In recent months, the Equal Employment Opportunity Commission has stated its position that Title VII of the Civil Rights Act of 1964 prohibits discrimination on the basis of sexual orientation and gender identity or expression. The EEOC recently filed two lawsuits claiming that Title VII’s protections directly apply to sexual orientation discrimination. Of course, federal courts will ultimately decide whether the law encompasses these categories. Earlier this month in an unpublished decision, the Fourth Circuit Court of Appeals (which includes North Carolina and South Carolina) declined to address the coverage issue in a Title VII claim brought by a transgender employee.

In Finkle v. Howard City, the plaintiff claimed that she was not hired for a police job because she is a transgender female. She sued under Title VII, alleging that this failure to hire constituted sex discrimination under Title VII, although she did not assert the usual sex stereotyping theory used in such cases in the past. Rather than address the Title VII coverage issue, the Fourth Circuit rejected her contentions based on the weight of the evidence presented. The court stated that the evidence of bias was limited to a stray remark made in a memorandum issued months before the hiring decision, and that the plaintiff could not demonstrate that the business reasons provided by the employer for failure to hire were pretext for discrimination.

The Fourth Circuit noted that the defendant never challenged the plaintiff’s ability to sue for sex discrimination based on transgender status, and therefore the court did not address this issue. As the EEOC and private litigants directly focus on the Title VII coverage issue, federal appellate courts will need to weigh in on this question. In the meantime, employers in the Fourth Circuit and other parts of the country remain uncertain over their vulnerability to federal employment discrimination claims based on sexual orientation and transgender status.