Another Landmark Ruling: Court Says Transgender Discrimination Violates Federal Anti-Bias Law

In what appears to be the first time a federal appeals court has extended the nation's main federal employment discrimination statute to cover transgender and transitioning employees, the 6th Circuit Court of Appeals today ruled that employers cannot discriminate against such employees without violating Title VII. The appeals court also rejected the employer's attempt to claim that its religious beliefs should shield it from such discrimination claims, opening the door for other applicants, employees, and former employees to avail themselves of statutory anti-bias law.

Here are three things employers need to know about today's milestone ruling in Stephens v. R.G. & G.R. Harris Funeral Homes, Inc.

A Federal Appeals Court Has Now Ruled That Title VII Covers Transgender And Transitioning Employees. The facts of the case are fairly straightforward. Aimee Stephens, a transgender woman who was born biologically male, began work as a funeral director for R.G. & G.R. Harris Funeral Homes in Detroit, Michigan in 2007. At the time, she presented as a man and used her then-legal name, William Stephens.

After six years of employment, Stephens presented the owner of the funeral home a letter indicating that she had struggled with a gender identity disorder her entire life. "I have felt imprisoned in my body that does not match my mind, and this has caused me great despair and loneliness," the letter said. "With the support of my loving wife, I have decided to become the person that my mind already is. ... Toward that end, I intend to have sex reassignment surgery. The first step I must take is to live and work full-time as a woman for one year. At the end of my vacation on August 26, 2013, I will return to work as my true self, Aimee Australia Stephens, in appropriate business attire."

The owner of the funeral home, Thomas Rost, fired Stephens in response to the letter. He indicated that he did not think things would "work out." He later justified his decision by saying he has a sincere belief that the Bible teaches that a person's sex is an immutable God-given gift, and that he would be violating God's commands if he were to permit his male-born funeral director to wear women's clothes. He also said that he believed that his customers would be unnecessarily distracted and upset by the situation.

Stephens filed a Title VII gender discrimination claim against the funeral home alleging that she was discriminated against on account of her "sex," but the...