In what is reported to be a landmark decision, the United States Equal Employment Opportunity Commission (“EEOC”), in Macy v. Bureau of Alcohol, Tobacco, Firearms and Explosives, found for the first time that discrimination against transgender individuals constitutes sex discrimination in violation of Title VII. While not the first case to explore the notion that Title VII prohibits discrimination based upon gender identity and stereotypes, it is the first decision by the EEOC addressing the subject of transgender discrimination.

In Macy, the EEOC held that the federal Bureau of Alcohol, Tobacco, Firearms and Explosives (the “ATF”) could be found to have violated Title VII when it denied a job application from a transgender woman who applied for a position as a ballistics technician with the federal agency. Notably, the claimant was a veteran police detective, who allegedly was assured by the ATF that she would be hired in the position once she passed her background check. Thereafter, in the midst of the hiring process, after she disclosed her gender transition, the claimant supposedly was told that funding for that position had been suddenly cut. Claimant also claims that, nonetheless, she later learned that the ATF hired another individual for the position that she sought. Ultimately, in response to the claimant’s assertions that her EEOC charges of sex and gender identity discrimination should be processed together under Title VII, the EEOC concluded that a claim of discrimination based on gender identity, change of sex, or transgender status is cognizable under Title VII. Similarly, the EEOC found that discrimination against a transgender individual because that person is transgender is, by definition, discrimination based on sex, and that such conduct therefore runs afoul of Title VII. However, because the matter concerned only jurisdictional issues, the EEOC did not rule on whether or not the ATF actually committed discrimination and remanded the issue for further processing.

In reaching its conclusion, the EEOC relied on federal court decisions from throughout the nation that have addressed Title VII’s impact on gender identity. In particular, the EEOC cited the United States Supreme Court’s decision in Price Waterhouse v. Hopkins, 490 U.S. 228, 239 (1989), in which the High Court held that Title VII prohibits discrimination based upon gender, and thus, gender stereotypes; as well as decisions from the Ninth, Sixth, and Eleventh Circuits, all of which directly addressed the issue of whether discrimination on the basis of one’s gender identity or gender-related appearance are viable claims under Title VII. See Schwenk v. Hartford, 204 F.3d 1187 (9th Cir. 2000); Smith v. City of Salem, 378 F. 3d 566 (6th Cir. 2004) (recognizing that discrimination against transgender person because of gender nonconformity is gender stereotyping barred by Title VII); and Glenn v. Brumbly, 663 F.3d 1312 (11th Cir. 2011) (explaining that discrimination against individuals because they do not conform to socially prescribed gender roles is barred by Title VII, after finding that termination of employee because of intended transition from male to female was sex discrimination and violated employee’s constitutional rights under the 14th Amendment).

While the EEOC decision is not precedential and is not controlling on any courts, EEOC decisions generally are afforded significant deference by federal courts. Thus, the EEOC’s holding in this case should be taken seriously by all employers. Simply put, companies cannot and should not consider gender, in any form, when making employment decisions.

As a result of this decision, it is recommended that all employers review, and where appropriate, revise their EEO/non-discrimination policies, dress code and appearance standards, policies for revising personnel records, and use of restrooms, locker rooms and other gender-specific facilities policies and protocols.