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On the heels of the Second Circuit’s decision that sexual orientation discrimination violates Title VII, advocates for LGBTQ rights scored another victory in federal court. On March 7, 2018, the Sixth Circuit unanimously ruled in EEOC v. R.G. & G.R. Harris Funeral Homes, Inc. that discrimination on the basis of transgender and transitioning status violates Title VII’s prohibition on sex-based discrimination.

The EEOC brought suit against a funeral home for firing an employee after she disclosed that she would be transitioning from male to female and would dress as a woman at work. The funeral home claimed that allowing the employee to dress as a woman would violate the Religious Freedom Restoration Act (RFRA), which prohibits government enforcement of a religiously neutral law (here, Title VII) if that law substantially burdens the individual’s religious exercise and is not the least restrictive way to further a compelling government interest. Although the district court found direct evidence to support a sex–but not transgender–discrimination claim, the court nevertheless granted summary judgment in favor of the funeral home based on its RFRA defense. Specifically, the court narrowly defined the EEOC’s compelling interest to be ensuring the employee “was not subject to gender stereotypes in the workplace in terms of required clothing at the funeral home,” and found that a gender-neutral dress code would have been a less restrictive way to achieve that interest.

Reversing the district court, the Sixth Circuit found that Title VII protects against transgender and transitioning status discrimination, which “necessarily entails discrimination on the basis of sex.” The Court rejected the funeral home’s RFRA defense, finding that neither customer preferences nor the potential violation of the funeral home owner’s religious beliefs constituted a substantial burden to religious exercise. This determination alone was enough to reverse the district court’s decision. Yet in the interest of “completeness,” the Court further concluded that the EEOC has a broad compelling interest in eradicating and remedying workplace discrimination, a goal that cannot be achieved by anything less restrictive than enforcing Title VII.

The Sixth Circuit’s opinion relies heavily on the analysis of the Second Circuit and Seventh Circuit in two recent cases holding that Title VII prohibits sexual orientation discrimination. With three federal appellate courts now recognizing sexual orientation or gender identity as a protected under Title VII, it seems even more likely that the tide is changing, at least in the federal courts, regarding LGBTQ protections. Employers in all states, particularly those in the Sixth Circuit (Michigan, Kentucky and Ohio), should ensure their employment policies and practices conform with the continued developments in this area of law.

For more information, please contact your Baker McKenzie lawyer.