Another Federal Court Expands Title VII Protection to Transgender Individuals

March 28, 2018

In Equal Employment Opportunity Commission v. R.G. & G.R. Harris Funeral Homes, the Sixth Circuit recently held that a transgender individual has a cognizable claim of gender identity discrimination under Title VII, and furthermore that the employer’s religious objections to transgender individuals working at his business did not override the employee’s rights to be free from discrimination, therefore preventing the employer from terminating the transgender employee.

The Facts

Aimee Stephens was born biologically male. Stephens worked as a funeral director at R.G. & G.R. Harris Funeral Homes, Inc. (“the Funeral Home”) for some period of time while she was lived and presented as a man.

The Funeral Home was a closely held for-profit corporation in Michigan. The Funeral Home, is not affiliated with any specific church; it does not claim to have a religious purpose in its articles of incorporation; it is open every day, including Christian holidays; and it serves clients of all faiths. However, Thomas Rost was the principal owner and operator of the Funeral Home. Rost identifies as Christian and practiced Christianity for over sixty-five (65) years. He testified in the case that he was called by God to serve the grieving, and the Funeral Home’s website contains a mission statement quoting scripture and stating that the Funeral Home’s “highest priority is to honor God in all that we do as a company.” Rost hires employees belonging to any faith or no faith at all and testified that he “does not endorse or consider himself to endorse his employees’ beliefs or non-employment-related activities.”

Stephens told Rost about her plans to her plans to transition from a man to a woman and represent herself and dress as a woman while at work. Stephens told Rost about her struggles with gender identity, and she stated her intention to sex reassignment surgery. Stephens explained further that as a precursor for surgery, she had to live full-time as a woman for one year, including while at work at the Funeral Home. After Rost received this letter, Rost terminated Stephens’s employment.

Rost testified that he fired Stephens because “he was no longer going to represent himself as a man. He wanted to dress as a woman.” He claimed that he “sincerely believe[s] that the Bible teaches that a person’s sex is an immutable God-given gift,” and that he would be “violating God’s commands if [he] were to permit one of [the Funeral Home’s] funeral directors to deny their sex while acting as a representative of [the] organization” or if he were to “permit one of [the Funeral Home’s] male funeral directors to wear the uniform for female funeral directors while at work.”

The Sixth Circuit Appeals Court Rules Title VII Protects Against Gender Identity Discrimination and the Owner’s Religious Beliefs Did Not Protect him from Liability

The Equal Employment Opportunity Commission (“EEOC”) took on the case for Stephens and sued the Funeral Home in Federal District Court in Michigan. The District Court initially found in favor of the Funeral Home, ruling that transgender status is not a protected trait under Title VII. The Court also concluded that the Religious Freedom Restoration Act precluded the EEOC from enforcing Title VII against the Funeral Home, because doing so would substantially burden Rost and the Funeral Home’s religious exercise. EEOC v. R.G. & G.R. Harris Funeral Homes, Inc., 201 F. Supp. 3d 837, 840 (E.D. Mich. 2016).

On appeal, the Sixth Circuit reversed and ruled in favor of the EEOC and the transgender employee. The Sixth Circuit found that Stephens was fired because of her failure to conform to sex stereotypes, in violation of Title VII, and that she could pursue a claim under that theory. The Court went even further, however, finding that Stephens also could pursue a sperate and distinct theory of liability against her employer that she was discriminated against on the basis of her transgender and transitioning status. In so ruling, the Sixth Circuit concluded that discrimination on the basis of gender identity was prohibited by Title VII.

The court stated “Discrimination on the basis of transgender and transitioning status is necessarily discrimination on the basis of sex” protected by Title VII. The Court reasoned 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” which is expressly covered and prohibited by Title VII. Furthermore, “discrimination against transgender persons necessarily implicates Title VII’s proscriptions against sex stereotyping.”

On appeal, the Sixth Circuit also rejected that Rost’s religious objections to employing a transgender individual who intended to present at work as a different sex than she was biologically born trumped the employee’s rights against discrimination. The Court reasoned that the “ministerial exception” to Title VII, which “preclude[s] application of [employment discrimination laws such as Title VII] to a religious institution and its ministers” did not apply because the Funeral Home was not a religious institution and the employee was not a ministerial employee.”

The Court also rejected Rost’s argument under the Religious Freedom Restoration Act. The Religious Freedom Restoration Act only applies to the government enforcement of a religiously neutral law against an individual if that law substantially burdens the individual’s religious exercise. This defense was available in this particular case because the EEOC, and not Stephens individually, filed the claim against the employer.

The Funeral Home said employing Stephens substantially burdened it in two ways: 1) a transgender funeral director could create distractions for the deceased’s loved ones and thereby hinder their healing process and the Funeral Home’s ministry, and 2) forcing Rost to violate his faith and allow Stephens to dress as a woman at work would pressure Rost to leave the funeral industry and end his ministry to grieving people. The Sixth Circuit found that neither burden was substantial. The alleged distraction caused to customers was premised on their presumed biases. As for the claim that the employer would be forced to act in contradiction of his faith to employ Stephens, the Court said that the employer did have to take some action like purchase Stephens female-specific clothing; all Rost had to do was permit Stephens to wear attire that reflects a conception of gender at odds with Rost’s religious beliefs. This is not a substantial burden, according to the Court.

Finally, the Sixth Circuit found that even if Rost had established a substantial burden, he would have to employ Stephens nonetheless because the EEOC had a compelling interesting in enforcing elimination of workplace discrimination on the basis of sex, and there was no less restrictive means of achieving this interest other than to find liability in this employer for discrimination. For all of these reasons, Sixth Circuit granted judgment to the EEOC.

The Lessons

This case emphasizes once again that if they wish to avoid liability for discrimination, employers should seriously consider taking steps to avoid discriminating against a person based on any personal characteristic, including sexual orientation or gender identity.

This latest decision by the Sixth Circuit is consistent with decisions of other Federal Circuit courts, including the Second Circuit in Zarda v. Altitude Express, Inc. and the Seventh Circuit in Hively v. Ivy Tech Community College of Indiana, who each have recently ruled that Title VII’s prohibition against sex discrimination does in fact cover discrimination on the basis of sexual orientation and gender identity. Employers operating in states within these circuits should avoid discriminating on the basis of gender identity or sexual orientation.

Even in states outside these circuits, employers should be extremely careful about taking adverse employment actions against transgender and gay employees. First, the clear trend of federal courts is to recognize that Title VII does in fact prohibit discrimination on the basis of gender identity and sexual orientation.

Second, such discrimination may also be prohibited by state law in the employer’s jurisdiction. Several states, including Massachusetts and New Hampshire, have laws expressly prohibiting discrimination on the basis of sexual orientation. Massachusetts state law also prohibits discrimination on the basis of gender identity. Employers in these states and any other with laws expressly prohibiting discrimination on the basis of sexual orientation or transgender status must avoid discriminating because of an employee’s sexual preference or gender identity, and should change their policies to say so.

Finally, R.G. & G.R. Harris Funeral Home also reflects that the alleged beliefs of an employer may well be insufficient to provide a basis to avoid employing a diverse workforce in terms of sexual orientation and gender identity. Only when the employer is legitimately a religious institution will an employer’s religious views potentially override the employee’s rights to be free from discrimination.