Dignity Health, transgender employee settle discrimination suit

A lawsuit by a transgender employee against Dignity Health hospital chain for denying insurance coverage for sex-reassignment surgery and other medical treatment has been settled for $25,000.

The American Civil Liberties Union had represented the employee, Josef Robinson, in a lawsuit contending discrimination based on gender identity violates the federal law against sex discrimination.

The U.S. Supreme Court had planned to address that issue in the case of a transgender Virginia youth whose high school excluded him from boys’ restrooms. But the justices sent the case back to a lower court in March after President Trump withdrew former President Barack Obama’s memo advising school districts to treat students according to their gender identity.

Robinson, meanwhile, had filed for bankruptcy in November. His case was turned over to the trustee of his bankruptcy estate, who reached the $25,000 settlement with Dignity Health in February. U.S. District Judge Yvonne Gonzalez Rogers of Oakland, who had indicated at a hearing in September that she was likely to let Robinson proceed with his claim of sex discrimination, approved the settlement Friday.

Dignity Health declined to comment. The San Francisco company is the largest private hospital chain in California and the fifth largest in the United States. Formerly an arm of the Catholic Church, it owns 39 hospitals, 24 of them church-affiliated.

Robinson was hired in January 2014 as a nurse at a non-church Dignity hospital, Chandler Regional Medical Center in Arizona. Born female but considering himself male, he underwent a double mastectomy in August 2015 and paid $7,450 because his insurance did not cover it, his lawyers said. He has also paid for hormone therapy.

He was scheduled to undergo sex-reassignment surgery in March 2016, at his doctors’ recommendation, but had to cancel it because he couldn’t afford it, and forfeited his cash deposit, his lawyers said.

Dignity’s insurance policies for hospital employees exclude coverage related to “sex transformation surgery.” At the September hearing, Barry Landsberg, a lawyer for the company, told Gonzalez Rogers that the hospital’s policy was gender-neutral because it applied equally to men and women.

“This is a sex-based issue,” the judge told Landsberg. “It couldn’t be more sex-based.”

But Gonzalez Rogers then put the case on hold, to await the Supreme Court’s action in the Virginia case, and did not rule on Dignity’s motion to dismiss Robinson’s suit before approving the settlement.

Bob Egelko is a San Francisco Chronicle staff writer. Email: begelko@sfchronicle.com Twitter: @egelko