Since the U.S. Court of Appeals for the Sixth Circuit in 2004's Smith v. Salem first recognized as viable a claim under Title VII of the 1964 Civil Rights Act a transsexual employee alleging discrimination based on the failure to conform to gender stereotypes, the gender nonconformance or "sex stereotyping" theory has spawned a variety of uses in federal employment discrimination cases.

A chief use, and one embraced by the plaintiffs' bar, has been as a tool for gay and lesbian workers frustrated by the non-recognition of sexual orientation as a protected class under federal anti-bias law. Although some courts, including the Sixth Circuit, have carefully parsed such claims and strictly enforced a distinction between gender nonconformance and homosexuality, others have been less demanding.

A recent example of the latter is the U.S. District Court for the Northern of Ohio's decision in Koren v. Ohio Bell Telephone Co. The court there found that a married gay telephone sales consultant raised a triable Title VII sex discrimination claim under the sex stereotyping theory with allegations that he was fired because he uses his husband's last name. The plaintiff's choice to take his spouse's surname was "a 'traditionally' feminine practice" and thus gender nonconforming behavior, the court ruled.

The sex stereotyping theory, which derives from the U.S. Supreme Court's seminal decision in Price Waterhouse v. Hopkins, has been accepted by several other federal appeals courts, under Title VII or other federal laws, since Smith v. Salem, including:

• In the First Circuit, a claim under Title VII by a young working mother passed over for promotion;
• In the Second Circuit, a claim by county election official under Title VII alleging that he was forced to quit due to perception that men have propensity to be sexual harassers;
• In the Third Circuit, a Title VII case brought by a gay employee called "Princess," "Rosebud," and "fag";
• In the Eighth Circuit, a Title VII claim by hotel desk clerk who lacked a pretty, "Midwestern girl" look;
• In the Ninth Circuit, a transsexual professor stated viable claim under Title VII for sex bias based on gender nonconformity;
• In the Tenth Circuit, the court assumed without deciding that a transsexual worker could sue under Title VII for illegal sex stereotyping; and
• In the Eleventh Circuit, a transgender Georgia state employee prevails on an equal protection claim.

However, just last month, in EEOC v. Boh Brothers Construction Co., the Fifth Circuit overturned a jury verdict won by the Equal Employment Opportunity Commission under the sex stereotyping theory, finding insufficient EEOC's evidence on behalf of a male claimant who allegedly was harassed by his male supervisor. The court noted, but left unaddressed, the novel question of whether comments or behavior reflecting gender-based stereotypes can be used to prove same-sex harassment under Title VII.