Court Denies Claim That Transgender Employee Was Terminated Due to Gender- Stereotyping

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By Carrie S. Bryant

 

In EEOC v. R.G. & G.R. Harris Funeral Homes, Inc., No. 14-13710 (E.D. Mich. Aug. 18, 2016), the United States District Court for the Eastern District of Michigan (“the Court”) denied the Equal Employment Opportunity Commission’s (“EEOC”) claim that the employer, R.G. & G.R. Harris Funeral Homes, Inc. (“the Funeral Home”) wrongfully terminated an employee due to sex/gender-stereotyping.

The Funeral Home maintained a dress code that specified that male employees wear pants suits and ties, and female employees wear skirt suits.  In 2013, Amiee Stephens (“Stephens”), funeral director/embalmer at the Funeral Home, submitted a letter to the owner and operator, Thomas Rost (“Rost”), explaining that Stephens was undergoing a male to female gender transition, and Stephens would start to present at work in business attire that was consistent with her gender identity as a female.  The Funeral Home fired Stephens approximately two weeks later because Stephens’ attire would not comply with the dress code.

Stephens filed a charge of discrimination with the EEOC and alleged sex discrimination, claiming discharge due to sex and gender identity in violation of Title VII.  During the course of the charge investigation, the EEOC discovered that the Funeral Home provided work clothes to male employees, but not female employees.  The EEOC ultimately found cause to believe that Stephens was discharged due to Stephens’ sex and gender identity, and the Funeral Home discriminated against its female employees by denying them a clothing benefit that was provided to male employees.

In 2014, the EEOC initiated suit against the Funeral Home, alleging discrimination based on sex in violation of Title VII.  In particular, the EEOC alleged that the Funeral Home fired Stephens because Stephens was transgender, because Stephens was transitioning from male to female, and/or because Stephens did not conform to the Funeral Home’s gender-based expectations (i.e. a gender-stereotyping theory).  In addition, the Funeral Home engaged in an unlawful employment practice, and violated Title VII, by providing work clothes to male employees, but not female employees. 

The Funeral Home sought dismissal of the wrongful termination claim, but the dismissal was denied.  The Court noted that transgender status and gender identity are not currently protected classes under Title VII; therefore, the EEOC could not pursue a claim asserting that a firing based on transgender status constituted a Title VII violation.  Nonetheless, the EEOC could maintain its claim that the Funeral Home terminated Stephens in violation of Title VII under a gender-stereotyping theory of sex discrimination. 

The parties filed cross-motions for summary judgment.  The Court denied the EEOC’s motion, and granted the Funeral Home’s motion, in part.

The Funeral Home Defeated the Gender-Stereotyping Termination Claim By Raising a Religious Freedom Restoration Act Defense.

The EEOC argued that Stephens had the Title VII-protected right to dress as a woman while working at the Funeral Home, in order to express Stephens’ gender identity.  Rost, who made the termination decision, admitted that he terminated Stephens because Stephens intended to “no longer dress as a man” while at work, in violation of the company dress code.  The Court noted that such an admission appeared to constitute direct evidence that the Funeral Home fired Stephens based on sex stereotypes.

The Funeral Home set forth two defenses to the wrongful termination claim.  First, the Funeral Home argued that the sex-specific dress code was permissible under Title VII.  The Court rejected this defense due to a lack of legal authority on the issue.  Even though older cases from other circuits upheld similar dress codes, the Sixth Circuit had not provided guidance on how to reconcile those cases with more recent case law addressing the gender-stereotyping theory of sex discrimination.  Second, the Funeral Home argued that it was entitled to an exemption under the Religious Freedom Restoration Act (“RFRA”).  The RFRA prohibits the government from substantially burdening an individual’s exercise of religion unless the government demonstrates that application of the burden to the person is in furtherance of a compelling governmental interest, and is the least restrictive means of furthering that interest.

As its initial burden under the RFRA, the Funeral Home was required to show that enforcement of Title VII would impose a substantial burden on its efforts to conduct business in accordance with its sincerely-held religious beliefs.  The Funeral Home met its burden.

The Funeral Home is not affiliated with a church, but its mission statement states, in part, that its “highest priority is to honor God in all that we do as a company and as individuals.”  Rost, who owns 94.5% of the shares of the Funeral Home, is also president and the sole officer of the corporation.  Rost is a Christian, and testified that the dress code comports with his religious beliefs.  Rost sincerely believes that a person’s sex is an immutable God-given gift, and a person should not deny their God-given sex.  Rost believes he would be violating God’s commands by allowing a funeral director to deny their sex while acting as a representative of the Funeral Home.  Rost testified that if he were forced to violate his sincerely-held religious beliefs by paying for or permitting his employees to dress inconsistent with their biological sex, Rost would feel significant pressure to sell the Funeral Home and give up his life’s calling of ministering to grieving people as a funeral home owner or director.

The Court found that enforcing Title VII by requiring the Funeral Home to provide a skirt to an employee born a biological male, or allowing such an employee to wear a skirt at work would impose a substantial burden on Rost’s ability to conduct business in accordance with his sincerely-held religious beliefs.

Next, the EEOC was required to show that it had a compelling governmental interest, and chose the least restrictive means to further the interest.  The least restrictive means standard requires the EEOC to show that there are no other means of achieving its desired goal “without imposing a substantial burden on the exercise of religion by the objecting party.” 

The Court assumed, without deciding, that the EEOC met its burden of showing that it has a compelling governmental interest in eliminating workplace discrimination.  Nonetheless, the EEOC did not show that it chose the least restrictive means of furthering its interest.  In other words, the EEOC did not show how requiring the Funeral Home or Rost to allow a funeral director who was born a biological male to wear a skirt suit to work would satisfy the RFRA’s least restrictive means requirement. 

The Court acknowledged that the EEOC did not challenge the Funeral Home’s dress code, and noted, “[i]f the EEOC were truly interested in eliminating gender stereotypes as to clothing in the workplace, it presumably would have attempted to do so.”  The Court asked whether the EEOC could have proposed a gender-neutral dress code as a less restrictive means of furthering its interest.  For instance, the EEOC could have proposed a dress code consisting of a business jacket and pants for all employees.  Rost even testified in his deposition that he believes women can look businesslike and appropriate in pants.  Notably, in this case, the evidence showed that the EEOC did not raise the possibility of any such accommodation or any less restrictive approach, including an approach that more directly supported its goal.  Thus, the EEOC did not meet its burden, and the Funeral Home prevailed on its RFRA defense to Stephens’ termination.

The Court Dismissed the Alleged Discriminatory Work Clothing Allowance Claim.

The Funeral Home provided clothing (suits and ties) to its male employees who interacted with the public, but not its female employees.  It was not until October 2014 that the Funeral Home began providing an annual clothes stipend to its female employees who interacted with the public.

The EEOC asserted a claim that the clothing allowance violated Title VII to the extent that the Funeral Home provided work clothes and/or an allowance to male employees, but not female employees.  The Court dismissed the claim, without prejudice.  While the EEOC’s investigation uncovered possible discrimination regarding the clothing allowance, the claim was not raised by Stephens in the underlying EEOC charge.  Stephens only alleged unlawful termination.  An EEOC complaint is limited to the EEOC’s investigation reasonably calculated to grow out of the charge, and the EEOC did not show how the clothing allowance claim would grow out of a charge about unlawful termination.  Further, Stephens could not allege any harm in this regard because, at all relevant times, Stephens received clothing from the Funeral Home.  For these reasons, the Court noted that the EEOC was not allowed to pursue the clothing allowance claim in the current civil action.  The proper course of action is for a member of the EEOC to file a charge and for a full investigation of the claim to occur.

What Does This Mean for Employers?

As acknowledged by the Court, the R.G. & G.R. Harris Funeral Homes case is “unique.”  Keep in mind, the goal of the gender-stereotyping theory of sex discrimination is to render gender irrelevant to the terms and conditions of employment and employment decisions.  In this case, the employer admitted that gender was a factor in the termination decision, but was ultimately not liable for a Title VII violation.  The employer defeated the Title VII gender-stereotyping claim by asserting a RFRA defense.  This defense will not be available to all employers, or in all matters.  For instance, as the Court noted, in the Sixth Circuit it appears that there cannot be a RFRA defense in a Title VII case brought by an employee against a private employer.  This is so because the RFRA protects individuals from the government’s burden on the free exercise of religion.  In other words, if the employee sues the private employer directly (as opposed to the EEOC suing the employer, as occurred here), the RFRA defense would be unavailable because that would be a case between private parties.

Further, the clothing allowance claim was defeated simply because the claim was not raised in the charge, and it was not reasonably calculated to grow out of the charge.  The Court did not rule that such a claim would be so easily defeated if it were properly brought before the Court. 

As always, employers should remain vigilant in stamping out gender-stereotyping in the workplace.  Employers should implement anti-discrimination training, which covers gender-stereotyping as a form of sex discrimination.  An effective training will require educating employees at all levels of the organization on the meaning of gender-stereotyping, and prohibitions against such conduct.  Giving practical examples of how gender-stereotyping may surface in the workplace would be helpful to create a deeper understanding, and better enable employees to recognize the behavior if it occurs.  Communicating to employees that employment decisions will not be based on gender stereotypes, and ensuring that employment decisions are based on legitimate business reasons is important.  When complaints are received, making an assessment as to whether gender-stereotyping motivated the alleged conduct will be useful.  It will also be important for the employer to consistently enforce the disciplinary provisions of its anti-discrimination policies if such a violation occurs.

This article was written by Carrie S. Bryant who is a member of Detroit SHRM’s Legal Affairs Committee and an attorney of the law firm of Dykema Gossett PLLC, located in its Bloomfield Hills, MI office.  She can be reached at (248) 203-0728 or cbryant@dykema.com.

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