Federal Court Blocks Enforcement of EEOC Sexual Orientation and Gender Identity Guidance

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In June 2021, the federal Equal Employment Opportunity Commission issued resources on workplace protections for LGBTQ+ employees, including a technical assistance document entitled “Protections Against Employment Discrimination Based on Sexual Orientation or Gender Identity,” which we discussed in a June 16, 2021 E-lert. A federal district court has now enjoined enforcement of that guidance – but not in all states.

What the Guidance Says: Among other things, the guidance takes the following rather aggressive positions:

  • Employers cannot require a transgender employee to dress in accordance with the employee’s sex assigned at birth.
  • Employers may not deny an employee equal access to a bathroom, locker room, or shower that corresponds to the employee’s gender identity.
  • Use of pronouns or names that are inconsistent with an individual’s gender identity could be considered harassment.

In issuing the guidance, the EEOC asserted that it was explaining the Supreme Court’s decision in Bostock v. Clayton County, which held that Title VII’s protections against sex discrimination encompass sexual orientation and transgender status, and was reiterating “the EEOC’s established legal positions on sexual-orientation- and gender-identity-related workplace discrimination issues.” The EEOC contended that the document did “not have the force and effect of law” but was only intended to provide clarity on already-existing requirements.

Challenge to the Guidance: The EEOC’s guidance was met with immediate controversy, including from the Republican EEOC Commissioners, as EEOC Chair Charlotte Burrows had unilaterally issued the document without a Commission vote. The Attorneys General of twenty states filed suit challenging the EEOC guidance, as well as other guidance issued by the Department of Education, on the grounds that the issuance of the guidance did not comply with applicable legal requirements.

Under the federal Administrative Procedures Act, when issuing final agency actions that determine certain rights and obligations, an agency must publish notice of the proposed rule and allow public comments that it must consider before publishing a Final Rule. Non-binding agency interpretations do not have the same legal force and effect, and are therefore not subject to the notice and comment process. In this case, the agencies argued that their guidance were merely interpretive, while the challengers contended that they were final agency actions, for which the agencies failed to engage in the notice and comment process.

The Court’s Decision: A federal district court in Tennessee agreed with the challengers, calling the EEOC’s above-described labels “self-serving.” The court found that the EEOC guidance determined the “rights or obligations” of those subject to Title VII, and thus constituted final agency action. The court stated that, “The Technical Assistance Document purports to speak authoritatively on specific conduct that constitutes discrimination based on sexual orientation and gender identity,” specifically as to the dress, locker room/bathroom, and pronoun issues referenced above. The guidance also invites employees to contact the EEOC if they believe their rights have been violated in this manner.

The court also found that the guidance extends far beyond the limited reach of the Bostock decision, in which the Supreme Court specifically “refused to decide whether ‘sex-segregated bathrooms, locker rooms, and dress codes’ violate Title VII.” The guidance “advance new interpretations of Titles VII … and impose new legal obligations on regulated entities.” Thus, the guidance constitutes a legislative rule that is, by definition, a final agency action. Because the EEOC failed to comply with the required notice and comment process, the court then issued a preliminary injunction precluding enforcement of the guidance by the EEOC against the plaintiff states in order to protect those states from harm pending a determination of the merits of the case.

What This Means for Employers: Technically, the court’s order applies only to those states that challenged the guidance: Tennessee, Alabama, Alaska, Arizona, Arkansas, Georgia, Idaho, Indiana, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, Ohio, Oklahoma, South Carolina, South Dakota, and West Virginia. The injunction will remain in effect in those states until and unless the court comes to a different decision, or the matter is appealed to the U.S. Court of Appeals for the Sixth Circuit, and further to the U.S. Supreme Court. In the remaining 30 states and the District of Columbia, however, the guidance remains in effect, although it is questionable how aggressive the EEOC will be pending resolution of the current case. This ruling is a significant blow against the Biden administration’s anti-discrimination efforts on behalf of LGBTQ+ individuals.