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Transgender applicant failed to show Phillips 66 discriminated in revoking job offer

By Kathleen Kapusta, J.D.

“It took an act of Congress to prohibit race and sex discrimination in private employment nationwide,” wrote Judge Ho; “So too it will take an act of Congress if the people wish to prohibit transgender and sexual orientation discrimination across the country as well.”

After clarifying that Blum v. Gulf Oil Corp., its 1979 decision holding that Title VII does not prohibit discrimination on the basis of sexual orientation, “remains binding precedent in this circuit to this day,” the Fifth Circuit, affirming summary judgment to Phillips 66, found a transgender employee’s Title VII sex discrimination claim failed for two reasons—separate and apart from its holding in Blum. She failed to establish a prima facie case of discrimination as there was no evidence that any non-transgender applicants were treated better, and she failed to show that the nondiscriminatory reason offered by Phillips 66 in rescinding her job offer—discrepancies uncovered in a background check—was pretextual. Judge Higginbotham wrote a short concurring opinion and Judge Ho—author of the majority opinion—also wrote separately to explain why the court’s precedent was correct as a matter of legal interpretation, noting that “If the first forty years of uniform circuit precedent nationwide somehow got the original understanding of Title VII wrong, no one has explained how” (Wittmer v. Phillips 66 Co., February 6, 2019, Ho, J.).

The transgender woman applied for a position with Phillips 66, and during the course of four interviews, including one in person, they discussed her current employment with Agrium and on-going projects that would require significant travel, which she stated was the reason she was looking for a new job. She was offered the position on August 10, contingent on passing a background check. When the background check uncovered a discrepancy—Agrium had terminated her in July—Phillips 66’s HR manager informed the applicant, who did not think “it was that big of a deal.”

Rescinded. On September 10, the applicant sent an unsolicited email to the HR manager, accusing the company of transgender discrimination. Four days later, the company formally rescinded her job offer.

Lower court proceedings. She then sued under Title VII for discrimination on the basis of transgender status. The district court, finding persuasive recent decisions by several circuits that have expanded Title VII protection to include discrimination based on transgender status and sexual orientation—including Zarda v. Altitude Express, Inc., EEOC v. R.G. & G.R. Harris Funeral Homes, Inc., and Hively v. Ivy Tech Cmty. Coll. of Ind.—assumed that Title VII prohibits transgender discrimination. In so doing, the court expressly stated that the Fifth Circuit had not yet addressed the issue. Nonetheless, the court found that she failed to show Phillips 66 discriminated against her because of her transgender status or failure to conform to sex stereotypes when it rescinded the job offer and granted summary judgment against her Title VII sex discrimination claim.

Blum. But, said the Fifth Circuit on appeal, “we have addressed the issue.” Citing to Blum, the court noted that not only does it remain binding precedent in the Fifth Circuit, “Our sister circuits—including those favorably quoted in the district court’s published opinion—recognize Blum as our precedent.” Yet, the Fifth Circuit pointed out, the district court did not mention, let alone distinguish, Blum. “Most notably, it did not contend that Title VII applies to transgender status but not sexual orientation. To the contrary, the court concluded that the ‘same’ analysis applies to transgender status and sexual orientation alike.”

Amicus attention on Title VII. Noting that Phillips 66, both in the court below and on appeal, took no positon on whether Title VII prohibits discrimination on the basis of transgender status, the court pointed out that this appeal has nevertheless attracted substantial amicus attention on the issue. Although the EEOC filed a brief asking the court to hold that Title VII does indeed prohibit discrimination on the basis of transgender status, it subsequently withdrew its request to participate in oral argument due to the government shutdown. Not only did the court then allow the National Center for Lesbian Rights to take its place, it also appointed an attorney as amicus curiae to brief and argue the contrary interpretation of Title VII.

Affirmed on other grounds. Despite this Title VII attention, the Fifth Circuit affirmed the district court on other grounds. The applicant, said the court, failed to establish a prima facie case of discrimination because she did not present evidence that non-transgender applicants were treated more favorably than she to show that Phillips 66’s stated reason for rescinding the job offer was pretextual.

Higginbotham’s concurrence. In a short one-paragraph opinion, Judge Higginbotham concurred in the dismissal of the applicant’s claims on the grounds stated in the majority opinion. Noting that Blum was decided decades before Lawrence v. Texas, a U.S. Supreme Court case that invalidated laws criminalizing same-sex sexual conduct, the judge stated out that “we have never since relied on Blum for its holding that Title VII does not cover sexual orientation discrimination. Neither party, in the district court or this court, relied on or questioned Blum’s continued vitality—so, wisely I think, we do not reach here to resolve Blum’s endurance or the question of whether Title VII today proscribes discrimination against someone because of sexual orientation or transgender status. We do not because we cannot, even with elegant asides.”

Ho’s concurrence. Judge Ho, in a separate concurring opinion (to the majority opinion he authored), further wrote that “The majority opinion makes plain what should go without saying—that our precedent remains binding in this circuit.” Although there are two competing schools of thought on what it means to “discriminate because of sex,” he argued that for a number of reasons, the “traditional interpretation should prevail.”

No one, he asserted, seriously contends that at the time of its enactment, the public meaning and understanding of Title VII included sexual orientation or transgender discrimination. Further, the original understanding of Title VII was bolstered by four decades of case law, during which time “every federal circuit to address the issue—including the First through the Eleventh—rejected attempts to construe Title VII to prohibit discrimination on the basis of either sexual orientation or transgender status.”

The traditional interpretation, said the judge, is also the only reading that comports with common usage. “It would defy common sense,” Ho argued, “to imagine that lawmakers labored to assemble a majority coalition to eradicate sexual orientation and transgender discrimination from the workplace—only to select the most oblique formulation they could think of (‘because of sex’) and then hope for the best that courts would understand what they meant.”

Price Waterhouse. While opponents of the traditional approach to Title VII argue that their position is compelled by the Supreme Court’s Price Waterhouse v. Hopkins decision, Judge Ho explained that “Price Waterhouse doesn’t make sex stereotyping per se unlawful under Title VII. To the contrary, under Price Waterhouse, sex stereotyping is actionable only to the extent it provides evidence of favoritism of one sex over the other.”

And while opponents of the traditional view of Title VII also claim their position is compelled by an analogy to race, and specifically, to interracial marriage, the Supreme Court, he argued, has analyzed interracial marriage differently from same-sex marriage. The Court “has condemned laws against interracial marriage, not only because of our constitutional commitment to color blindness, but because prohibitions on interracial marriage are racist, pure and simple.” In contrast, “the Court did not establish a right to same-sex marriage based on sex discrimination at all, let alone based on blindness to sex. Instead, it held that traditional marriage laws discriminate on the basis of sexual orientation, not sex.”

Concern. Noting that “We must have confidence that our words will be faithfully construed in the future, consistent with our common understanding,” Judge Ho expressed concern “that the people are losing faith in their institutions—and that our courts are giving the people reason to do so.”