Transgender in the workplace

What does it mean to be transgender?
Ask 10 different people and you’ll get 10 different responses as to the meanings of “sexual orientation” and “gender identity.” These terms are commonly referred to in the context of discussing transgender individuals, but their meanings are very different. Sexual orientation is the sex a person is attracted to physically and emotionally, while gender identity is the sex with which the individual feels most comfortable identifying.

Defining “transgender” can be confusing for someone who is not part of the transgender community. The term “transgender” is used as an umbrella description for individuals whose gender identity, gender expression, and/or behavior do not conform to that typically associated with the sex they were assigned at birth. Most individuals who are transgender prefer that the term be used as a description or adjective such as “transgender woman” or “transgender man.” A transgender individual is part of the larger lesbian, gay, bisexual, transgender (“LGBT”) community.

Like all groups of people, transgender individuals have differences as to how they want to be identified. Some prefer to identify with their gender assigned at birth, while others prefer the male or female role to which they relate. There are individuals who dress and behave in a stereotypical male or female way, but do not necessarily identify with it. On the other end of the spectrum, there are those who prefer to dress and behave consistent with the gender role to which they relate.

According to those in the transgender population, there is an inherent desire to move past the physical nature of a person—even the label of “transgender”—and focus on the individual person. In general, there’s a bias toward defining a person based on physical attributes or medical terminology. Until society moves beyond that predisposition and we have expanded reference points, it can be difficult for a transgender individual to feel accepted and understood by peers and coworkers.

Our legal system is evolving
While public awareness and sensitivity to the transgender community is growing, the overall legal system has been slower to evolve, but many state and local municipalities have passed laws to protect transgender individuals from discrimination. While Title VII does not explicitly apply to LGBT individuals, the EEOC and federal courts have said that sex discrimination includes discrimination because an applicant or employee does not conform to traditional gender stereotypes.

The proposed Employment Non-Discrimination Act (ENDA) would extend Title VII’s basic protections to LGBT individuals. The bill has widespread support, but it has yet to pass; however, states have been faster to implement these laws. Twenty-one states and the District of Columbia have passed laws prohibiting employment discrimination based on sexual orientation, and eighteen states and D.C. also prohibit discrimination based on gender identity.

While our lawmakers continue to struggle with developing laws to protect the transgender community from discrimination, the LGBT community and supporters have made significant head way within the federal and state court systems. Importantly, the EEOC has pursued legal action against employers who discriminate on this basis. Macy v. Department of Justice, EEOC Appeal No. 0120120821, set precedent when it held that discrimination against an individual because that person is transgender is, by definition, discrimination based on sex and violates Title VII.

Implications for business owners and managers
Hundreds of companies have enacted policies protecting LGBT employees. Approximately 90% of Fortune 500 companies have implemented nondiscrimination policies that include sexual orientation. More than 50% of those companies have policies that include gender identity. The implementation of this type of policy is a solid investment for all employers, especially given the EEOC’s and private plaintiffs’ heightened focus on discrimination against members of the LGBT community. It is recommended that employers revisit their human resource policies.

Following are some pointers for updating and implementing HR policies that are up to speed with the quickly developing law:

  • Review discrimination and harassment policies. Employers should ensure that they redefine what is considered discrimination. Prohibited discrimination and harassment should include actions based on sexual orientation and gender identity.
  • Know that pre-employment practices fall under discrimination laws, such as the application process, interviewing, testing, background checks, hiring and failure to hire. Although it can be a more challenging area to manage, employers need to make sure that all employees, especially managers and supervisors, understand that their actions and policies extend to the pre-employment process.  
  • Dress code should be gender neutral, allowing for a transgender person to wear clothing that is appropriate with their gender identity. Employers should drop the stereotypical language associated with males and females.
  • Use of gender specific pronouns should be carefully considered (i.e. “he” or “she”, “his” or “hers”, etc.). All employees should be aware of using pronouns that are consistent with the transgender individual’s chosen gender identity.
  • Consider unisex restroom access. Building out or designating a separate restroom and lockers as unisex may be the only acceptable alternative for an employer that has a transgender employee. While expensive, it pales in comparison to fighting a lawsuit.
  • Managing transition periods is probably the most delicate area to manage. Open and honest communication between both the employer/managers and the employee should take place prior to and during the transition. Employers have an obligation to ensure that the workplace is a supportive environment during this time.
  • Privacy is or should be at the discretion of the transgender employee. One person may choose to be very open about their gender identity; others may choose to keep their personal lives private. Both approaches should be respected.
  • HR records should reflect the transgender individual’s gender identity, not the assigned sex. Records, including those relating to retirement accounts, benefits, payroll, etc., should contain the employee’s chosen name. When there is confusion because the chosen name differs from the person’s legal name, an employer should consult with an HR or employment law specialist to ensure that company practices comply with the law.
  • Health insurance/benefits may be available from health care providers to cover health-related matters for transgender individuals, such as transition procedures. Employers should be aware of these issues when choosing a provider.

The Transgender Law Center has drafted a model Transgender Employment Policy that an employer can use to successfully meet the needs of transgender employees.

How does Employment Practical Liability Insurance play a role?
Given the EEOCs heighten focus on transgender issues and the increase in administrative claims, an influx of private lawsuits is sure to follow. Employers should count on an increase in claims based on sexual orientation and/or gender identity. Employment Practices Liability insurance policies offer important protection for employers of all sizes. The standard policy covers claims for discrimination and harassment based on sex and gender; thereby providing coverage for defense costs, settlements and judgments in connection with EEOC charges and lawsuits.

It is important to have an anti-discrimination/harassment policy that includes gender identity and sexual orientation in conjunction with an EPL policy to mitigate exposure in a claim. In some cases, having and implementing a policy can help with the defense of certain discrimination claims.

Accordingly, solid policies and practices along with an EPL policy will provide broader protection.

Be prepared
Any employer, well-intentioned or not, that fails to recognize the rights of transgender individuals may find itself facing a claim. The potential costs of not being prepared are high. Legal fees alone can cost a business tens of thousands of dollars in an area where the law is still developing.

The combination of an EPL policy and up-to-date discrimination policies provides the best protection and preparation to deal with potential liability in the constantly changing work environment.