FEDERAL APPEALS COURT REJECTS TRANSGENDER RIGHTS, BUT ISSUES STILL REMAIN

A federal appeals court has rejected the position of the Equal Employment Opportunity Commission (EEOC) that discrimination against a worker based on sexual orientation is prohibited by federal law.  Hively v. Ivy Tech Cmty. Coll., 129 FEP Cases 657, 7^th Cir. App. (July 28, 2016).  This decision is the first federal appeals court ruling to address the issue since the EEOC in July 2015 ruled that bias based on sexual orientation is sex discrimination and thus violates Title VII.  The issue is currently pending before two other federal appeals courts.  Although the issue of sexual orientation may be slightly different than transgender rights, similar issues as to the definition of "sex discrimination." 

Even the Seventh Circuit ruling stated that "perhaps the writing is on the wall" for changing federal law, but indicated that the change must come from Congress or the Supreme Court.  The court does indicate that there is a distinction between discrimination on the basis of gender nonconformity, which is currently prohibited by Title VII, and sexual orientation discrimination, which the court says isn’t prohibited by Title VII.  Meanwhile, Democratic Presidential Nominee Hillary Clinton has pledged to make enacting a bill which would expressly add sexual orientation and gender identity as protected categories is her "highest priority" if elected. 

The issue is not going away, and current federal regulations protect such categories under the government contracting rules.  The Labor Department’s Office of Federal Contract Compliance Programs (OFCCP) issued an agency directive back in August 2014 to indicate that sex-based employment discrimination under Executive Order 11,246 includes gender identity and transgender status.  President Obama has issued EO 13,672 to expressly prohibit contractors from discriminating against applicants and employees based on sexual orientation and transgender status, and the OFCCP issued rules implementing that Order in December 2014. 

The government’s position is that the sex discrimination rules require contractors to allow workers to use restrooms, changing rooms and similar facilities that are consistent with their gender identity.  Similar issues arise concerning benefits and medical coverage issues. 

Editor’s Note - Current legal interpretations prohibit employers from discrimination on the basis of gender non-conformity, even though such laws do not expressly extend these protections to sexual orientation discrimination.  However, the EEOC takes the position that sexual orientation discrimination is also prohibited, and seems to regularly attack such types of discrimination in their current litigation approach.  Further, the OFCCP government contracting rules extend the protections of sexual orientation discrimination by contract to federal contractors.  For these reasons, most employers are adapting their company policies to recognize such rights, even though they are not yet settled law.