Dive Brief:

• Discrimination against employees, either because of their failure to conform to sex stereotypes or their transgender and transitioning status, is prohibited by Title VII of the Civil Rights Act of 1964, the 6th U.S. Circuit Court of Appeals ruled March 7. Adverse employment actions based on sex stereotyping have long been considered discrimination and, in Aimee Stephens v.  R.G. &. G.R. Harris Funeral Homes, Inc. (No. 16-2424), the employee was fired because of her failure to conform to sex stereotypes, as well as her transgender status, in violation of Title VII, the 6th Circuit said.
• According to court documents, the employer in the case fired the employee when she informed it that she would begin presenting as a woman at work, adhering to the dress code for women. Following a U.S. Equal Employment Opportunity Commission (EEOC) complaint and years of litigation, the court concluded that "[d]iscrimination on the basis of transgender and transitioning status is necessarily discrimination on the basis of sex."
• The court explained 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." Additionally, "discrimination against transgender persons necessarily implicates Title VII’s proscriptions against sex stereotyping," it said.

Dive Insight:

The 6th Circuit's opinion applies only in Kentucky, Michigan, Ohio and Tennessee, but is part of a larger shift among the federal appeals courts. Just last week, the 2nd Circuit held that that Title VII prohibits discrimination based on sexual orientation because such discrimination is motivated, at least in part, by sex and is therefore a subset of sex discrimination. The 7th Circuit has reached the same conclusion, but the 11th Circuit disagrees. That disagreement may remain until the U.S. Supreme Court takes up the questions or Congress adds explicit LGBTQ coverage to the statute.

In light of these rulings — and the EEOC's continued enforcement of its position — employment lawyers are encouraging businesses to refrain from discriminating against employees and applicants based on their sexual orientation or transgender status.

Employers also may want to consider adopting a plan to assist employees who come forward with plans to transition. Training managers and offering them a framework in advance can go a long way toward ensuring the process goes smoothly.