Supreme Court Rejects Requirement of Materially Adverse or Significant Changes in Terms and Conditions of Employment to Prove Discriminatory Lateral Transfers

This morning, in a long-awaited decision without any dissents, the Supreme Court reversed the summary judgment dismissal of a sex discrimination lawsuit on the grounds that the plaintiff is not required to prove that an involuntary lateral transfer significantly affected the terms and conditions of her employment.   Muldrow v. City of St. Louis, MO, No. 22-193 (4/17/24).  In particular, the plaintiff alleged that, even though her pay and title remained the same after the transfer, she was denied the use of an unmarked vehicle to use after her shift, was required to sometimes work weekends and no longer worked with higher ranking officers.   “Although an employee must show some harm from a forced transfer to prevail in a Title VII suit, she need not show that the injury satisfies a significance test.”  Nonetheless, the Court observed that the significance of the changed working conditions may be considered in assessing whether the employer intentionally discriminated.  “[A] court may consider whether a less harmful act is, in a given context, less suggestive of intentional discrimination.”

According to the Court’s opinion, when a new commander took over, the plaintiff was involuntarily transferred from a plainclothes officer position in the Intelligence Division (where she had worked for almost 10 years) to a uniformed officer position in another department supervising patrol officers.  The new commander allegedly called her “Mrs.” instead of “Sergeant” and indicated that a male officer was better suited for the Division’s dangerous work.   Her pay and rank remained the same following the transfer.  However, she “no longer worked with high-ranking officials on the departmental priorities lodged in the Intelligence Division” and “also lost access to an unmarked take-home vehicle and had a less regular schedule involving weekend shifts.”   She lost a “prestigious” role for an “administrative” role.  She alleged that she was transferred because of her sex in violation of Title VII.  However, the trial and appellate courts granted judgment to the city employer on the grounds that she had not suffered any materially significant adverse affects from the transfer and she only suffered minor changes in her working conditions.   The  Supreme Court reversed.

The plaintiff’s involuntary “transfer  . . .  implicated “terms” and “conditions” of [her] employment, changing nothing less than the what, where, and when of her police work.”

Title VII makes it unlawful for an employer “to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s race, color, religion, sex, or national origin.” §2000e–2(a)(1).

This “language requires [the plaintiff] to show that the transfer brought about some ‘disadvantageous’ change in an employment term or condition.  . . . . The words ‘discriminate against,’ we have explained, refer to ‘differences in treatment that injure’ employees.”  Title VII “targets practices that “treat[] a person worse” because of sex or other protected trait.”  The Court has clarified in the past that the “terms [or] conditions” statutory language  “is not used ‘in the narrow contractual sense’; it covers more than the ‘economic or tangible.’”  Nonetheless, it limits that kinds of harm that is actionable.  “To make out a Title VII discrimination claim, a transferee must show some harm respecting an identifiable term or condition of employment.”

What the transferee does not have to show, according to the relevant text, is that the harm incurred was “significant.”  . . . . Or serious, or substantial, or any similar adjective suggesting that the disadvantage to the employee must exceed a heightened bar . . . “Discriminate against” means treat worse, here based on sex.  . . . But neither that phrase nor any other says anything about how much worse. There is nothing in the provision to distinguish, as the courts below did, between transfers causing significant disadvantages and transfers causing not-so-significant ones. And there is nothing to otherwise establish an elevated threshold of harm. To demand “significance” is to add words—and significant words, as it were—to the statute Congress enacted. It is to impose a new requirement on a Title VII claimant, so that the law as applied demands something more of her than the law as written. And that difference can make a real difference for complaining transferees. Many forced transfers leave workers worse off respecting employment terms or conditions. (After all, a transfer is not usually forced when it leaves the employee better off.) But now add another question— whether the harm is significant. As appellate decisions reveal, the answers can lie in the eye of the beholder—and can disregard varied kinds of disadvantage.

The Court rejected the employer’s policy argument that removing the significance factor will open the litigation floodgates and discovery issues:

In the City’s view, a significant-injury requirement is needed to prevent transferred employees from “swamp[ing] courts and employers” with insubstantial lawsuits requiring “burdensome discovery and trials.”  . . . . As we have explained, the anti-discrimination provision at issue requires that the employee show some injury.  . . . It requires that the injury asserted concern the terms or conditions of her employment. . . . Perhaps most notably, it requires that the employer have acted for discriminatory reasons—“because of ” sex or race or other protected trait. §2000e–2(a)(1). And in addressing that issue, a court may consider whether a less harmful act is, in a given context, less suggestive of intentional discrimination. So courts retain multiple ways to dispose of meritless Title VII claims challenging transfer decisions. But even supposing the City’s worst predictions come true, that would be the result of the statute Congress drafted.  As we noted in another Title VII decision, we will not “add words to the law” to achieve what some employers might think “a desirable result.” . . . Had Congress wanted to limit liability for job transfers to those causing a significant disadvantage, it could have done so.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Sixth Circuit Affirms Dismissal of All But Two Claims of Religious Discrimination Based on COVID-19 Vaccine Mandate

Last month, the Sixth Circuit affirmed the dismissal of all but two claims filed by employees who claimed that the hospital employer’s initial blanket denial of their religious objections to the COVID-19 vaccine constituted religious discrimination in violation of Title VII and the Ohio Civil Rights Act.   Saval v. MetroHealth System, No. 23-3672 (6^th Cir. 3/20/24).   The employer had reversed its decision and ultimately granted all of the religious exemption requests.  Thus, the employees who remained employed never suffered any concrete injury to justify litigation from “conclusory” allegations of the emotional distress caused over 36 days while they were forced choose between their jobs and their religious convictions or from the employer’s ability to reverse course again in the future.  Several of the employees had resigned before the employer denied the exemption requests, and thus, also lacked any injury from the employer’s initial denial decision.  However, two employees could sue for disparate treatment and failure to accommodate when they resigned more than 18 days after their requests were denied even though the employer had granted some medical exemption requests. 

According to the Court’s opinion, in August 2021, the hospital announced that all employees needed to obtain the vaccine by the end of October unless they requested a valid medical or religious exemption.  The employer received hundreds of exemption requests and stayed the compliance deadline for those employees while it worked through each of the requests.  While the employer granted some medical exemption requests, it denied all of the religious exemption requests in February on the grounds that the employees could not perform their jobs remotely, no reasonable accommodation was available and it would be an undue hardship to the employer.   It gave the employees 45 days to comply, but 36 days later, abruptly changed course on March 15 and granted all of the exemption requests.   Nine employees resigned before that 36^th day and filed suit.  They were joined by 36 other employees who remained employed by the hospital.  The trial court granted the employer’s motion to dismiss for lack of standing (i.e., were still employed and suffered no injury from the temporary denial) and failure to state a claim.  The Court affirmed the dismissal for all but the first two plaintiffs who had resigned after their exemptions had been denied but before the hospital reversed its decision. 

The Court affirmed dismissal for lack of standing because 36 employees did not suffer any injury from the temporary denial of the exemption requests.  It rejected their claims of mental anguish from having to chose between their jobs and their religious beliefs and threat that the employer could reverse its decision again in the future.  The Court found their allegations of past distress to be too conclusory to be actionable and “fears about a future denial were ‘contingent on future events that may never come to pass, which is a much ‘too speculative’ state of affairs ‘to satisfy the well-established requirement that threatened injury must be ‘certainly impending.’”

The Court analyzed the allegations of the first nine employees to determine whether they stated valid claims for constructive discharge -- i.e., whether they were forced to resign.  Six of these nine could not establish constructive discharge because they had resigned before their exemption requests had been denied in February.  An additional employee’s claim was denied because she had never filed a formal exemption request.

The Court’s majority agreed that the first two plaintiffs stated valid claims for constructive discharge because they requested exemptions, those exemptions were denied, they were denied the right to appeal and they were given a date to comply or be fired.   The trial court had determined that they resigned prematurely (albeit more than halfway through the 45 day period), but the Court disagreed.

The Court also reversed the trial court that these plaintiffs failed to state a claim for religious discrimination: “Plaintiffs 1 and 2 allege [the employer] failed to accommodate their religious beliefs by blanket-denying their vaccine exemption requests. They also assert that [it] treated them differently because of their religion.”  The first two employees “just need to plausibly allege that they were denied a religious accommodation and treated differently because of their religion.”

Further, these two employees alleged a plausible claim of failure to accommodate.  “The heart of the failure-to-accommodate claim is that an employer discharges (or otherwise discriminates against) an employee for failing a job-related requirement instead of abiding by its “statutory obligation to make reasonable accommodation for the religious observances” of its employees.”

The Court also found that these two employees plausibly plead a disparate treatment case.  They “alleged that [the employer] categorically denied all religious exemption requests while granting some nonreligious exemption requests—that is, that [it] treated them differently with respect to a condition of employment because of their religion.”

In concurring, one judge questioned whether this was really a constructive discharge case when the employees had been told when they would be terminated and could have sought a preliminary injunction to prevent an unlawful job termination. 

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Title VII Protects HR Employees, Too

Last summer, the Sixth Circuit reversed summary judgments given to two employers on claims brought by human resources employees.   In Briggs v. UC, 11 F.4^th 498 (6^th Cir. 2021), the Court ruled that a jury should evaluate a compensation analyst’s claim of wage discrimination within a college human resources department based on race and gender.  In Jackson v. Genesee County Road Commission, 999 F.3d 333 (6^th Cir. 2021), the Court ruled in favor of a fired HR Director who had advocated on behalf of employees alleging unlawful discrimination and asserted that her termination had been in retaliation for her opposing unlawful discrimination and engaging in those protected activities.  More interestingly, the Court found that Title VII – governing employment discrimination --  protected her role as the EEO Officer in ensuring EEO compliance by the employer’s vendors: as EEO Officer, her “actions could reasonably be viewed as steps to ensure there was no discrimination in hiring both within GCRC and among its vendors, and, thus, were protected activity under Title VII.”

According to the Court's analysis of the plaintiff's allegations in Briggs, the HR department hired a new compensation analyst in 2015 who possessed a college degree but no compensation experience.  She was paid significantly more than the incumbent-plaintiff, who had significant compensation experience but no college degree.   Part of the reason for the disparity was a policy requiring a 5% raise for any promotion and part was to entice her to leave her current position.  Although the manager advocated for an equity adjustment for the plaintiff (who was paid both less than the new peer and also below market) in 2015, the new VP allegedly refused because of his “inconsistent” 2016 performance evaluation (which apparently did not explain objectively the basis for the lower evaluation).  It was implied that the plaintiff had performed only his basic expectations before understanding that advancement came with exceeding expectations.  Ultimately, the manager claimed that he suffered retaliation for advocating on behalf of the plaintiff’s equity adjustment.  The new employee exceeded expectations, was promoted again and ultimately left.  When the plaintiff applied for her former position, the VP apparently revised the job description in an alleged attempt to render him unqualified.  There was also an implication that the VP contended that the plaintiff was not even qualified for his own position.  The VP gave the plaintiff the lowest possible performance bonus.

The Court rejected the employer’s argument that the compensation difference was based on a factor other than sex or race:

no authority supports the concept that an employee’s prior salary or demand for a specific salary is sufficient in isolation to justify a wage differential. Such a rule would simply perpetuate existing sex-based pay disparities and undercut the purpose of the Act—to require that those doing the same work receive the same pay. . . .

Though a defendant need not offer contemporaneously produced evidence of its rationale, there must be evidence in the record proving that the employer’s proffered justification was the reason for the wage differential’s existence. . .

                . .  .

The record does not show beyond dispute that Wittwer’s bachelor’s degree and higher performance ratings than Briggs, or any other specified factors, were the reason for the salary disparity between her and Briggs.   [The employer] has therefore failed to meet its burden of proving that these distinctions were “the reason for the pay disparity.”

The Court also rejected the employer’s argument regarding the new employee’s higher education and better attitude towards self-improvement and working outside the job description because of the lack of documentary evidence regarding the plaintiff’s purported performance issues until after he requested an equity adjustment and because of the lack of evidence that these issues actually motivated the pay disparity.  The Court explained that an employer is required to submit evidence “beyond dispute” from which “a factfinder could conclude that the proffered reasons “in fact” explain the wage disparity—not just that the reasons could explain it.” The Court also found sufficient evidence of pretext in that the employer’s explanation was not credible:

The record contains no contemporaneous evidence that the cited distinctions between Wittwer and Briggs actually motivated their salary disparity, and it contains disputes of fact among [the employer’s] own witnesses as to whether performance is, in practice, a consideration for employees’ base pay. The post-hoc nature of the justifications contained in Stidham’s affidavit further support an inference of pretext, particularly given that several of the statements contradict statements made by Stidham in Briggs’s performance reviews and cannot be squared with the undisputed fact that Stidham recognized Briggs’s pay was below market and requested an equity adjustment for him. “An employer’s changing rationale for making an adverse employment decision can be evidence of pretext.”

The Court also rejected the employer’s honest belief defense on the retaliation claim because the VP could not show a factual basis for her mistaken belief about the incumbent’s qualifications and his experience before being hired by the college and the fact that she pulled the job posting soon after he made his discrimination complaint.   

a reasonable jury could conclude that [the VP’s] alteration of the posting was retaliatory rather than innocent. Contemporaneous e-mails and other evidence suggest that [her] decision-making about Briggs’s complaint and the job posting were linked. Briggs made his complaint on November 8. . . .

Then, on November 13, [she] e-mailed [the manager] directing him to pull the senior compensation analyst job posting. Although in retaliation cases “temporal proximity cannot be the sole basis for finding pretext,” it can be “a strong indicator of pretext when accompanied by some other, independent evidence.”

According to the Court's evaluation of the plaintiff's allegations in Jackson, the employer had fired its HR Director without any explanation or investigation following a number of complaints about her communication skills, including some from individuals who had been investigated and/or counselled by her.   The employer had previously supported all of the actions she had taken.  One of the complaints was from a vendor which incorrectly claimed that she had frozen its payments based on a discrimination complaint it had received from one of its own employees.   The employer’s outside counsel had also complained about her insistence that all communications go through her when he was attempting to meet with witnesses and prepare for hearings, etc.  The employer did not investigate any of the complaints or give her any explanation for why she was being terminated.  Without being able to identify that it had relied only on accurate complaints or on complaints that did not implicate her investigating and remedying unlawful discrimination, the Court found that a jury should determine whether she had been terminated in retaliation for engaging in protected activities.

The opposition clause of Title VII makes it “unlawful . . . for an employer to discriminate against any of his employees . . . because he has opposed any practice made . . . unlawful . . . by this [title.]” 42 U.S.C. § 2000e-3(a). The Supreme Court has held that the term “oppose” should be interpreted based on its ordinary meaning: “[t]o resist or antagonize . . . ; to contend against; to confront; resist; withstand.” . . .

This court and the Supreme Court have imposed limited restrictions on what activity constitutes opposition activity. While the plaintiff’s allegations of protected activity do not need to “be lodged with absolute formality, clarity, or precision,” the plaintiff must allege more than a “vague charge of discrimination.” . . . The plaintiff also must express her opposition in a reasonable manner. Johnson, 215 F.3d at 580. For example, “[a]n employee is not protected when he violates legitimate rules and orders of his employer, disrupts the employment environment, or interferes with the attainment of his employer’s goals.”. . .

. . .the district court held that the opposition clause is limited to conduct that goes beyond the plaintiff’s regular job duties. However, the district court’s assertion is contrary to both the text of the opposition clause and this court’s interpretation of Title VII for two reasons. First, the text of § 2000e-3(a) states that it “shall be an unlawful employment practice for an employer to discriminate against any of his employees,” which suggests that all employees are subject to the same standard. 42 U.S.C. § 2000e-3(a) (emphasis added). The statute also does not state that the employee’s conduct must fall outside of her regular job duties. . . .

                . . . this court has previously allowed plaintiffs to bring a retaliation claim for conduct related to their job responsibilities. . . . In Johnson, the vice president of human resources brought a Title VII claim . . . for allegedly firing him in part because of his advocacy on behalf of minorities related to his management of the university’s affirmative action program. . . . The Johnson court found that “the fact that Plaintiff may have had a contractual duty to voice [his concerns about the affirmative action program] is of no consequence to his claim.” . . . Excluding the vice president from the protection of Title VII would “run[] counter to the broad approach used when considering a claim for retaliation under this clause, as well the spirit and purpose behind Title VII as a broad remedial measure.” . . . The court worried that narrowing the scope of Title VII could create perverse incentives for employers and leave the employees specifically hired to do the often difficult work of combating discrimination with fewer protections than general employees. . . . In sum, both the text of Title VII and our precedent reject the district court’s additional restriction that the opposition clause does not extend to an employee’s regular job duties.

That being said, the Court did not find that all of the plaintiff’s investigations amounted to protected activity because she had not concluded that some of the alleged misconduct was the result of unlawful race discrimination.   Where she had concluded that unlawful race discrimination had occurred, her conduct in that investigation, informing management and negotiating a severance agreement for the offending manager constituted protected conduct.

Interestingly, the Court also found her role as EEO officer in working with vendors (not employees) was similarly protected conduct. “Jackson’s actions could reasonably be viewed as steps to ensure there was no discrimination in hiring both within GCRC and among its vendors, and, thus, were protected activity under Title VII.”

The Court also found sufficient evidence of causation from the temporal proximity of her protected activities (i.e., 2.5 months) and her termination.

The temporal proximity between Jackson’s protected activities and her termination is strong circumstantial evidence. In addition, many of the same people who complained to Daly about Jackson’s communication style were involved either in the negotiations with Bennett, such as Derderian, or communication about EEOPs, such as Plamondon, Peivandi, and two outside vendors. A reasonable juror could infer that these individuals described Jackson’s communication style as offensive and abrasive because they took issue with her handling of the investigation into Bennett’s or Jackson’s efforts to ensure EEOP compliance. Thus, Jackson has met the relatively light burden of demonstrating causation at the prima facie stage.

While there was some evidence supporting the employer’s explanation for her termination, she was also able to produce sufficient evidence of pretext to go to a jury.  Some employees, vendors and Board members contended that they had an excellent relationship with her.  “This evidence contradicts GCRC’s claim that Jackson’s communication style was inflexible and abrasive and could lead a juror to conclude Jackson’s communication style was not the true reason she was fired.”

Furthermore, several of the GCRC employees who complained about Jackson’s communication style also complained about Jackson’s protected activities, so a reasonable juror could conclude that their complaints about Jackson’s style were motivated to some degree by their opposition to her protected activities. . . . Although it is true that some of the employees who complained about Jackson’s communication style were not directly involved in her protected activities, there is enough overlap between the employees who complained to Daly and the individuals objecting to Jackson’s protected activities to call into question the strength of GCRC’s nondiscriminatory proffered reason.

  NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Supreme Court: Sex Discrimination Under Title VII Includes Discrimination Against Sexual Orientation and Transgender Because You Cannot Have One without the Other.

This morning, with a 6-3 decision, the Supreme Court issued a long-awaited and lengthy decision (with even lengthier dissents) on the coverage of Title VII’s prohibition on sex discrimination and held “[a]n employer who fires an individual for being homosexual or transgender fires that person for traits or actions it would not have questioned in members of a different sex.” Bostock v. Clayton County, No. 17-1618 (6-15-20).  This decision covered three different appellate court appeals, including affirming an earlier decision from the Sixth Circuit (involving the termination of a funeral home employee who announced an intention to transition) previously discussed here.  In short, “if changing the employee’s sex would have yielded a different choice by the employer—a statutory violation has occurred.” That being said, Justice Gorsuch highlighted that it is still legal to discriminate on the basis of sports affiliations (sorry Xichigan fans) unless the sports affiliation is tolerated for one sex and not the other.  The decision also left open issues relating to other terms and conditions of employment and the validity of religious objections under the Religious Freedom Restoration Act (which had been rejected but not appealed in the Sixth Circuit opinion).   


The Court did not elaborate much on the differing facts of the three cases: “An employer fired a long-time employee shortly after the employee revealed that he or she is homosexual or transgender—and allegedly for no reason other than the employee’s homosexuality or transgender status.” Two of the original plaintiffs had died while the cases were pending.  Two of them won on appeal and one had lost.


The Court rejected arguments that the original legislation did not anticipate that sex would be construed to include sexual orientation, etc.:

Those who adopted the Civil Rights Act might not have anticipated their work would lead to this particular result. Likely, they weren’t thinking about many of the Act’s consequences that have become apparent over the years, including its prohibition against discrimination on the basis of motherhood or its ban on the sexual harassment of male employees. But the limits of the drafters’ imagination supply no reason to ignore the law’s demands.  When the express terms of a statute give us one answer and extratextual considerations suggest another, it’s no contest.  Only the written word is the law, and all persons are entitled to its benefit.

Even if sex were construed to only mean biological distinctions from male and female, this did not resolve the dispute.

The question isn’t just what “sex” meant, but what Title VII says about it.  Most notably, the statute prohibits employers from taking certain actions “because of ” sex.  And, as this Court has previously explained, “the ordinary meaning of ‘because of ’ is ‘by reason of’ or ‘on account of.’ . . . . In the language of law, this means that Title VII’s “because of ” test incorporates the “‘simple’” and “traditional” standard of but-for causation. . . .

 . . .When it comes to Title VII, the adoption of the traditional but-for causation standard means a defendant cannot avoid liability just by citing some other factor that contributed to its challenged employment decision.  So long as the plaintiff ’s sex was one but-for cause of that decision, that is enough to trigger the law.

No doubt, Congress could have taken a more parsimonious approach. As it has in other statutes, it could have added “solely” to indicate that actions taken “because of ” the confluence of multiple factors do not violate the law.  Cf. 11 U. S. C. §525; 16 U. S. C. §511.  Or it could have written “primarily because of ” to indicate that the prohibited factor had to be the main cause of the defendant’s challenged employment decision. Cf. 22 U. S. C. §2688.  But none of this is the law we have. If anything, Congress has moved in the opposite direction, supplementing Title VII in 1991 to allow a plaintiff to prevail merely by showing that a protected trait like sex was a “motivating factor” in a defendant’s challenged employment practice.  Civil Rights Act of 1991, §107, 105 Stat. 1075, codified at 42 U. S. C. §2000e–2(m). Under this more forgiving standard, liability can sometimes follow even if sex wasn’t a but-for cause of the employer’s challenged decision.

The Court refused to consider how groups of people are treated in general.  Some have argued that because discrimination on the basis of sexual orientation, etc. affects both men and women equally that it cannot be illegal under Title VII.   However, Title VII prevents discrimination against individuals, so the  Court would only consider how one person was treated based on sex, not the population as a whole:

The statute answers that question directly. It tells us three times—including immediately after the words “discriminate against”—that our focus should be on individuals, not groups: Employers may not “fail or refuse to hire or . . . discharge any individual, or otherwise . . . discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s . . . sex.” §2000e–2(a)(1) (emphasis added). . . . .

The consequences of the law’s focus on individuals rather than groups are anything but academic. Suppose an employer fires a woman for refusing his sexual advances.  It’s no defense for the employer to note that, while he treated that individual woman worse than he would have treated a man, he gives preferential treatment to female employees overall. The employer is liable for treating this woman worse in part because of her sex. Nor is it a defense for an employer to say it discriminates against both men and women because of sex.  This statute works to protect individuals of both sexes from discrimination, and does so equally. So an employer who fires a woman, Hannah, because she is insufficiently feminine and also fires a man, Bob, for being insufficiently masculine may treat men and women as groups more or less equally.  But in both cases the employer fires an individual in part because of sex.  Instead of avoiding Title VII exposure, this employer doubles it.

An employer violates Title VII when it intentionally fires an individual employee based in part on sex. It doesn’t matter if other factors besides the plaintiff ’s sex contributed to the decision. And it doesn’t matter if the employer treated women as a group the same when compared to men as a group.  If the employer intentionally relies in part on an individual employee’s sex when deciding to discharge the employee—put differently, if changing the employee’s sex would have yielded a different choice by the employer—a statutory violation has occurred. Title VII’s message is “simple but momentous”:  An individual employee’s sex is “not relevant to the selection, evaluation, or compensation of employees.”  (bolding added for emphasis).

The statute’s message for our cases is equally simple and momentous:  An individual’s homosexuality or transgender status is not relevant to employment decisions. That’s because it is impossible to discriminate against a person for being homosexual or transgender without discriminating against that individual based on sex.  Consider, for example, an employer with two employees, both of whom are attracted to men.  The two individuals are, to the employer’s mind, materially identical in all respects, except that one is a man and the other a woman. If the employer fires the male employee for no reason other than the fact he is attracted to men, the employer discriminates against him for traits or actions it tolerates in his female colleague.  Put differently, the employer intentionally singles out an employee to fire based in part on the employee’s sex, and the affected employee’s sex is a but-for cause of his discharge. Or take an employer who fires a transgender person who was identified as a male at birth but who now identifies as a female. If the employer retains an otherwise identical employee who was identified as female at birth, the employer intentionally penalizes a person identified as male at birth for traits or actions that it tolerates in an employee identified as female at birth. Again, the individual employee’s sex plays an unmistakable and impermissible role in the discharge decision.

The Court also rejected a defense based on other factors that contributed to the discharge decisions if the employees still would not have been fired but for consideration of their sex.

Nor does it matter that, when an employer treats one employee worse because of that individual’s sex, other factors may contribute to the decision.   . . . When an employer fires an employee because she is homosexual or transgender, two causal factors may be in play— both the individual’s sex and something else (the sex to which the individual is attracted or with which the individual identifies).  But Title VII doesn’t care. If an employer would not have discharged an employee but for that individual’s sex, the statute’s causation standard is met, and liability may attach.

 . . . .intentional discrimination based on sex violates Title VII, even if it is intended only as a means to achieving the employer’s ultimate goal of discriminating against homosexual or transgender employees.  There is simply no escaping the role intent plays here: Just as sex is necessarily a but-for cause when an employer discriminates against homosexual or transgender employees, an employer who discriminates on these grounds inescapably intends to rely on sex in its decisionmaking.  Imagine an employer who has a policy of firing any employee known to be homosexual. The employer hosts an office holiday party and invites employees to bring their spouses. A model employee arrives and introduces a manager to Susan, the employee’s wife. Will that employee be fired? If the policy works as the employer intends, the answer depends entirely on whether the model employee is a man or a woman.  To be sure, that employer’s ultimate goal might be to discriminate on the basis of sexual orientation.  But to achieve that purpose the employer must, along the way, intentionally treat an employee worse based in part on that individual’s sex.

The Court also rejected the equal opportunity offender approach:

An employer musters no better a defense by responding that it is equally happy to fire male and female employees who are homosexual or transgender. Title VII liability is not limited to employers who, through the sum of all of their employment actions, treat the class of men differently than the class of women. Instead, the law makes each instance of discriminating against an individual employee because of that individual’s sex an independent violation of Title VII. So just as an employer who fires both Hannah and Bob for failing to fulfill traditional sex stereotypes doubles rather than eliminates Title VII liability, an employer who fires both Hannah and Bob for being gay or transgender does the same.

 . . . For an employer to discriminate against employees for being homosexual or transgender, the employer must intentionally discriminate against individual men and women in part because of sex. That has always been prohibited by Title VII’s plain terms—and that “should be the end of the analysis.

The Court then reviewed some of its prior cases where it has construed “sex” broadly to include pregnancy, motherhood, and same-sex harassment. It provided some lessons from these cases:

First, it’s irrelevant what an employer might call its discriminatory practice, how others might label it, or what else might motivate it. . . . .

Second, the plaintiff ’s sex need not be the sole or primary cause of the employer’s adverse action. . . . .

Finally, an employer cannot escape liability by demonstrating that it treats males and females comparably as groups.

The Court also rejected the dissent’s argument that Congress could have included sexual orientation, etc. if it had wanted to do so.

We agree that homosexuality and transgender status are distinct concepts from sex. But, as we’ve seen, discrimination based on homosexuality or transgender status necessarily entails discrimination based on sex; the first cannot happen without the second. Nor is there any such thing as a “canon of donut holes,” in which Congress’s failure to speak directly to a specific case that falls within a more general statutory rule creates a tacit exception.  Instead, when Congress chooses not to include any exceptions to a broad rule, courts apply the broad rule. And that is exactly how this Court has always approached Title VII. “Sexual harassment” is conceptually distinct from sex discrimination, but it can fall within Title VII’s sweep.

The Court refused to address the ramifications of its decision in other contexts, such as gender-specific restrooms and religious objections:

The employers worry that our decision will sweep beyond Title VII to other federal or state laws that prohibit sex discrimination. And, under Title VII itself, they say sex-segregated bathrooms, locker rooms, and dress codes will prove unsustainable after our decision today.  But none of these other laws are before us; we have not had the benefit of adversarial testing about the meaning of their terms, and we do not prejudge any such question today.  Under Title VII, too, we do not purport to address bathrooms, locker rooms, or anything else of the kind. The only question before us is whether an employer who fires someone simply for being homosexual or transgender has discharged or otherwise discriminated against that individual “because of such individual’s sex.” As used in Title VII, the term “‘discriminate against’” refers to “distinctions or differences in treatment that injure protected individuals.”  Burlington N. & S. F. R., 548 U. S., at 59. Firing employees because of a statutorily protected trait surely counts. Whether other policies and practices might or might not qualify as unlawful discrimination or find justifications under other provisions of Title VII are questions for future cases, not these.

Separately, the employers fear that complying with Title VII’s requirement in cases like ours may require some employers to violate their religious convictions.  We are also deeply concerned with preserving the promise of the free exercise of religion enshrined in our Constitution; that guarantee lies at the heart of our pluralistic society. But worries about how Title VII may intersect with religious liberties are nothing new; they even predate the statute’s passage. As a result of its deliberations in adopting the law, Congress included an express statutory exception for religious organizations. §2000e–1(a).  This Court has also recognized that the First Amendment can bar the application of employment discrimination laws “to claims concerning the employment relationship between a religious institution and its ministers.” Hosanna-Tabor Evangelical Lutheran Church and School v. EEOC, 565 U. S. 171, 188 (2012). And Congress has gone a step further yet in the Religious Freedom Restoration Act of 1993 (RFRA), 107 Stat. 1488, codified at 42 U. S. C. §2000bb et seq. That statute prohibits the federal government from substantially burdening a person’s exercise of religion unless it demonstrates that doing so both furthers a compelling governmental interest and represents the least restrictive means of furthering that interest. §2000bb–1.  Because RFRA operates as a kind of super statute, displacing the normal operation of other federal laws, it might supersede Title VII’s commands in appropriate cases.  See §2000bb–3.

But how these doctrines protecting religious liberty interact with Title VII are questions for future cases too.  Harris Funeral Homes did unsuccessfully pursue a RFRA-based defense in the proceedings below. In its certiorari petition, however, the company declined to seek review of that adverse decision, and no other religious liberty claim is now before us. So while other employers in other cases may raise free exercise arguments that merit careful consideration, none of the employers before us today represent in this Court that compliance with Title VII will infringe their own religious liberties in any way.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Divided Sixth Circuit Permits Rescission of Severance Agreement Release When Severance Pay Was Tendered Back A Few Weeks After Sex Discrimination Lawsuit Was Filed

Yesterday, a divided Sixth Circuit reversed an employer’s summary judgment on pregnancy and sex discrimination claims despite the fact that the plaintiff had signed a severance agreement and release in exchange for severance pay which she did not return until more than a year later -- after the EEOC investigation and a few weeks after she filed a lawsuit against her former employer.  McClellan v. Midwest Machining, Inc., No. 17-1992 (6^th Cir. 8-16-18).   The trial court found that the plaintiff’s release of claims had not been knowing and voluntary because she had been pressured to sign the release in the same meeting where she was terminated.  Although the trial court concluded that she had been required to tender back the severance pay before filing suit, the Sixth Circuit disagreed.  It found that, by returning the severance pay and revoking the agreement within weeks of when her attorney was informed of the agreement’s existence, she had satisfied the tender-back rule, if it even applied to bar federal discrimination claims.  Rather, the amount of severance could be deducted from any monetary award that she received during the litigation.

According to the Court’s opinion, the plaintiff had worked in inside sales for the defendant employer for eight years with no disciplinary actions.  In August, she announced that she was pregnant and her supervisor appeared annoyed when she missed work for pre-natal appointments.  In November, she was called into the president’s office, informed that she was being terminated and that she would only get severance pay if she signed the severance agreement and release that day.  Although the president reviewed the terms with her, he did so quickly and shot down her questions about the amount of her accrued vacation pay.  The Release apparently did not explicitly mention that it covered claims of discrimination because she testified that she thought that that it only applied to wage claims. 

She later filed an EEOC Charge and retained an attorney, who filed a complaint asserting claims for pregnancy discrimination, pay discrimination and a sex-segregated workplace.  When the employer notified her attorney about the severance agreement, the plaintiff sent a letter to the employer rescinding the agreement and enclosing a check in the full amount of the severance pay that she had received.   The employer returned her check on the grounds that there was no legal basis for rescinding the agreement. 

The trial court denied the employer’s motion for summary judgment on the grounds that there were disputed questions of fact as to whether the plaintiff’s signature on the severance agreement release had been knowing and voluntary in light of the economic and other pressure she felt to sign the agreement during the termination meeting and the lack of clarity about the release encompassing discrimination claims.    However, the trial court granted the employer’s summary judgment motion on the grounds that even if the severance agreement had been voidable on grounds of involuntariness or duress, the common law tender back doctrine required her to return the consideration that she received prior to filing her lawsuit, not after, or she would be found to have ratified the severance agreement by retaining the consideration.

The Sixth Circuit reversed.  In its only prior reported decision applying the tender-back doctrine to a federal employment discrimination release, the court held that the tender back doctrine did not apply to a release of age discrimination claims under ADEA.  Raczak v. Ameritech Corp., 103 F.3d 1257 (6th Cir. 1997) (relying on Supreme Court decision in Hogue under the FELA).  The Supreme Court later refused to enforce a defective ADEA waiver (which did not comply with the OWBPA) even though the plaintiff had similarly failed to tender back the consideration that he had received prior to filing his ADEA lawsuit.  Oubre v. Entergy Operations, Inc., 522 U.S. 422 (1998).   The only other Circuit to address the issue to a Title VII claim had likewise found that the tender-back doctrine would not bar a lawsuit.  The Sixth Circuit found the same policy considerations applied to prevent applying the tender-back rule to federal sex discrimination claims.

In sum, we conclude that the language and reasoning of Oubre and Hogue apply equally to claims brought under Title VII and the EPA.  In Oubre, the Supreme Court was worried about “tempt[ing] employers to risk noncompliance . . . knowing it will be difficult to repay the moneys and rely[] on ratification.”  522 U.S. at 427.  Similarly, we worry that requiring recently discharged employees to return their severance before they can bring claims under Title VII and the EPA would serve only to protect malfeasant employers at the expense of employees’ statutory protections at the very time that those employees are most economically vulnerable.  We therefore hold that the tender-back doctrine does not apply to claims brought under Title VII and the EPA.  Rather, as the Supreme Court said in Hogue, “it is more consistent with the objectives of the Act to hold . . . that . . . the sum paid shall be deducted from any award determined to be due to the injured employee.”  390 U.S. at 518.

In any event, the Court found that the plaintiff’s return of the $4,000 severance pay more than a year after she had been fired and only a few weeks after she filed her lawsuit was sufficient to rescind the severance agreement.  “[F]ederal law does not require that the tender back be before, or contemporaneous with, the filing of the original complaint.” 

The Oubre majority, however, held that the party “elect[ing] avoidance” may tender back any benefits received under the severance agreement not only before filing suit, but at any point “within a reasonable time after learning of her rights.”  522 U.S. at 425 (emphasis added).  This comports with the Restatement of Contracts, which provides that “[t]he power of a party to avoid a contract for . . . duress . . . is lost if, after the circumstances that made it voidable have ceased to exist, he does not within a reasonable time manifest to the other party his intention to avoid it.”  Restatement (Second) of Contracts § 381(1) (1981) (emphasis added).

Accordingly, even if Plaintiff were required to tender back the consideration, she was required to do so not before filing suit but within a “reasonable time” after she discovered that the severance agreement revoked her right to bring a discrimination claim.  And given the district court’s factual finding that Plaintiff “did not understand she had given up her right to sue for discrimination” until engaging counsel to represent her in this matter, (R. 33, Second S. J. Order, PageID # 231), and that her counsel drafted a complaint immediately after speaking with her, it stands to reason that Plaintiff’s offer to tender back the consideration fell “within a reasonable time after learning of her rights,” Oubre, 522 U.S. at 425.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can be changed or amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.  

Sixth Circuit Affirms City's Judgment But Reversed Union's Judgment in Case Alleging Discriminatory Layoffs

This week there have already been three interesting decisions.  In one, the Sixth Circuit absolved a City of discrimination for accommodating a union demand to layoff one group of employees over another, but pulled the union back into the litigation for potential discrimination liability for making that demand in the first place.   Peeples v. City of Detroit, No. 17-222 (6^th Cir. 2018). The Court refused to let plaintiffs alleging race discrimination “piggyback” on the only timely EEOC Charge which resulted in a right-to-sue letter when that charge alleged only national origin discrimination.  It also refused to find statements made by a city employee about the union’s purported motivation as direct evidence.  It also found no circumstantial evidence of discrimination based only on statistics which did not attempt to show significant deviations from non-discriminatory factors, like seniority, and which were based on small sample size.  The Court, however, found that the plaintiffs did not need to show that the union breached its duty of fair representation in order to sue the union under Title VII.

According to the Court’s opinion, the City of Detroit instituted layoffs in advance of filing for bankruptcy protection.  It announced the layoff list based on city-wide seniority, but the fire department union objected on the grounds that it should be based on department seniority and filed a grievance. The City ultimately resolved the grievance by granting the union’s request.   The distinction resulted in the layoff of more minority officers under the union’s proposal than the City’s plan.  After four EEOC Charges followed, the fire union relented and agreed to the City’s initial plan.  The City ended up re-hiring the affected employees 80 days later and giving them full back pay, missed overtime pay and medical benefits.  Nonetheless, even though only one of the plaintiffs had obtained a right-to-sue letter from the EEOC, eleven of the affected minority employees brought suit against the City and the Union, seeking compensatory and punitive damages.

The Court addressed whether all of the plaintiffs could piggy back onto the one plaintiff’s right-to-sue letter.  Sadly for the plaintiffs, they did not raise any arguments to rebut the failure-to-exhaust remedies argument raised in the City’s summary judgment motion and, thus, were limited in what could be argued on appeal.   The only plaintiff to obtain a right-to-sue letter asserted only a national origin discrimination claim and the remaining plaintiffs were asserting racial discrimination.  The Court found that they were not substantially related claims, and thus the race claims could not piggyback onto an EEOC Charge asserting only national origin discrimination.

The Court also rejected the plaintiff’s claim of direct evidence of discrimination.  One of the plaintiffs testified in deposition that he heard a City employee state that he concluded the union was trying to protect the “white boys” from layoff.    This was not direct evidence of discrimination because it was a city employee explaining the union’s motivation and required an inference that the City endorsed that motive.  It also likely hearsay, but the Court did not ultimately resolve that issue.  

The Court also rejected the plaintiffs’ statistical evidence, which was pretty much all that they had to show that they were selected for the layoff on account of their race (in that they were not replaced).  First, they failed to organize their statistics in any meaningful way before the trial court.  Second, the fact that the percentage of white layoffs fell and of minority layoffs rose significantly under the union plan did not, by itself, show impermissible bias.  To prove an inference of bias, “the statistics must show a significant disparity and eliminate the most common nondiscriminatory explanations for the disparity.”  For instance, one could use three standard deviations from hypothetical random chance.   The plaintiffs made no effort to account for seniority differences, for instance.  The City also argued about the sample size (only 27 people) and the other cost-cutting efforts made, including demotions, reductions in overtime and rescinded promotions.   The plaintiffs also made no effort to show the racial composition of the fire department before and after the layoff. “Unless the statistics, standing alone or in comparison, are sufficient to lead the mind naturally to the conclusion sought, they have no probative value; they do not move the proof one way or another.”

The Court also rejected the plaintiff’s damage claim in that they had already received full back pay with the resolution of their grievances. The plaintiffs failed to introduce any evidence disputing that they had already received full back pay.  The union pointed out that they never raised breach of settlement agreement claims based on the resolution of their grievances when they were reinstated.  Accordingly, while they might have some compensatory and punitive damages available under Title VII, their claims for backpay were rejected by the trial and appellate courts.

Finally, the Court rejected the union’s argument that Title VII claims were subject to the same burden of proof as fair representation claims under labor-relations laws, meaning that the plaintiffs need not show that the union breached its duty of fair representation before it could sue them for discrimination under Title VII. Because the union had prevailed on that issue before the trial court, the Sixth Circuit reversed the union’s summary judgment.  

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can be changed or amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Sixth Circuit Reminds Employees that Unfairness is not the Same as Discrimination

Last month, the Sixth Circuit affirmed the dismissal of Title VII discrimination and constructive discharge claims even though the plaintiff was treated unfairly because she could not show that she had been treated differently than a comparable male.  Gosbin v. Jefferson County Commissioners, No. 17-3441  (2/23/18).   The plaintiff had been publicly reprimanded and suspended for “insubordination” even though she had never been explicitly told to take a particular course of action.   The employer’s law firm had also been told to cease working with her or telling her why.  Realizing that she might be fired, she resigned and was replaced almost a year later by a male subordinate who lacked her qualifications.   While the Court agreed that she may have been treated unfairly, that unfairness was not discriminatory in the absence of evidence that she was treated differently than a comparable male.   Her efforts to compare herself to her male predecessor and successor were futile because the employer was unaware of the predecessor’s adoption of the challenged practice and he was paid more than her because he possessed additional professional licenses and responsibilities.  Her successor actually resolved the employer’s concerns taking bids for the hauling work and paying the lowest bidder.  Without a more favorable comparator, she could not prove her prima facie case.  In any event, while she may not have been technically insubordinate in the absence of a specific directive, the employer was still entitled to the honest belief defense because for two months she had continued a practice that they had informed her was legally inappropriate and needed to be corrected by placing the matter out for competitive bidding.

According to the Court’s opinion, the plaintiff had been promoted to department director in 2010 shortly after the long-time director retired.  A few years later, following a complaint and her investigation, the board of county commissioners learned that her predecessor had a verbal hand-shake deal with a local hauler to dump  septic waste at the sewage treatment plant at half-price in return for cleaning up emergency septic spills throughout the county.  While this might be acceptable in the private sector, public sector contracts must be bid so that everyone can compete for the business and opportunities.  She was directed to put the work and opportunities out for public bid.  While she took a few steps towards doing so, she did not discontinue the private arrangement or actually put the emergency septic work out for bid.  Upon learning this two months later, the Board explicitly directed her to cease permitting any haulers to dump until they had approved a policy.   She explained that she thought that they had merely directed her to put the arrangement out for bid, but until the bidding process was complete, that they current arrangement could continue.  Nonetheless, she terminated the arrangement the next day.   The Board then suspended her for 30 days for insubordination.  Following her suspension, her male subordinate took bids for the emergency septic work, and then paid the lowest bidder – the same company as before – for the work instead of letting him dump at half price.  The Board then directed its law firm to cease working with her and not tell her why.    The plaintiff resigned a few months later, was replaced by her male subordinate almost a year later, and brought suit for discrimination and constructive discharge.

The Court initially observed that the employee could not prove a prima facie case of discrimination because she could not identify any comparable male employees who were treated better than her.

In the end, whether deserved or not, there is no proof that the suspension was based on Plaintiff’s gender . . .  Plaintiff must show that the adverse action was not simply unfair, but a pretext for discrimination.  Absent any comparators, the only other evidence is [Commissioner] Gentile’s comment in early 2010 denying that he wanted Plaintiff out of management and his subsequent explanation that “it’s not because you’re a woman.”  But an isolated stray comment, three and one-half years before she was suspended, does not create an inference of discrimination. . . .

Even if Plaintiff had made out a prima facie case,  she has not shown that the Board’s reason for suspending her had no basis in fact, was not the actual reason, or was insufficient to explain the Board’s action.   . . .  Although the Commissioners did not issue a direct “cease and desist” order, they clearly asked Plaintiff to begin a public bidding process to replace the unbid hauling arrangement tout de suite; thus they had an “an honest belief” that Plaintiff did not follow their orders.

The Court also rejected the constructive discharge claim on the grounds that she could not prove any hostility was related to her gender and because the public reprimand and suspension were an insufficient basis for resigning.

NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can be changed or amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.

Sixth Circuit Rejects Religious Objections to Sexual Stereotyping Claims

Earlier this month, the Sixth Circuit rejected an employer’s religious objections to complying with Title VII’s prohibitions against discrimination on the basis of sexual stereotypes.  EEOC v. Harris Funeral Homes, Inc., No. 16-2424.  In that case, the Court unsurprisingly (based on its prior opinions) held that it violated Title VII to terminate an employee who was preparing for sexual reassignment surgery by dressing and presenting as the opposite gender. “Discrimination on the basis of transgender and transitioning status is necessarily discrimination on the basis of sex.”   The Court rejected the employer’s argument that its gender-specific dress code requirements did not violate Title VII.  While not prohibiting outright sex-specific dress codes, the Court noted that the employer could not terminate the plaintiff for refusing to confirm to its “notion of her sex.”  The Court refused the invitation to overrule prior precedent and hold that Title VII covered sexual orientation discrimination.  Nonetheless, the Court ruled that the Religious Freedom Restoration Act did not exempt the employer from Title VII in this situation.  In particular, rejecting the employer’s argument that its grieving patrons would object to the plaintiff, the Court held that “a religious claimant cannot rely on customers’ presumed biases to establish a substantial burden under RFRA.”  The Court also held that toleration of gender identity is not the same as supporting it and mandating toleration is not a substantial burden on a religious practice.   Finally, the Court held that the EEOC had a compelling government interest in enforcing Title VII.

According to the Court’s opinion, the plaintiff had been born male and was hired as a funeral director in 2008.  The plaintiff was fired  in 2013 shortly after informing the defendant employer that he intended upon  returning from his upcoming vacation to transition to a female and begin presenting (and dressing) as a female at work for a year  before surgery.  The owner later testified that gender is a gift from God, that it would violate God’s natural order to change birth gender, and he did not want to be complicit in providing clothing or authorizing a man to dress as a woman while representing his company.   He explained to the plaintiff that the public would not accept his transition to a female.  During the subsequent EEOC investigation, the agency learned that the employer provided its male public facing employees with clothing that conformed to its dress code, but did not provide similar clothing or even an allowance to its public facing female employees.  It brought suit against the employer on behalf of the terminated employee and to challenge the clothing allowance policy.  Although noting that the plaintiff had been fired for failing to conform to gender stereotypes, the trial court granted summary judgment to the employer on both claims.

The employer immediately modified its clothing allowance policy when the lawsuit was filed to provide female employees with a comparable clothing stipend.  It had not had a female funeral director since the owner’s grandmother retired in the 1950’s and only one (unqualified) female applicant had applied for a director position since that time.  The plaintiff’s charge had not raised the clothing allowance issue in her Charge of Discrimination.  Nonetheless, the Court found that the EEOC could still bring a legal challenge to the policy in its lawsuit.

The employer argued that Title VII permits employers to utilize common gender specific dress codes.  Most employers have differing expectations for men and women based on pants, skirts, hair length, jewelry, etc.  However, the Court rejected the argument that Title VII permits gender specific dress codes and noted that the employer’s legal authority pre-dated the Supreme Court’s plurality Price-Waterhouse decision in 1989 which prohibited sex-based stereotyping (when that plaintiff had been passed over for partnership in part for not wearing make up like women are supposed to do).

We are not considering, in this case, whether the Funeral Home violated Title VII by requiring men to wear pant suits and women to wear skirt suits.  Our question is instead whether the Funeral Home could legally terminate Stephens, notwithstanding that she fully intended to comply with the company’s sex-specific dress code, simply because she refused to conform to the Funeral Home’s notion of her sex.

                 . . . .

In short, the Funeral Home’s sex-specific dress code does not preclude liability under Title VII.  Even if the Funeral Home’s dress code does not itself violate Title VII—an issue that is not before this court—the Funeral Home may not rely on its policy to combat the charge that it engaged in improper sex stereotyping when it fired Stephens for wishing to appear or behave in a manner that contradicts the Funeral Home’s perception of how she should appear or behave based on her sex.

The Court also rejected the defendant’s argument that “sex” under Title VII was a binary concept (“which classification arises in a person based on their chromosomally driven physiology and reproductive function”) that did not include transitioning from one to another. The defendant characterized transgender status as a “’a person’s self-assigned ‘gender identity’ rather than a person’s sex.”  “We also hold that discrimination on the basis of transgender and transitioning status violates Title VII.”

First, it is analytically impossible to fire an employee based on that employee’s status as a transgender person without being motivated, at least in part, by the employee’s sex.  The Seventh Circuit’s method of “isolat[ing] the significance of the plaintiff’s sex to the employer’s decision” to determine whether Title VII has been triggered illustrates this point. . . . In Hively, the Seventh Circuit determined that Title VII prohibits discrimination on the basis of sexual orientation—a different question than the issue before this court—by asking whether the plaintiff, a self-described lesbian, would have been fired “if she had been a man married to a woman (or living with a woman, or dating a woman) and everything else had stayed the same.”  Id.  If the answer to that question is no, then the plaintiff has stated a “paradigmatic sex discrimination” claim.  See id.  Here, we ask whether Stephens would have been fired if Stephens had been a woman who sought to comply with the women’s dress code.  The answer quite obviously is no.  This, in and of itself, confirms that Stephens’s sex impermissibly affected Rost’s decision to fire Stephens.

                 . . . .

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.

While Congressional intent in drafting Title VII may not have included this interpretation of Title VII, “to anticipate that Title VII would cover transgender status is of little interpretive value, because “statutory prohibitions often go beyond the principal evil to cover reasonably comparable evils, and it is ultimately the provisions of our laws rather than the principal concerns of our legislators by which we are governed.”  It similarly rejected the argument based on drafting differences that statutes “such as the Violence Against Women Act, expressly prohibit discrimination on the basis of “gender identity,” while Title VII does not.”

 The Court also rejected the argument that because both men and women can be transgendered, it cannot constitute discrimination to treat transgendered individuals the same.

Because an employer cannot discriminate against an employee for being transgender without considering that employee’s biological sex, discrimination on the basis of transgender status necessarily entails discrimination on the basis of sex—no matter what sex the employee was born or wishes to be.  By the same token, an employer need not discriminate based on a trait common to all men or women to violate Title VII.  After all, a subset of both women and men decline to wear dresses or makeup, but discrimination against any woman on this basis would constitute sex discrimination under Price Waterhouse.

While the employer’s owner is religious, the company is not affiliated with any religious organization, serves patrons of various faiths and hires employees of various (or even no) faiths.  While several amici had argued that the defendant was entitled to Title VII’s ministerial exception, the defendant and the Court agreed that it was not applicable in this situation.

The Court rejected the employer’s RFRA defense on the grounds that complying with Title VII was not a substantial burden on his religious exercise in administering to mourners and that enforcing Title VII in this case is the least restrictive means of furthering a compelling government interest.  The Court opted to treat religious objections in this situation as though they were similar to objections based on working with women or people of a different race.  It also concluded that he was not required to provide clothing to any of his employees and could eliminate that benefit on a non-discriminatory basis.  The employer “is not being forced to choose between providing [the plaintiff] with clothing or else leaving the business; this is a predicament of [his] own making.”

The Funeral Home’s first alleged burden—that [the plaintiff] will present a distraction that will obstruct [his] ability to serve grieving families—is premised on presumed biases. . . . The factual premises underlying this purported burden are wholly unsupported in the record.  [The owner] testified that he has never seen [the plaintiff] in anything other than a suit and tie and does not know how [the plaintiff] would have looked when presenting as a woman. . . . [His] assertion that he believes his clients would be disturbed by [her] appearance during and after her transition to the point that their healing from their loved ones’ deaths would be hindered. . . at the very least raises a material question of fact as to whether his clients would actually be distracted, which cannot be resolved in the Funeral Home’s favor at the summary-judgment stage. . . .

But more to the point, we hold as a matter of law that a religious claimant cannot rely on customers’ presumed biases to establish a substantial burden under RFRA.

                 . . . .

 . . .We could agree that courts should not credit customers’ prejudicial notions of what men and women can do when considering whether sex constitutes a “bona fide occupational qualification” for a given position while nonetheless recognizing that those same prejudices have practical effects that would substantially burden [his] religious practice (i.e., the operation of his business) in this case.  But the Ninth Circuit rejected similar reasoning in Fernandez, and we reject it here.

As for the burden on his religious practice by being required to employ the plaintiff as a public representative of his company, “simply permitting [the plaintiff] to wear attire that reflects a conception of gender that is at odds with [the owner’s] religious beliefs is not a substantial burden under RFRA. . . . . tolerating Stephens’s understanding of her sex and gender identity is not tantamount to supporting it.”  (emphasis added).

 The Court noted that it had required religious organizations to comply with the ObamaCare’s opt-out provisions on the grounds that they were not a substantial burden on their religious practices.

We view the Funeral Home’s compliance with antidiscrimination laws in much the same light.  Rost may sincerely believe that, by retaining Stephens as an employee, he is supporting and endorsing Stephens’s views regarding the mutability of sex.  But as a matter of law, bare compliance with Title VII—without actually assisting or facilitating Stephens’s transition efforts—does not amount to an endorsement of Stephens’s views. Similarly, here, requiring the Funeral Home to refrain from firing an employee with different religious views from Rost does not, as a matter of law, mean that Rost is endorsing or supporting those views. . . . .  Indeed, Rost’s own behavior suggests that he sees the difference between employment and endorsement, as he employs individuals of any or no faith, “permits employees to wear Jewish head coverings for Jewish services,” and “even testified that he is not endorsing his employee’s religious beliefs by employing them.”

At bottom, the fact that Rost sincerely believes that he is being compelled to make such an endorsement does not make it so.

The Court also found that the EEOC had a compelling government interest in preventing workplace discrimination.  “The Supreme Court has already determined that RFRA does not, in fact, “effectuate . . . the First Amendment’s guarantee of free exercise,” id., because it sweeps more broadly than the Constitution demands. . . . We therefore decline to hoist automatically Rost’s religious interests above other compelling governmental concerns.”

The Court also found that enforcing Title VII was the least restrictive means.  “Where an alternative option exists that furthers the government’s interest “equally well,”  . . ., the government “must use it.”    Indeed, “[t]he district court found that requiring the Funeral Home to adopt a gender-neutral dress code would constitute a less restrictive alternative to enforcing Title VII in this case, and granted the Funeral Home summary judgment on this ground.”

The district court’s suggestion, although appealing in its tidiness, is tenable only if we excise from the case evidence of sex stereotyping in areas other than attire.  Though Rost does repeatedly say that he terminated Stephens because she “wanted to dress as a woman” and “would no longer dress as a man,”  . . .the record also contains uncontroverted evidence that Rost’s reasons for terminating Stephens extended to other aspects of Stephens’s intended presentation.  For instance, Rost stated that he fired Stephens because Stephens “was no longer going to represent himself as a man,”  . . ., and Rost insisted that Stephens presenting as a female would disrupt clients’ healing process because female clients would have to “share a bathroom with a man dressed up as a woman,”  . . .  The record thus compels the finding that Rost’s concerns extended beyond Stephens’s attire and reached Stephens’s appearance and behavior more generally.

  . . .

The Funeral Home’s proposed alternative—to “permit businesses to allow the enforcement of sex-specific dress codes for employees who are public-facing representatives of their employer, so long as the dress code imposes equal burdens on the sexes and does not affect employee dress outside of work,”  . . .is equally flawed. . . . the EEOC does have a compelling interest in ensuring that the Funeral Home does not discriminate against its employees on the basis of their sex.  The Funeral Home’s proposed alternative sidelines this interest entirely.

 . . .
To start, the Supreme Court has previously acknowledged that “there may be instances in which a need for uniformity precludes the recognition of exceptions to generally applicable laws under RFRA.” . . .

The Court seemingly recognized Title VII’s ability to override RFRA in Hobby Lobby, as the majority opinion stated that its decision should not be read as providing a “shield” to those who seek to “cloak[] as religious practice” their efforts to engage in “discrimination in hiring, for example on the basis of race.”   . . .

While the Hobby Lobby Court permitted a RFRA exemption to ObamaCare’s contraception mandate, ObamaCare’s statute already provided an exemption mechanism, unlike Title VII’s prohibition on sex discrimination in this case.

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