Reactions Mixed on Transgender Bias, Religious Freedom Ruling

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By Jay-Anne B. Casuga

Aug. 19 — The ruling that a Michigan funeral home didn’t violate federal employment bias law by requiring a transgender employee who was transitioning from male to female to wear a man’s suit at work drew praise from religious freedom advocates and strong criticism from civil rights groups.

But employment law attorneys and a professor told Bloomberg BNA Aug. 19 the ruling’s unique facts make it difficult to offer generalizations about its potential impact on other transgender bias cases, whether they’re brought by the Equal Employment Opportunity Commission or private litigants ( EEOC v. R.G. & G.R. Harris Funeral Homes, Inc., E.D. Mich., No. 14-13710, 8/18/16).

“This is a significant victory for religious liberty,” Douglas Wardlow, legal counsel for the Alliance Defending Freedom in Scottsdale, Ariz., told Bloomberg BNA.

The ADF represented R.G. & G.R. Harris Funeral Homes Inc., which won a dismissal of the Equal Employment Opportunity Commission's lawsuit in the U.S. District Court for the Eastern District of Michigan based on an exemption under the Religious Freedom Restoration Act.

“It's also a significant blow to the Obama administration’s attempt to expand Title VII without going through Congress,” Wardlow said, referring to the EEOC’s position that discrimination based on gender identity is sex discrimination under Title VII of the 1964 Civil Rights Act. Title VII contains no express employment protections based on transgender status.

Implications ‘Staggering.'

“The implications of this decision are staggering,” Jay Kaplan, a staff attorney for the American Civil Liberties Union of Michigan's LGBT Project, told Bloomberg BNA. The ACLU of Michigan filed an amicus brief in the case in support of the EEOC.

Kaplan, who called the ruling “disappointing” and “dangerous,” said it may potentially allow business owners to use freedom of religion as a “sword to harm people and discriminate” in non-religious settings. The funeral home in the case wasn’t religiously affiliated and didn’t engage in religious activity, he said.

“Our hope is that the EEOC will appeal this decision to the Sixth Circuit,” Kaplan said.

EEOC spokesperson Justine Lisser told Bloomberg BNA Aug. 19 the agency is “reviewing next steps” in the case.

Michael Eastman, senior counsel and vice president for public policy of the Equal Employment Advisory Council, told Bloomberg BNA the ruling likely won't deter the EEOC from continuing to bring transgender bias cases. The EEAC is a nonprofit employer association in Washington.

“Regardless of what’s in the decision, we don’t expect the EEOC to change its course at all,” Eastman said. “But the agency still has a long way to go before it shows it has judicial acceptance of its theory that Title VII sex discrimination encompasses gender identity bias.”

Court Initially Allowed Sex-Stereotyping Claim

The district court in an earlier ruling rejected the EEOC's interpretation that transgender employees are protected under Title VII.

Nevertheless, the court initially allowed the agency to proceed on a sex-stereotyping theory that the funeral home fired Amiee Stephens, who was transitioning from male to female, because she would fail to conform to a dress code that required men to wear suits.

But the court ultimately dismissed the EEOC’s sex-stereotyping claim because the funeral home established under RFRA that enforcement of Title VII would substantially burden its ability to conduct business based on its owner’s sincerely held religious beliefs.

The court assumed without deciding that protecting employees from workplace sex stereotyping is a compelling government interest. But it said the EEOC failed to prove that Title VII enforcement in the case would be the least restrictive means for furthering that interest.

“If the compelling interest is truly in eliminating gender stereotypes, the court fails to see why the EEOC couldn't propose a gender-neutral dress code at work that would be a less restrictive means of furthering that goal” in the funeral home context, Judge Sean F. Cox wrote.

The EEOC never discussed such an option, instead maintaining Stephens must be allowed to wear a skirt to express her gender identity, the court said.

Ruling Won’t Open Pandora’s Box

The ruling “confirms the principle under the RFRA that religious liberty wins when the government fails to meet its burden to show that it has a compelling reason to restrict religious liberty,” the ADF's Wardlow ADF said.

However, he said the decision “doesn’t open any kind of Pandora’s box.”

The EEOC will have chances in other cases in which employers bring a RFRA defense to show that it can protect workers from sex stereotyping in a manner that is the least restrictive to religious freedom, Wardlow said.

EEOC ‘Might Litigate Differently Next Time.'

Eastman of the EEAC said the case presents “pretty unique factual circumstances” on the narrow issue of sex stereotyping and RFRA.

The court seemed critical of the way the EEOC litigated case, he said. For example, the court observed that the EEOC didn't challenge the funeral home's sex-specific dress code and made conclusory arguments about how allowing Stephens to wear a skirt-suit would be the least religiously restrictive means of combating sex stereotypes.

“I hesitate to draw too much from this particular situation because of the unique factual situation,” Eastman said. “I think the takeaway is that the EEOC might litigate differently next time.”

Michelle Phillips, a management attorney with Jackson Lewis in White Plains, N.Y., told Bloomberg BNA Aug. 19 the case is “good” for employers in the sense that it will require the EEOC to engage in an accommodation process that takes religious beliefs into consideration when trying to resolve discrimination claims.

Arthur Leonard, a law professor at New York Law School who specializes in employment discrimination and LGBT law, said that under precedent in the U.S. Court of Appeals for the Sixth Circuit, the RFRA defense is available only where the plaintiff is the EEOC.

It doesn't apply to lawsuits between private parties, and private litigants bring the “overwhelming majority” of Title VII lawsuits, he said.

“This is really a warning to the EEOC not to bring cases directly against which a RFRA defense can be raised unless the agency makes sure that it can meet the tests of compelling interest and least restrictive alternative,” Leonard said.

In cases where a RFRA defense might be raised, the EEOC “should issue a right to sue letter and encourage the complainant to file suit directly,” he said. The EEOC could then participate in the case as an amicus, presuming that the agency's presence wouldn't make the RFRA defense available, Leonard said.

But Ruling May Present ‘Slippery Slope.'

Kaplan of the ACLU of Michigan said the funeral home itself wasn't religiously affiliated, and the ruling represents a “dangerous slippery slope” that allows an individual's religious beliefs to prevent government entities like the EEOC to enforce civil rights laws.

Even if Congress amended Title VII to include transgender protection, the “ramifications of this decision could still prevent the EEOC from enforcing that protection,” Kaplan said.

Phillips of Jackson Lewis shared a similar viewpoint about how applying RFRA to a non-religious entity based on an owner's sincerely held religious beliefs could present a “slippery slope.”

If all an organization has to do to shield itself from discrimination liability is have someone testify that he or she has sincerely held religious beliefs, that's a “pretty wide catch-all provision,” she said.

“Where do we draw the line under the RFRA?” Phillips asked.

To contact the reporter on this story: Jay-Anne B. Casuga in Washington at jcasuga@bna.com

To contact the editor responsible for this story: Susan J. McGolrick at smcgolrick@bna.com

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