The new facility coincides with the implementation of an Executive Order that prohibits federal contractors from discriminating on the basis of gender identity. The Order also amends anti-discrimination laws for federal workers by adding gender identity to the list of protected categories.

According to the Obama Administration, the new federal laws will impact approximately 1.5 million workers and 24,000 companies with federal contractor designation. Even if your business is not specifically impacted, employers should have policies and procedures in place to address issues related to gender identity and gender transitioning.

Legal Background

In 2012, the EEOC ruled that employment discrimination against employees because they are transgender, because of their gender identity, and/or because they have transitioned (or intend to transition) constitutes sex discrimination in violation of Title VII of the 1964 Civil Rights Act. Last year, the Department of Justice issued a memo also recognizing that transgender people are protected under the civil rights statute.

In 2014, the EEOC began to test the commission’s position in federal court by filing a series of lawsuits alleging that employers violated Title VII by terminating transgender workers who did not conform to the employer’s gender-based expectations, preferences, or stereotypes. Earlier this month, the EEOC announced that one of its first transgender lawsuits had settled.

According to the agency, Lakeland Eye Clinic will pay $150,000 to resolve charges that it terminated an employee after she informed them she was transgender and intended to start presenting as a woman. The clinic also agreed to implement a new gender discrimination policy and to provide training to its management and employees regarding transgender/gender stereotype discrimination.

"This historic settlement is significant," said David Lopez, EEOC General Counsel.  "It not only is one of the first two lawsuits ever filed by the Commission alleging sex discrimination against a transgender individual, but it also solidifies the EEOC's commitment to enforcing the rights of transgender employees secured by Title VII."

In another significant legal development this month, the EEOC also ordered the Department of the Army to pay damages to a transgender civilian employee who was prohibited from using a restroom that matched her new identity and repeatedly referred to by her former gender.

"We recognize that certain employees may object — some vigorously — to allowing a transgender individual to use the restroom consistent with his or her gender identity," the EEOC ruling stated. "But supervisory or co-worker confusion or anxiety cannot justify discriminatory terms and conditions of employment.

The Message for Employers

The EEOC is fulfilling its mission to make gender identity discrimination a top enforcement priority for FY2013-2016. According to the EEOC’s enforcement data, the agency received more than 300 Title VII charges related to gender identity during 2013 and the first half of 2014. The latest EEOC victories will only further solidify the enforcement trend.

Studies also show that without strong policies in place, employment discrimination is likely to occur. More than 40 percent of lesbian, gay, and bisexual workers have suffered employment discrimination due to their sexual orientation. Moreover, 90 percent of transgender employees have experienced harassment, mistreatment, or discrimination the workplace.

In New Jersey, the Law Against Discrimination includes “gender identity and expression” as a protected class. Accordingly, any discrimination and/or retaliation against transgender workers would be proper grounds for an employment lawsuit under state law. Employers should consider the implications of failing to have adequate restroom facilities and policies in place to prohibit discrimination. If you have any questions please contact our office.