Sixth Circuit Rules that Gender Identity Discrimination is Not Religious Freedom

by Obermayer Rebmann Maxwell & Hippel LLP

On March 7, 2018, the United States Court of Appeals for the Sixth Circuit reversed the dismissal of a gender identity discrimination lawsuit filed by the Equal Employment Opportunity Commission (EEOC)  against a Michigan funeral home under VII of the Civil Rights Act of 1964 (Title VII).  The EEOC brought the case, EEOC v. R.G. & G.R. Harris Funeral Homes, on behalf of Aimee Stephens, a transgender woman, and claimed that the funeral home’s owner terminated Ms. Stephens’ employment for religious reasons after she disclosed her intention to transition from male to female and dress as a woman at work.

The Sixth Circuit, which includes Michigan, Ohio, Kentucky, and Tennessee, has prohibited discrimination based on gender identity under Title VII since its 2004 decision in Smith v. City of Salem, Ohio.  Nonetheless, Ms. Stephens’ case is groundbreaking because it also addressed the impact of the Religious Freedom Restoration Act (RFRA), which mandates that the federal government can only limit religious liberty by the “least restrictive means of furthering a compelling government interest.”  Although the district court found that the funeral home was protected by its religious beliefs, the Court of Appeals reasoned that the compelling governmental interest in eradicating employment discrimination against transgender persons trumps business owners’ theological convictions.

While some legal commentators have compared the Harris decision to the recent Second Circuit and Seventh Circuit Court of Appeals decisions extending Title VII to sexual orientation, it is important to remember that sexual orientation and gender identity are distinct concepts.  In fact, the Sixth Circuit Court of Appeals held that Title VII did not cover sexual orientation discrimination in Vickers v. Fairfield Medical Center, a 2006 decision that remains legally binding precedent.  Still, the Harris decision is part of the recent trend of courts broadly construing the meaning of “sex discrimination” and increasing workplace protections under federal law for employees covered by the LGBT umbrella under federal law.  Given this trend, the Sixth Circuit could reevaluate its stance on sexual orientation discrimination if given the opportunity to reconsider the issue.

The Harris decision also hinged on the fact that irrespective of its owner’s beliefs, the funeral home has virtually no religious characteristics and employs and serves people from all religious backgrounds.  In fact, the funeral home made a concerted effort to avoid offending people of different religions, down to avoiding religious figures in its decoration scheme.  Had the funeral home been affiliated with or operated according to the tenets of a specific faith, Ms. Stephens’ case may have ended differently.  The Court’s reasoning could apply to other businesses that provide services that are associated with religious ceremonies, or that sell religious items, but that do not have an explicitly religious purpose or mission (i.e. wedding caterers or greeting card shops).  It could also apply to categorically secular businesses, like restaurants, that happen to have religious owners.

Stay tuned to HR Legalist for further updates regarding this and other labor relations and employment law matters.  In the meantime, employers with questions about the impact of this decision should contact counsel with expertise in federal, state, and local antidiscrimination law compliance.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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