As I mentioned in a previous post, I am always curious as to how things turn out. But often as an employment lawyer, I am left in a state of ignorance. I give advice to employers on what to do in tricky situations, but don’t always hear whether my advice was implemented (I certainly hope so!) or what resulted (good things, hopefully!). And often I wonder what happens to the parties in high-profile cases – like Bostock v. Clayton County, one of a trio of cases in which the U.S. Supreme Court ruled that Title VII’s prohibition on “sex discrimination” in employment encompasses sexual orientation and gender identity.

The Case – Happily Ever After? Bostock worked for the County for ten years.  He alleged that he was subjected to homophobic comments from his colleagues after he joined a gay softball league, and then fired six months later – because of his sexual orientation. The County asserted that his termination was for poor performance. The question that went all the way up to the Supreme Court was whether he could bring a claim under Title VII for sexual orientation discrimination. And once the Supreme Court said “yes,” the case went all the way back down to the federal trial court to resolve whether Bostock, in fact, had been discriminated against by the County.

Both parties had moved for summary judgment (meaning that they asked the court to rule that they won the case as a matter of law, based on the undisputed facts). The court, however, found that there were facts in dispute that should be decided by a jury. In light of that ruling (and seeking certainty over an unpredictable jury outcome) the parties ended up settling the case earlier this week. Although we don’t know the terms of the settlement, presumably Bostock received some relatively substantial payment. And Bostock and the County can finally put this behind them.

But wait – there’s more!

The EEOC’s Guidance: Following the Supreme Court’s decision, 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. As we reported in our July 2022 E-Update, a federal district court enjoined enforcement of that guidance – but not in all states. However, this month, another federal district court took a broader view of things, and enjoined the guidance across the entire country.

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 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.

Challenges to the Guidance: As we previously explained, the EEOC’s guidance was met with immediate controversy, including from several of the EEOC’s own Commissioners (the Republicans, of course). The Attorneys General of 20 states filed suit (in Tennessee) 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.

Separately, the State of Texas also filed suit (in Texas) challenging the EEOC guidance and also other related guidance from the U.S. Department of Health and Human Services, basically on the same grounds as the other suit.

Under the federal Administrative Procedures Act, when issuing substantive legislative rules 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 legislative rules, for which the agencies failed to engage in the notice and comment process.

The Tennessee federal court agreed with the challengers – and now, the Texas court has added on.

The Court’s Decision: In State of Texas v. Equal Employment Opportunity Commission, the Texas court held that the Supreme Court’s decision established that Title VII protects against discrimination because of sexual orientation or gender identity status, but not necessarily all correlated conduct. The EEOC’s guidance improperly conflated status and conduct (e.g. dress, bathroom and pronouns).

The court also found that, contrary to the EEOC’s argument that the guidance was merely interpretive, the guidance constitutes a substantive, legislative rule requiring the notice and comment process. The court further found that the EEOC had violated its own internal rules, which requires a majority vote on any document that sets forth a new or changed legal position or requires notice and comment. Here, Chair Burrows had issued the guidance unilaterally. The court declared the guidance to be unlawful.

What This Means for Employers: The prior injunction technically applied only in 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 current ruling, finding the guidance to be unlawful, would seem to apply nationwide – and will remain in effect unless the matter is appealed to and reversed (prediction: unlikely) by the U.S. Court of Appeals for the Fifth Circuit, and further to the U.S. Supreme Court.

This ruling is a significant blow against the Biden administration’s anti-discrimination efforts on behalf of LGBTQ+ individuals, but employers can expect the administration to continue to push for such protections through other means. However, they should remember that state and local jurisdictions may have applicable laws and ordinances that provide these protections.

So while Bostock may have had his happy ending, that may not be the case for other LGBTQ+ or transgender employees…