Seyfarth Synopsis: The EEOC published guidance to provide clarity on its interpretation of Title VII protections for LGBTQ+ employees in the wake of the landmark case Bostock v. Clayton County, GA. A recent decision by a federal district court in Texas rejected the EEOC’s interpretation and resulting policies.

On June 15, 2020, the Supreme Court issued its landmark decision in Bostock v. Clayton County, GA, which held that under Title VII, employers are prohibited from terminating employees on the basis of homosexuality or transgender status. In the wake of that opinion, employers and employees alike have wondered what the implications would be on other policies, such as the use of restrooms and employee attire. In State of Texas v. EEOC, 2:21-cv-00194 (N.D. TX), one federal judge decided that the majority in Bostock failed to answer those questions, and precluded the Equal Employment Opportunity Commission (“EEOC”) from issuing guidance on them.

On June 25, 2021, the EEOC issued guidance outlining what the Bostock decision means for LGBTQ+ workers and employers. Among other things, the EEOC guidance states that a covered employer under Title VII: (1) may not discriminate against an employee who does not conform to gender stereotypes; (2) may not require a transgender employee to dress in accordance with the employee’s sex assigned at birth; and (3) may not deny an employee equal access to a bathroom, locker room, or shower that corresponds to the employee’s gender identity. The guidance also takes the position that, in certain circumstances, the use of pronouns or names that are inconsistent with an individual’s gender identity could constitute harassment.

The State of Texas sued the EEOC to challenge the guidance. On October 1, 2022, a district court judge for the Northern District of Texas ruled that because the Supreme Court cabined its definitions and descriptions of “being homosexual” and “being transgender” to status, it was improper for the EEOC to issue a guidance interpreting Bostock to extend to individual conduct such as bathroom access.

The EEOC argued status and conduct “routinely meld in Supreme Court and Title VII cases where a person’s sexual attraction or identification closely correlate to particular conduct.” The Court rejected that argument because in its view the majority in Bostock never held that “‘traits or actions’ categorically merge with the status ‘being’ in every Title VII case.” Because of this, the Court emphasized the Bostock majority’s “express deferral of ‘future cases’ involving dress, bathrooms, pronouns, and healthcare” in ruling that the EEOC overstepped its bounds.

The EEOC also argued that it did not create a substantive rule, it was issuing a guidance to the public, plainly expressing its views as to “the effect of the Supreme Court’s decision in Bostock on their interpretation of Title VII.” The Court disagreed, stating that the EEOC guidance imposes dress-code, bathroom, and pronoun accommodations as “existing requirements under the law” and “established legal positions” which are not required under Title VII according to the Court’s reading of Bostock.

The EEOC is expected to appeal this ruling.

While the question presented in this litigation remains in flux as it relates to Title VII, it is important to remember that several states and cities have protective statutes that prohibit discrimination against transgender employees, including as it relates to the points set forth in the at issue EEOC guidance. In addition to what is legally required, treating transgender employees with equality in the workplace is a best practice standard that increases employee safety and productivity and helps with recruitment, retention, and morale.