The Equal Employment Opportunity Commission recently ruled for the first time that workers’ claims of discrimination based on transgender status or gender identity are cognizable under Title VII and may be adjudicated through the EEOC’s administrative procedures. In a decision dated April 20, 2012, the EEOC reversed the final decision of the Bureau of Alcohol, Tobacco, Firearms and Explosives ("Bureau"), which had declined to process a job applicant’s complaint of discrimination based on gender identity, change of sex and/or transgender status under Title VII and the EEOC’s regulations. Macy v. Holder, Appeal No. 0120120821 (April 20, 2012).

The job applicant, Mia Macy, a transgender woman, had served as a police detective in Phoenix, Arizona, while known as a man. Around the time that Macy underwent the transition to female, but while still presenting as a man, she interviewed for a position at the Bureau. According to Macy, the director of the lab told her during two separate calls that she would be hired for the position assuming no problems arose during her background check. During her background check, Macy advised the Bureau that she was in the process of transitioning from male to female. Shortly thereafter, the Bureau notified Macy that, due to federal budget reductions, the position was no longer available. In a follow up call to the Bureau’s EEO counselor, Macy was advised that the position was filled by another individual whose background check was further along.

After filing a complaint with the Bureau that alleged discrimination based on sex, gender identity and sex stereotyping, the Bureau advised Macy that it would not process her claims under the EEOC rules, but rather, under the Bureau’s internal procedures (which provide for fewer remedies and do not include appeal rights) because, according the Bureau, the EEOC did not recognize and would not adjudicate a claim for discrimination based on gender identity stereotyping. Macy appealed the Bureau’s determination to the EEOC, which reversed and remanded the Bureau's decision.

The EEOC, relying on federal court decisions that have recognized a “sex stereotyping” theory as a means of establishing discrimination “on the basis of sex” in many scenarios involving individuals who act or appear to act in gender-nonconforming ways, explicitly held that “[w]hen an employer discriminates against someone because the person is transgender, the employer has engaged in disparate treatment ‘related to the sex of the victim.’”

The EEOC's ruling opens the door to discrimination claims based on gender identity or transgender status throughout the country, despite the fact that Title VII does not explicitly cover such claims. Notably, although Congress has introduced a number of bills over the past twenty years seeking to amend Title VII to explicitly bar discrimination based on sexual orientation and/or gender identity, none have passed. The Macy ruling, however, makes clear that the EEOC intends to interpret Title VII protections broadly despite Congress' unwillingness to amend the current statute.