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Sixth Circuit Holds Transgender Status Is Protected by Title VII and Rejects Religious Freedom Restoration Act Defense

Executive Summary:

The Sixth Circuit Court of Appeals (which has appellate jurisdiction over the district courts in the following districts: Eastern District of KentuckyWestern District of KentuckyEastern District of Michigan) is the latest to weigh in on the heated debate as to whether sexual orientation, gender identity, transgender status and/or gender expression are protected classes under Title VII of the Civil Rights Act of 1964. Following on the heels of the Second Circuit’s February 26, 2018 en banc ruling in Zarda v. Altitude Express that Title VII protects sexual orientation, on March 7, 2018, in EEOC v. R.G., 2018 U.S. App. LEXIS 5720 (6th Cir. March 7, 2018), the Sixth Circuit became the first to hold that Title VII also protects transgender status. In doing so, the Sixth Circuit rejected the employer’s defense under the Religious Freedom Restoration Act (RFRA).

Background:

EEOC v. R.G. was brought by the EEOC on behalf of Aimee Stephens against R.G. & G.R. Funeral Homes, Inc. (the “Funeral Home”), a closely-held for-profit company owned and operated by Thomas Rost. The lawsuit alleged that the Funeral Home discriminated against Stephens based on her transgender status. In the Funeral Home’s defense, Rost stated he is a devout Christian, but that the Funeral Home is neither associated with any church nor does it claim to have a religious purpose. The Funeral Home had specific uniform requirements that differed for male and female employees.

Stephens, who is biologically male, became employed by the Funeral Home in 2007. When Stephens notified Rost that she identifies as female and would be transitioning to and presenting as a woman, Rost terminated her employment. Rost testified that he terminated Stephens because Stephens “was no longer going to represent himself as a man. He wanted to dress as a woman.” Rost further testified that pursuant to the Bible, gender is an “immutable God-given gift,” not a “changeable social construct.” Based on this belief, he could not allow a male representative of the Funeral Home to dress as a woman. He expressed concern about her using the women’s restroom and that she would be a distraction to mourners, which would interfere with their healing process and Rost’s ability to provide them religious solace.

In the lawsuit, the EEOC claimed, among other things, that Stephens was terminated because of her transgender status in violation of Title VII. The lower court dismissed the EEOC’s claim, holding that transgender status is not a class protected by Title VII. The court found, however, that the EEOC could proceed on a Price Waterhouse v. Hopkins sex stereotyping theory, but held that the RFRA, which is available only when the government is a party, provided a complete defense to the claim.

On appeal, the Sixth Circuit reversed, becoming the first jurisdiction to hold that discrimination based on transgender status – not just sex stereotyping – is specifically prohibited by Title VII. Recent Title VII cases – including Evans v. Georgia Regional Hospital (Eleventh Circuit), Hively v. Ivy Tech. (Seventh Circuit) and Zarda v. Altitude Express (Second Circuit) – have all focused only on sexual orientation as a protected class under Title VII. Similar to the defendants in those actions, the Funeral Home argued here that Title VII’s protection of “sex” refers to biological sex only. Both Hively and Zarda rejected that argument in the context of sexual orientation, and the Sixth Circuit followed suit. In the context of transgender status, the Sixth Circuit held that: (1) “it is analytically impossible to fire an employee based on that employee’s status as a transgender person without being motived, at least in part, by the employee’s sex”; and (2) “discrimination against transgendered persons necessarily implicates Title VII’s proscriptions against sex stereotyping” and “there is no way to disaggregate discrimination on the basis of transgender status from discrimination on the basis of gender non-conformity, and we see no reason to try.”

The Sixth Circuit also rejected the Funeral Home’s RFRA defense. The court held that the Funeral Home failed to establish that Rost’s religious exercise would be substantially burdened by requiring the Funeral Home to comply with Title VII. Additionally, the court held that the broad proscription of Title VII to “combat[] discrimination in the workforce” provides the EEOC with a compelling state interest. The Sixth Circuit specifically rejected Rost’s attempts to narrow the inquiry to the specific facts of the case. Finally, the Sixth Circuit held that Title VII itself constitutes the least restrictive means for the EEOC to provide employees with equal opportunities in the workplace.

These final two holdings are important. Indeed, once the Sixth Circuit held that that Rost’s purported “burdens” were insufficient as a matter of law to support an RFRA defense, its inquiry could have stopped there. However, it did not. By analyzing the next step – whether the EEOC had successfully demonstrated that enforcing Title VII in this case was the least restrictive means of furthering a compelling government interest – the final holding could be interpreted to entirely eliminate the RFRA defense in Title VII cases. The RFRA requires that, where a defendant can establish that he has a sincerely held religious practice that is substantially burdened by the government’s action at issue, the burden shifts to the government agency, in this case the EEOC, to prove both a compelling state interest and that its action burdening religion is the least restrictive means possible to achieve the state’s interest. The Sixth Circuit’s decision that Title VII always provides a compelling state interest to eliminate discrimination in the workplace, and that EEOC enforcement of Title VII alone is the least restrictive means of accomplishing that interest, arguably leads to the conclusion that the EEOC will always be able to meet its burden, at least in courts bound by this decision. Religious organizations being sued by the EEOC should be particularly cognizant of the potential implications of this decision.

Bottom line:

Employers should continue to be mindful of new and developing workplace protections for the LGBTQ community at the federal level. As the Circuit Courts continue to weigh in on these issues, more and more courts are holding Title VII protects sexual orientation, gender identity, gender expression and transgender status. As it now stands, Title VII prohibits gender stereotyping nationwide, transgender status discrimination in the Sixth Circuit (Kentucky, Michigan, Ohio and Tennessee) and sexual orientation discrimination in the Seventh (Illinois, Indiana and Wisconsin) and Second (New York, Connecticut and Vermont) Circuits. But state law still varies across the country. This poses a particular challenge to employers operating in multiple jurisdictions. We continue to encourage employers adopt comprehensive policies applicable to all employees, irrespective of LGBTQ laws, that prohibit discrimination against all traditional protected classes, as well as sexual orientation, gender identity, gender expression, and transgender status. These policies should provide comprehensive complaint and investigation policies and procedures, as well as training to ensure these policies are utilized and appropriately enforced. Employers are also encouraged to consider, develop and utilize “transition plans” for employees who are transitioning between genders. An interactive process, during which the employer and employee discuss how the employee’s transition will be handled in the workplace, ensures the best outcome for both the employee, his/her coworkers and the company.

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