The worlds of transgender versus religious rights collided hard recently when an EEOC action on behalf of a discharged transgender worker ran full force into a Religious Freedom Restoration Act (“RFRA”) defense, and the EEOC lost.  EEOC v. RG&GR Funeral Homes, Inc., Case No. 14-13710 (ED MI August 18, 2016).  The EEOC brought a wrongful discharge claim on behalf of a transgender funeral director who was transitioning from male to female.  The owner of the funeral home acknowledged that he dismissed the employee because the employee planned to dress in accordance with the company’s dress code, but as a woman rather than as a man.  In short, the EEOC argued that the company held the employee to male stereotypes instead of holding the employee to female stereotypes; the employee wanted to wear a woman’s business suit, with a skirt, rather than a man’s business suit, and the company refused.  According to the EEOC, this form of sexual stereotyping against transgender workers violates Title VII.

The company raised a RFRA defense.  It argued that its business was a Christian ministry to grieving people of all faiths and that it believed “the Bible teaches that a person’s sex (whether male or female) is an immutable God-given gift and that it is wrong for a person to deny his or her God-given sex.”  Under RFRA, the government may not substantially burden a person’s exercise of religion (and a closely held, for-profit corporation is a person), unless the government proves that the burden is in furtherance of a compelling governmental interest and is the least restrictive means of furthering that governmental interest.  Here, the company proved that Title VII, as applied in this case, substantially burdened the company’s ability to conduct business in accordance with its religious beliefs; by allowing the employee to dress as a woman the company would be supporting the idea that sex is a changeable social construct.  The EEOC, however, failed to prove that its sex-stereotyping claim was the least restrictive means of furthering Title VII.  Why? Because the EEOC had not explored how the EEOC could accommodate the employer’s religious commitments.  For example, the EEOC had not explored non-gender specific clothing options under the dress code.  The EEOC had insisted that the employee had a right to dress in a stereotypically female manner.

This case hints at strategies for the conciliation process with the EEOC.  If the employer is a private employer, with religious beliefs, the EEOC might have a duty to accommodate those beliefs in its application of Title VII.  The Charging Party has no such obligation and the employee in this case could have pursued a wrongful discharge claim without running into the RFRA defense.