Under federal law (Title VII), employers cannot discriminate because of one’s sex. While Title VII does not explicitly coverage transgender employees (i.e., someone born female who presents male, and vice-versa; also known as gender identity), the EEOC’s position is that transgender employees are protected too. Indeed, they’ve begun filing federal lawsuits on behalf of transgender employees who claim to have been discriminated against.

But, Courts have not uniformly accepted the EEOC’s position. Indeed, the state of the law here is very much unsettled.

Just before Thanksgiving, a Texas federal court considered whether an employer can discriminate under Title VII based purely on gender identity…and get away with it.

More after the jump…

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In Eure v. Sage Corp., the plaintiff, who was born female, but presented as male, worked for a truck driving school. Allegedly, the plaintiff had no issues at work until a National Project Director for Sage, arrived at the San Antonio campus to conduct specialized training. According to the court’s opinion, the National Project Director told the plaintiff’s supervisor, “What is that and who hired that?” The National Project Director added, “Please don’t tell me that is a Sage instructor” and informed the plaintiff’s supervisor that Sage did not hire “cross genders.” And, after the plaintiff’s supervisor informed the National Project Director that it had been the supervisor’s decision to hire the plaintiff, the National Project Director alleged said, “We will deal with you seriously for hiring that.”

In determining whether these allegations were enough to make out a claim of unlawful discrimination, the Texas court recognized that the U.S. Supreme Court has outlawed sex stereotyping. That is, an employer cannot evaluate employees by assuming or insisting that they match the stereotype associated with their group (e.g., women must never poop wear dresses and make-up, etc.; men must exude Meyer act macho). But the Texas court distinguished between transgender discrimination and bias based on sexual stereotypes:

In some cases, the plaintiffs bringing successful sex stereotyping claims are transgender people, arguing that the discrimination that they have suffered is because their coworkers perceived their behavior or appearance as not “masculine or feminine enough.” However, courts have been reluctant to extend the sex stereotyping theory to cover circumstances where the plaintiff is discriminated against because the plaintiff’s status as a transgender man or woman, without any additional evidence related to gender stereotype non-conformity….discrimination based on transgender status is [not] per se gender stereotyping actionable under Title VII.

Acknowledging that this one is a “difficult case,” the court dismissed the plaintiff’s complaint because the plaintiff “failed to present evidence showing that the discrimination was motivated by her failure to act as a stereotypical woman would.” Therefore, any discrimination the plaintiff suffered was not “because of sex,” which is what Title VII forbids.

A couple takeaways from this case: