In 2020, the U.S. Supreme Court ruled in Bostock v. Clayton County that discrimination based on sex included discrimination based on sexual orientation and sexual identity. Notably, the Court did not address whether its ruling would have any impact on workplace rules governing pronoun usage, bathrooms, locker rooms, and dress codes.
In 2021, the Equal Employment Opportunity Commission (“EEOC”) published guidance based on the Bostock decision to help employers and employees navigate the changed landscape. The EEOC guidance addresses issues specific to the transgender community. This includes the EEOC’s position that the following types of workplace conduct could constitute sex discrimination and contribute to a hostile work environment: (1) intentional and repeated misuse of a transgender employee’s name and pronouns; (2) denying an employee’s use of a bathroom or locker room that corresponds to the employee’s gender identity; and (3) prohibiting a transgender employee from dressing or presenting consistent with that person’s gender identity.
The EEOC’s guidance did not meet with universal approval. In fact, the state of Texas sued the EEOC and various other federal officials, arguing that the guidance misstates the Bostock decision, which in turn, increases the scope of liability on the state of Texas in its capacity as an employer. The lawsuit also challenged the EEOC’s authority to even issue the guidance, arguing that the Democratic EEOC Chair approved the guidance on her own without submitting it to a vote by the EEOC leadership (which, at the time, was a 3-2 Republican majority).
The Texas lawsuit was not the only legal challenge to the guidance. Twenty states, including Kansas, Missouri, and Arkansas, filed a similar case in Tennessee which is currently stayed pending an appeal.
In October, a federal district court in Texas issued its decision in the Texas case. The court summarized the case as asking one basic question: Does Bostock prohibit discrimination against “homosexuality and transgender status” or does it extend to homosexuality and transgender “conduct.” In other words, can an employer legally impose workplace rules that might infringe on a transgender employee’s manner of dress, identified pronoun and name, and use of a gender- identity-conforming bathroom or locker room.
The EEOC argued that Bostock addressed discrimination against individuals for being transgender, and the distinction between “status” and “conduct” is a distinction without a difference because sex is “inextricably intertwined” with conduct. But the court did not find this argument persuasive considering the Bostock decision did not specifically decide specific gender identity issues, such as the use of pronouns and bathrooms, thereby reserving that issue for future cases to decide. Thus, according to the Texas court, Bostock did not decide whether workplace rules infringing on certain conduct constitutes discrimination based on transgender status. Thus, the court ruled that the EEOC guidance is unlawful because it violated Title VII regulations and its own procedural requirements when it issued the guidance without a vote by the entire EEOC leadership.
What comes next?
Because the Texas court declared the EEOC’s guidance unlawful, employers nationwide are not bound by its terms. So where does this leave employers, from a practical standpoint? Is it now legal to refuse to use a transgender employee’s identified pronouns and names? Can employers prohibit transgender employees from using a gender-conforming bathroom without violating Title VII?
The Texas court ruling did not decide any of these questions. It merely says that the Supreme Court did not decide these issues, and the EEOC did not follow proper procedures when it issued its guidance. The Texas case did not involve any actual employees claiming their rights were violated by an employer’s workplace rules. Thus, these gender-identity conduct issues are undecided and ripe for future litigation to confront these issues.
So what should your organization do? For now, and until we get clarity from the legislatures or courts, best practice is to continue enacting and following policies that treat all employees, regardless of gender identity or sexual orientation, fairly and non-discriminatorily. If a specific question or situation relating to an employee’s protected status arises—which could be an employee’s transgender status or another employee’s concern about their religious rights— reach out to your legal counsel to weigh your legal risks and options.