In a landmark ruling on Tuesday, a federal appeals court ruled that transgender people can be protected under federal law from discrimination in education.

The Fourth Circuit Court of Appeals decided that the US Department of Education can prohibit anti-transgender discrimination under Title IX, which prohibits sex discrimination in educational settings. As a result, the Department of Education can say that the Gloucester County School Board in Virginia had discriminated against trans student Gavin Grimm when it required him to use the bathroom that reflected his "biological gender" (the gender assigned to him at birth).

Related How most states allow discrimination against LGBTQ people



LGBTQ advocates and the Obama administration say that bans on sex discrimination also protect trans people, because discrimination against trans people is fundamentally rooted in stereotypes surrounding sex. Therefore, trying to force Grimm to use the bathroom that doesn't align with his gender identity violated the federal prohibition on sex discrimination in education, based on the Department of Education's interpretation.

The court sent the case back to a lower court, which will reconsider Grimm's request to be able to use the boys' bathroom in his school based on the appeals court's ruling.

The case could have potential implications not just in Virginia but in North Carolina as well. North Carolina recently passed a controversial anti-LGBTQ law that requires trans people to use the bathroom marked on their birth certificate, which in many cases will force trans people to use the bathroom that doesn't match their identity. Since North Carolina is in the Fourth Circuit, the appeals court's ruling calls into question the state's law.

More broadly, the case could have sweeping repercussions in other aspects of state and federal law. If bans on sex discrimination also protect trans people, then the existing bans on sex discrimination in the Civil Rights Act and Fair Housing Act could protect trans people from discrimination in the workplace and housing as well — two places where most states currently have no explicit protections for LGBTQ people.

Most states don't explicitly ban anti-LGBTQ discrimination

Most states don't ban discrimination based on sexual orientation and gender identity in the workplace, housing, or public accommodations (hotels, restaurants, and other places that serve the general public).

As a result, more than half of LGBTQ Americans, according to the LGBTQ advocacy group Movement Advancement Project, live in a state where an employer can legally fire someone because he's gay, a landlord can legally evict someone because she's lesbian, and a hotel manager can legally deny service to someone who's transgender — for no reason other than the person's sexual orientation or gender identity.

Similarly, most states lack protection for LGBTQ students in schools. This allows school boards and staff to essentially discriminate against LGBTQ students — or at least many states and school officials believe it does. With the Fourth Circuit Court's ruling, it is possible that schools will have to protect at least trans students from discrimination.

But it's possible the schools may have to go even further — protecting all LGBTQ people — if courts take an even broader interpretation of sex discrimination bans.

How a 50-year-old law may protect LGBTQ workers

Advocates argue that the Civil Rights Act, the Fair Housing Act, and Title IX should protect LGBTQ people from discrimination in the workplace, housing, and education, as they do for race, color, national origin, religion, and sex.

It's the last protection — sex — that's relevant here: Advocates say that protections against sex-based discrimination also apply to sexual orientation and gender identity, since discrimination against LGBTQ people is, fundamentally, rooted in expectations of what people of certain sexes should be like. (One caveat: These protections would not apply to public accommodations, since sex isn't covered in federal laws for that area.)

"It's pretty uncontroversial that discriminating against a man that acts too effeminate or a woman that acts too masculine is a form of sex discrimination," the American Civil Liberties Union's Joshua Block previously told me. "That applies to lesbians and gay men, too."

The Equal Employment Opportunity Commission (EEOC), a federal agency that oversees discrimination complaints, has embraced this idea. In 2012, it decided that the Civil Rights Act protects workers from discrimination based on gender identity. Then in 2015, it expanded the protections to sexual orientation.

But since EEOC's rulings don't carry the force of law like court rulings do, its decisions don't mean all LGBTQ workers are protected in the US. So it will take formal court challenges to get courts — particularly the Supreme Court, if a case ends up there on appeal — to consider whether the EEOC's interpretation is correct and potentially redefine federal law.

That's why the Fourth Circuit Court's decision is potentially a huge deal: It's the highest court yet to give legitimacy to this interpretation of federal law.