How Does Supreme Court’s Remand of Transgender Discrimination Case Impact Wage-and-Hour Class Actions?

supreme court transgender discriminationOn March 6, 2017, the Supreme Court, in a one-sentence summary disposition, remanded the case of Gloucester County Sch. Bd. v. G.G. to the U.S. Court of Appeals for the Fourth Circuit “for further consideration in light of the guidance document issued by the Department of Education and Department of Justice on February 22, 2017.”  For those unfamiliar with Gloucester County, the case involves a public school’s obligations to a transgender student under Title IX and, in particular, whether Title IX’s prohibition against sex discrimination requires a school to treat transgender students consistent with their gender identity when providing sex-separated facilities, such as toilets, locker rooms, and showers.

So what does this have to do with wage-and-hour class actions?  As it turns out, in Gloucester County, the Supreme Court was poised to consider the scope, and perhaps the continuing viability, of the Auer doctrine, which frequently comes into play in wage-and-hour litigation.  Under the Auer doctrine, courts generally will enforce an agency’s interpretation of its own regulations unless that interpretation is “plainly erroneous or inconsistent with the regulation.”  In wage-and-hour class actions, this often results in cases being decided based on guidance issued by the Department of Labor through opinion letters, its Field Operations Handbook, and other sources.

This deference to the Department of Labor can be frustrating for employers and attorneys practicing wage-and-hour law because the guidance issued by the Department of Labor often changes with each new Presidential administration.  For example, an entire industry can decide to classify a group of employees as exempt from the FLSA’s overtime requirements based on an opinion letter from the Department of Labor only to learn years later that the Department has withdrawn the opinion letter after the start of a new administration.  If courts are obligated under Auer to defer to these shifting interpretations issued by the Department of Labor, it can create a great deal of uncertainty for employers seeking to comply with the FLSA and for parties litigating wage-and-hour class actions.

In the long term, eliminating or narrowing the Auer doctrine could provide more consistency for employers and litigants.  With the remand of Gloucester County, that is unlikely to happen in the near future.  In the short term, however, the continuing viability of the Auer doctrine may benefit employers who are hopeful that the Department of Labor, under the Trump administration, will take a more employer-friendly view of certain regulations.  For now, the Department of Labor remains free to shape FLSA through opinion letters and other guidance documents and without having to resort to the time-consuming process of issuing revised regulations.

Jackson Lewis P.C. © 2017

North Carolina Retailers Navigate Conflicting Laws Regarding Transgender Protections

On March 23, 2016, the North Carolina Legislature passed House Bill 2, the “Public Facilities Privacy and Security Act” (“HB2”), that overturned a Charlotte ordinance extending anti-discrimination protections to lesbian, gay, bisexual, and transgender (“LGBT”) individuals and allowing transgender persons to use the bathroom of their choice. Instead, HB2 requires individuals to use public bathrooms that match the gender listed on their birth certificates. A swift public outcry followed, with many celebrities denouncing the law and canceling appearances in North Carolina, companies threatening to boycott, and the American Civil Liberties Union filing a lawsuit challenging HB2 as unconstitutional and for violating federal law.

North Carolina TransgenderNorth Carolina officials have refused to disavow HB2 and, on May 9, filed a lawsuit against the federal government seeking a ruling that HB2 is not discriminatory. The Justice Department has countersued, alleging that HB2 violates Title VII of the Civil Rights Act of 1964 (“Title VII). Regardless of the ultimate outcome of these lawsuits, it is clear that discriminating against LGBT individuals has real consequences, from both a business and legal perspective. What should retailers know and, more importantly, do to survive in this current environment?

At a minimum, retailers should familiarize themselves with their state’s employment nondiscrimination laws (if any) that apply to private employers. Twenty states (including California, Illinois, New Jersey, and New York) and the District of Columbia have passed employment non-discrimination laws that prohibit discrimination by private employers based on both sexual orientation and gender identity. Two states (New Hampshire and Wisconsin) have such laws covering sexual orientation only. These laws protect LGBT persons from discrimination in hiring and in the workplace.

Retailers also are encouraged to review their municipality’s nondiscrimination laws and regulations, if any. For example, New York City law prohibits gender identity discrimination, and the New York City Commission on Human Rights recently announced guidance (“NYC Guidance”) that makes clear what constitutes gender identity and gender expression discrimination under the NYC Human Rights Law. The NYC Guidance warns employers and business owners that they may violate New York City law if they intentionally fail to use a transgender employee’s preferred name, pronoun, or title, or refuse to allow a transgender employee to use single-sex facilities, such as bathrooms or locker rooms, and participate in single-sex programs consistent with their gender identity.

Retailers also should know that the EEOC has aggressively pursued transgender discrimination claims on theories of sex stereotyping and gender nonconformity under Title VII, which bars employers from discriminating against employees on the basis of their sex. In cases involving government employees, the EEOC has held that: (i) an employer’s restriction on a transgender woman’s use of a common female restroom facility constituted illegal sex discrimination under Title VII,(ii) an employer’s intentional references to a transgender female as “he” may constitute sex-based discrimination and/or harassment, and (iii) a transgender employee stated a valid Title VII sex discrimination claim based on his allegation that his employer took over a year to correct his name in the company’s computer system.

The EEOC has taken further action against private companies. For example, it recently entered into a consent decree with a Minnesota financial services company for allegedly refusing to let a transgender employee use the women’s restroom and subjecting her to a hostile work environment. In another action, a Florida eye clinic paid $150,000 to settle an EEOC lawsuit that sought relief for an employee who was allegedly discriminated against when transitioning from male to female.

In light of this climate, retailers are encouraged to accommodate the needs of transgender workers proactively rather than reactively responding to potential claims of discrimination. Retailers, particularly those operating in states with anti-discrimination laws that cover sexual orientation and/or gender identity, should implement a policy designed to foster workplace inclusion. Retailers can avoid significant business and legal risk if they follow these two directives:

  • Call transgender employees by their preferred names, pronouns, and titles, and promptly update internal databases (pay accounts, training records, benefits documents, etc.) with this information upon an employee’s request. The NYC Guidance, for example, advises employers to use the employee’s preferred name regardless of whether the employee has legally changed his or her name “except in very limited circumstances where certain federal, state, or local laws require otherwise (e.g., for purposes of employment eligibility verification with the federal government).” This is a sound policy that retailers beyond New York City should consider following. In addition, employers may choose to offer new business cards and email aliases for their employees.

  • Provide transgender employees access to bathrooms that correspond to their gender identity. On May 3, the EEOC issued a “Fact Sheet” stating that the denial of equal access to a bathroom corresponding to an employee’s gender identity qualifies as sex discrimination prohibited under Title VII and that contrary state law is no defense. The Fact Sheet encourages employers to refer to the more comprehensive “Guide to Restroom Access for Transgender Workers,” which was issued by the Occupational Safety and Health Administration (“OSHA”) and offers model practices for restroom access for transgender employees. Like the EEOC, OSHA advises that “all employees should be permitted to use the facilities that correspond with their gender identity.” Where possible, employers should provide employees with additional options, including single-occupancy gender-neutral (unisex) facilities and use of multiple-occupant, gender-neutral restroom facilities with lockable single occupant stalls.

While the North Carolina Legislature has rolled back protections for the LGBT community, the media attention surrounding HB2 has been largely negative and has affected the businesses of companies operating in the state. Given the number of other states that have enacted laws expressly prohibiting sexual orientation and/or gender identity discrimination, the federal government’s enforcement position, and changing public opinion on the issue, retailers are on notice that such discrimination may have negative business or legal ramifications.

©2016 Epstein Becker & Green, P.C. All rights reserved.

California DFEH Announces Guidance to Employers Regarding Transgender Rights in the Workplace

Individuals who identify as transgender are protected under California’s Fair Employment & Housing Act (Cal. Govt. Code §12940)(“FEHA”).  FEHA protection was extended in 2012 to include gender identity and gender expression categories, and defines “gender expression” to mean a “person’s gender-related appearance and behavior whether or not stereotypically associated with the person’s assigned sex at birth.”  Transgender worker rights have received increased attention in recent months as employers attempt to put into place compliant procedures that are sensitive to transgender workers.

On February 17, 2016, the California Department of Fair Employment and Housing (“DFEH”) issued guidelines on transgender rights in the workplace.  As this cutting edge area of law continues to develop, employers would be wise to follow the DFEH common sense recommendations which are summarized below:

Do Not Ask Discriminatory Questions

Finding the right employee can be a challenge for employers.   Interviews of prospective candidates can provide helpful insight as to whether the particular candidate is right for the position.  Employers may ask about an employee’s employment history, and may still ask for personal references and other non-discriminatory questions of prospective employees.  However, an employer should not ask questions designed to detect a person’s sexual orientation or gender identity.  The following questions have been identified by the DFEH as off-limits:

  • Do not ask about marital status, spouse’s name or relation of household members to one another; and

  • Do not ask questions about a person’s body or whether they plan to have surgery because the information is generally prohibited by the Health Insurance Portability and Accountability Act (HIPAA).

Apply Dress Codes and Grooming Standards Equally

The DFEH reminds employers that California law explicitly prohibits an employer from denying an employee the right to dress in a manner suitable for that employee’s gender identity.  Any employer who requires a dress code must enforce it in a non-discriminatory manner.  For example, a transgender man must be allowed to dress in the same manner as a non-transgender man.  Additionally, transgender persons should be treated equally as are non-transgender persons.

Employee Locker Rooms/Restrooms

According to the DFEH, employees in California have the right to use a restroom or locker room that corresponds to the employee’s gender identity, regardless of the employee’s assigned sex at birth.  Where possible, employers should provide an easily accessible unisex single stall bathroom for use by any employee who desires increased privacy.  This can be used by a transgender employee or a non-transgender employee who does not want to share a restroom or locker room with a transgender co-worker.

Summary

It is important to note that FEHA protects transgender employees and those employees who may not be transgender, but may not comport with traditional or stereotypical gender roles.

The DFEH’s guidance reminds California employers that a transgender person does not need to have sex reassignment surgery, or complete any particular step in a gender transition to be protected by the law.  An employer may not condition its treatment or accommodation of a transitioning employee on completion of a particular step in the transition.

Ultimately, while not the binding authority, the DFEH’s message is clear—employers should avoid discriminatory conduct, apply procedures consistently, and follow transgender employee’s lead with respect to their gender identity and expression.  The DFEH guidelines are consistent with the Equal Employment Opportunity Commission’s interpretation that Title VII prohibits discrimination based on sexual orientation and gender identity.

© Polsinelli PC, Polsinelli LLP in California