Title VII in Transition - Articles

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Posted by: Edward Phillips & Brandon Morrow on Jun 1, 2018

Journal Issue Date: Jun 2018

Journal Name: June 2018 - Vol. 54, No. 6

Our articles are normally rooted in recent developments in Tennessee law because, after all, this is the Tennessee Bar Journal.  But every now and then, an opinion from the federal courts warrants some literary real estate in this column. The Sixth Circuit’s recent decision in EEOC v. Harris Funeral Homes Inc.[1]  represents just such an opinion. While the case arises outside the boundaries of our state, it no doubt will have implications on Tennessee employers and employees. In Harris, a panel of the Sixth Circuit unanimously held that Title VII protects transgender and transitioning employees.

In Harris, the funeral home terminated Stephens, a funeral director, after she informed the owner that she would be transitioning from male to female and wanted to begin dressing and presenting as female. The owner admitted that he fired the employee because “he was no longer going to represent himself as a man.” The employee filed a discrimination complaint with the Equal Employment Opportunity Commission (EEOC).  Following an investigation, the EEOC brought suit on the employee’s behalf alleging that the funeral home violated Title VII by terminating the employee based on her transgender/transitioning status and refusal to conform to sex-based stereotypes. The EEOC also asserted that the funeral home administered a discriminatory clothing-allowance policy pursuant to which male employees were provided with a clothing allowance but female employees were not.

In response to the funeral home’s motion to dismiss, the district court concluded that transgender status is not, in and of itself, protected under Title VII, but the court allowed the EEOC to proceed with a claim premised on sex- or gender-based stereotyping and expectations based on prior Sixth Circuit precedent.

The parties then filed dueling motions for summary judgment, and the court found in favor of the funeral home. In doing so, the district court concluded that, although there was evidence to support a claim of sex discrimination under Title VII, the funeral home was shielded from liability under the Religious Freedom Restoration Act (RFRA) because of the substantial burden placed on its ability to conduct business in accordance with its owner’s sincerely held religious beliefs and the EEOC’s failure to show that enforcement of Title VII was the least restrictive means of ensuring protection from sex-based stereotyping.  The EEOC then appealed.

Interestingly, Stephens intervened in the appeal on Jan. 26, 2017 — six days after President Trump’s inauguration — because she had concerns that potential policy shifts within the EEOC would prevent the agency from fully representing her interests in the case.

The Sixth Circuit was tasked with addressing three main issues. First, whether the funeral home engaged in unlawful discrimination against Stephens on the basis of her sex. Second, whether the funeral home was entitled to a defense under RFRA based on the owner’s religious beliefs. And third, whether the EEOC’s discriminatory clothing-allowance claim was reasonably expected to grow out of the original charge of sex discrimination that Stephens submitted to the EEOC.

Unlawful Discrimination

On appeal, the Sixth Circuit concluded that the district court was correct in allowing the EEOC’s sex-based stereotyping claim to proceed. However, the Sixth Circuit determined that it was error to conclude that transgender or transitioning status is not protected under Title VII.  On this point, the funeral home argued that transgender status refers to “a person’s self-assigned gender identity” rather than a person’s sex, and therefore such a status is not protected under Title VII. The Sixth Circuit disagreed, noting that, because “an individual’s transgender status is always based on gender-stereotypes,” it is “analytically impossible” to distinguish between discrimination on the basis of sex-based stereotypes and discrimination based on transgender status. The court went on to hold that:

Thus, an employer cannot discriminate on the basis of transgender status without imposing its stereotypical notions of how sexual organs and gender identity ought to align. There is no way to disaggregate discrimination on the basis of transgender status from discrimination on the basis of gender non-conformity, and we see no reason to try.

Consequently, the Sixth Circuit held that “Title VII protects persons because of their transgender or transitioning status, because transgender or transitioning status constitutes an inherently gender-nonconforming trait.”

Religious Defenses

The funeral home argued that the EEOC’s position was rendered meritless by the RFRA, which prohibits the government from enforcing a religiously neutral law against an individual if that law substantially burdens the individual’s religious exercise and is not the least restrictive way to further a compelling government interest. Additionally, amici parties urged the Sixth Circuit to alternatively hold that Stephens fell within the “ministerial exception” to Title VII, thus taking her claim outside of the Act’s purview.

The Sixth Circuit rejected the funeral home’s RFRA defense because it determined that the funeral home’s exercise of religion would not be substantially burdened by the employee’s continued employment. Specifically, the court noted that the funeral home’s first alleged burden — that the employee’s dress and presentation would be a distraction to grieving families — was based on presumed biases which cannot be used to establish a substantial burden under the RFRA. In addition, the court determined that the funeral home’s second alleged burden — the choice of providing the employee with female clothing or being forced to leave the business — was a “predicament of [its] own making” because the funeral home was not required to provide any clothing or stipend to any employee. Moreover, the court determined that simply tolerating the employee’s understanding and presentation of her sex and gender identity was not equal to supporting it. 

Finally, the court found, that even if the funeral home could establish a substantial burden on its exercise of religion, the EEOC had a compelling interest in preventing employment discrimination and the enforcement of Title VII was in fact the least restrictive means of achieving that goal.

The ministerial exception to Title VII “preclude[s] application of [employment discrimination laws such as Title VII] to claims concerning the employment relationship between a religious institution and its ministers.”[2] The Sixth Circuit quickly disposed of this defense, holding that the ministerial exception did not apply because the funeral home was not a “religious institution” and Stephens, a funeral director, was not a “ministerial employee.”

Clothing-Allowance Discrimination Claim

The funeral home argued that the EEOC was prohibited from litigating a discrimination claim on the clothing-allowance issue because that was not reasonably connected to Stephen’s charge of discrimination, which centered on her termination. Sixth Circuit precedent dictates that EEOC lawsuits are “limited to the scope of the EEOC investigation reasonably expected to grow out of the charge of discrimination.”[3] The court, however, noted that the causes of action set forth by the EEOC in litigation are not strictly limited to those raised in the charge of discrimination for two reasons. First, often charges of discrimination are filed by laypersons acting without the assistance of counsel, so to limit subsequent related litigation only to those issues raised in the change would undercut the goals of Title VII. Second, the court held that the proper measuring stick is not the charge, but instead the investigation; as long as the causes of action in the lawsuit are related to the investigation, then the claims may proceed. The Sixth Circuit held that the discriminatory clothing-allowance claim was viable, because Stephens’ claim was — and had always been — that she was terminated for her planned change in appearance, which caused the EEOC to investigate the funeral home’s appearance requirements — and clothing allowances — for males and females.

This portion of the opinion is a good reminder that the charge itself does not set strict the parameters for future litigation. Instead, the EEOC investigation, which can spread its tentacles into other related issues that were not necessarily raised in the charge, determines the scope of the litigation.

Conclusion

Some have compared the Harris decision to the recent Second Circuit and Seventh Circuit Court of Appeals decisions extending Title VII protection to sexual orientation.[4] Keep in mind, however, that sexual orientation and gender identity are distinct concepts.  The Sixth Circuit has previously held that Title VII does not cover sexual orientation discrimination,[5] which remains binding precedent — at least for now. Still, the Harris decision is part of the recent trend of courts broadly construing the meaning of “sex discrimination.”  Moreover, the reasoning in Harris (which relies upon the Seventh Circuit reasoning to extend Title VII protection to sexual orientation) would support a request that the Sixth Circuit, sitting en banc, reconsider its exclusion of orientation from Title VII protection in a case with the proper facts.

The funeral home itself may request an en banc reconsideration of the panel’s ruling, but we’ll have to wait and see.  Ultimately, it would not be surprising if the Supreme Court weighed in on this issue. This is the current state of the law, but it is always subject to change.

Notes

  1. 884 F.3d 560 (6th Cir. 2018).
  2. Hosanna-Tabor Evangelical Lutheran Church & Sch. v. EEOC, 565 U.S. 171, 188 (2012).
  3. EEOC v. Bailey Co., 563 F.2d 439, 446 (6th Cir. 1977).
  4. Zarda v. Altitude Express Inc., 883 F.3d 100, 107 (2d Cir. 2018); Hively v. Ivy Tech Cmty. Coll. of Ind., 853 F.3d 339, 340 (7th Cir. 2017).
  5. Vickers v. Fairfield Med. Ctr., 453 F.3d 757, 759 (6th Cir. 2006).

Edward G. Phillips EDWARD G. PHILLIPS is a lawyer with Kramer Rayson LLP in Knoxville, where his primary areas of practice are labor and employment law. He graduated with honors from East Tennessee State University and received his law degree from the University of Tennessee College of Law in 1978 with honors, and as a member of The Order of the Coif. He is a former chair of the Tennessee Bar Association’s Labor and Employment Law Section.

BRANDON L. MORROW is an associate with Kramer Rayson LLP in Knoxville where his primary areas of practice are labor and employment, and litigation. He earned a bachelor’s degree from the University of Tennessee and a law degree from UT College of Law in 2012.