Sixth Circuit Holds Title VII Prohibits Transgender or Transitional Status Discrimination

In E.E.O.C. v. R.G. & G.R. Harris Funeral Homes, Inc. , — F.3d –, No. 16-2424, 2018 WL 1177669 (6th Cir. Mar. 7, 2018), the United States Court of Appeals for the Sixth Circuit held that discrimination on the basis of transgender or transitional status constitutes discrimination on the basis of sex in violation of Title VII of the Civil Rights Act of 1964, as amended (“Title VII”).

The plaintiff, Aimee Stephens, was formerly known as Anthony Stephens. She worked for R.G. & G.R. Harris Funeral Homes, Inc., which was a closely held for profit corporation. Stephens was terminated from employment shortly after she advised the owner of the funeral home that she intended to transition from male to female and would represent herself as a woman at work, including dressing as a woman. The federal district court recognized a claim for discrimination based on failing to conform to sex stereotypes, but the district court ruled that Stephens could not advance an alternative theory of sex discrimination based on her transgender or transitional status. The Sixth Circuit affirmed the district court’s decision with respect to sex stereotyping claim, but devoted much of its lengthy opinion to the issue of transgender/transitional status discrimination.

The EEOC and Stephens argued that transgender discrimination is based on non-conformance of an individual’s gender identity and appearance based on sex-based norms and expectations, which constitutes a form of sex discrimination. The funeral home argued that transgender status refers to one’s self-assigned gender identity, not that person’s sex, and therefore does not constitute sex discrimination. The Sixth Circuit found that the EEOC and Stephens had the better argument for two reasons.

First, the Sixth Circuit found that 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 funeral home argued that its decision to terminate Stephens’ employment was based on her refusal to comply with the company’s dress code for men, the court framed the question as “whether Stephens would have been fired if Stephens had been a woman who sought to comply with the women’s dress code.” The court concluded that the answer “obviously is no” and, thus, “confirm[ed] that Stephens’[] sex impermissibly affected [the company’s] decision to fire Stephens.” The court buttressed its conclusion by comparing the case before it to a case where an employee was fired after the employee converted from one religion to another and the court found the termination constituted discrimination “because of religion” in that discrimination because of religion “easily encompasses discrimination because of a change in religion.” (emphasis added by court).

Second, the Sixth Circuit concluded that “discrimination against transgender persons necessarily implicates Title VII’s proscriptions against sex stereotyping.” In this regard, the court noted that a transgender person is someone who “fails to act and/or identify with his or her gender” – “i.e., someone who is inherently ‘gender non-conforming.’” As a result, the Sixth Circuit concluded that “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 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 funeral home also asserted other defenses beyond the viability of a claim premised on transgender status. One of those defenses was the ministerial exception under Title VII. In order for the ministerial exception to bar a claim, the employer must be a religious institution and the employee must have been a ministerial employee. Although the ministerial exception is not limited to a church, diocese, synagogue, or any entity operated by a traditional religious organization, to qualify for the exception, the institution must be “marked by clear or obvious religious characteristics.” The court found that the funeral home, however, had no religious characteristics. In this regard, the funeral home did not purport to “establish and advance” Christian values, it was not affiliated with any church, its articles of incorporation did not avow any religious purpose, its employees are not required to hold any particular religious views, and it served people of all religions. The fact that the funeral home’s mission statement stated that “its highest priority is to honor G-d in all that we do as a company and as individuals” was not sufficient to overcome the absence of the many other indicia of being a religious institution. Even if the funeral home could establish that it was a religious institution, Stephens was not a “ministerial employee,” which further precluded the exception from applying.

Another defense the funeral home asserted was based on the Religious Freedom Restoration Act (“RFRA”). The RFRA precludes the government from “substantially burden[ing] a person’s exercise of religion even if the burden results from a rule of general applicability” unless the government “demonstrates that the application of the burden to the person – (1) is in furtherance of a compelling government interest; and (2) is the least restrictive means of furthering that compelling governmental interest.” In responding to this defense, the court noted that Congress intended the RFRA to apply “only to suits in which the government is a party.” While the lawsuit was filed by the EEOC, Stephens became an intervenor at the appellate level. The funeral home contended that the question of the RFRA’s application to Title VII suits between private parties “is a new and complicated issue that has never been part of this case and has never been briefed by the parties.” The court agreed with the funeral home that it would be prejudicial to allow Stephens to intervene on appeal and use that as a basis to remand the case without applying the RFRA. The court spent several pages addressing the various steps to apply the RFRA defense and ultimately concluded that it did not apply.

The Sixth Circuit’s decision in Harris Funeral Homes is significant because it represents another federal appellate court that has expanded the reach of Title VII sex discrimination claims. Most of the attention regarding sex discrimination claims under Title VII recently has focused on sexual orientation cases, but transgender cases are very similar in that both theories rely heavily on sex role stereotyping and/or gender role conformity to support a claim. While federal appellate courts recognizing sexual orientation discrimination and transgender discrimination as forms of sex discrimination in violation of Title VII remain the minority, the number of circuits recognizing such claims continues to expand.

If you have any questions regarding this post, please contact Stephen B. Stern at sstern@hwlaw.com or (410) 260-6585 or Amitis Darabnia at adarabnia@hwlaw.com or (410) 260-6592.

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