting or facilitating [her] transition efforts—does not amount to an endorsement of [her] views,” the court stated. Because requiring the owner to comply with Title VII’s proscriptions on discrimination does not substantially burden his religious practice, the district court erred in granting summary judgment to the funeral home on the basis of its RFRA defense, said the appeals court, reversing the district court’s decision on this ground and granting summary judgment to the EEOC with respect to the funeral home’s RFRA defense.

Strict scrutiny. The court also granted summary judgment to the EEOC with regard to the funeral home’s RFRA defense on the alternate ground that the EEOC’s enforcement action in this case survives strict scrutiny. Declining to automatically hoist the owner’s religious interests above other compelling governmental concerns, the court found that the undisputed record demonstrated that the employee has been and would be harmed by the funeral home’s discriminatory practices, and the EEOC has a compelling interest in eradicating and remedying such discrimination. Further, the court found that enforcing Title VII was the least restrictive way to further the EEOC’s interest in eradicating from the workplace discrimination based on sex stereotypes.

Clothing-benefit discrimination claim. Finally, said the appeals court, the district court erred in granting summary judgment in favor of the funeral home on the EEOC’s discriminatory clothing-allowance claim. It was reasonable to expect, in light of the employee’s allegation that she was fired after she shared her intention to present and dress as a woman because the funeral home told her it did not believe the public would be accepting of her transition, that the EEOC would investigate the funeral home’s employee-appearance requirements and expectations, would learn about its sex-specific dress code, and would thereby uncover its seemingly discriminatory clothing-allowance policy.

Thus, the court reversed the grant of summary judgment to the funeral home and remanded to the district court with instructions to consider the merits of the EEOC’s claim.