Sex Discrimination, Gender Identity and Title VII: No Limits, or New Boundaries?

Title VII of the Civil Rights Act of 1964 prohibits discrimination in employment "because of ... sex."1 Webster's Dictionary defines "sex" as "either of two divisions of organisms distinguished respectively as male or female." Likewise, courts have interpreted Title VII's prohibition against sex discrimination to mean discrimination against men because they are men and women because they are women. That relatively straightforward idea typically has conjured up some traditional and distinctive images when discussing sex discrimination: a male manager subjecting a female employee to some type of unwanted sexual advance; a woman forced to endure sexual jokes and jeers from male co-workers; a woman denied a position or promotion because she is female.

Title VII of the Civil Rights Act of 1964 prohibits discrimination in employment “because of … sex.”1 Webster’s Dictionary defines “sex” as “either of two divisions of organisms distinguished respectively as male or female.” Likewise, courts have interpreted Title VII’s prohibition against sex discrimination to mean discrimination against men because they are men and women because they are women. That relatively straightforward idea typically has conjured up some traditional and distinctive images when discussing sex discrimination: a male manager subjecting a female employee to some type of unwanted sexual advance; a woman forced to endure sexual jokes and jeers from male co-workers; a woman denied a position or promotion because she is female.

However, the evolving issue of discrimination based upon “gender identity,” which refers to a person’s internal psychological identification as a man or a woman, is challenging both societal and legal concepts of sex discrimination. As many state and local governments pass legislation for the protection of individuals with gender-identity issues, the federal notion of what constitutes sex discrimination appears to be similarly expanding as a result of judicial interpretation of Title VII.

Cases from the Backdrop

One of the first cases to address efforts to expand the boundaries of sex discrimination under Title VII was a 1984 case involving an Eastern Airlines pilot.2 He began his service with the airline as Kenneth Ulane, but was fired when he became Karen Ulane. Ulane was a decorated Vietnam War veteran who had flown for Eastern since his discharge from military service in 1968. Ulane had been diagnosed as a transsexual in 1979, and in 1980 underwent sex reassignment surgery. Following the surgery, the State of Illinois issued a revised birth certificate to Ulane indicating that Ulane was female, and the FAA certified her for flight status as a female. Eastern was unaware of Ulane’s transsexuality, her medical treatments or her psychiatric counseling concerning her transsexualism until she attempted to return to work after her sex reassignment surgery. According to Ulane, Eastern terminated her employment for “no reason other than the fact that she ceased being a male and became a female.”

Ulane filed suit against Eastern claiming that her discharge violated Title VII and alleging that she was discriminated against as a female and as a transsexual. The United States District Court for the Northern District of Illinois determined that Ulane had been fired because she was a transsexual and ruled that discrimination against transsexuals violated Title VII. The district court stated that while the use of the term “sex” did not include “sexual preference,” it did include “sexual identity” as “a physiological question — a question of self-perception; and in part a social matter — a question of how society perceives the individual.” The district court concluded that it was reasonable to hold that the word “sex” in Title VII literally and scientifically applied to transsexuals, even if it did not apply to homosexuals or transvestites.3

Eastern appealed the case to the United States Court of Appeals for the Seventh Circuit. In nullifying the lower court’s decision, the Seventh Circuit relied on two arguments. First, in considering the addition of the word “sex” to Title VII, the court stated that “Congress never considered nor intended that this 1964 legislation apply to anything other than the traditional concept of sex” and that, following congressional intent, “sex should be given a narrow, traditional interpretation.” In addition, the court noted the numerous legislative attempts to include sexual orientation within Title VII’s protection, all of which had failed. The Seventh Circuit therefore held that Title VII did not include protection for transsexuals and stated further that “if the term ‘sex’ as it is used in Title VII is to mean more than biological male or biological female, the new definition must come from Congress.” The appellate court concluded further that Eastern had not discriminated against Ulane because she was a female, but because she was a transsexual — “a biological male who takes female hormones, cross-dresses, and has surgically altered parts of her body to make it appear to be female.” Therefore, because Title VII did not prohibit discrimination against transsexuals, the trial court’s determination was reversed and the Seventh Circuit entered judgment in favor of Eastern.

Despite the holding in Ulane, the issue of gender-identity protection under Title VII did not fade away, and the U.S. Supreme Court added another facet to the discussion with a 1989 decision concerning “sex stereotyping” under Title VII. In Price Waterhouse v. Hopkins,4 a female associate at a national accounting firm had been passed over for partnership. The apparent reasons were her “aggressiveness” and “lack of interpersonal skills.” Some partners described her as “macho” and stated that she “overcompensated for being a woman.” One partner indicated that the plaintiff could have improved her chances of making partner if she would “walk more femininely, talk more femininely, dress more femininely, have her hair styled, and wear jewelry.”

The Supreme Court stated that it did not “require expertise in psychology to know that, if an employee’s flawed ‘interpersonal skills’ can be corrected by a soft-hued suit or a new shade of lipstick, perhaps it is the employee’s sex and not her interpersonal skills that has drawn the criticism.” The Court, ruling for the plaintiff, stated that Title VII reaches claims of discrimination based on “sex stereotyping,” and that “[i]n the specific context of sex stereotyping, an employer who acts on the basis of a belief that a woman cannot be aggressive, or that she must not be, has acted on the basis of gender.” The Court stated further that “we are beyond the day when an employer could evaluate employees by assuming or insisting that they matched the stereotype associated with their group.” Similar to the Seventh Circuit’s reasoning in Ulane, the Court looked to congressional intent as the basis for its decision. The Court stated that “in forbidding employers to discriminate against individuals because of their sex, Congress intended to strike at the entire spectrum of disparate treatment of men and women resulting from sex stereotypes.”

Expansion of the Law

Following Price Waterhouse, homosexual and transgendered employees attempted to use the prohibition against sex stereotyping as a means to achieve some of the legal protections previously denied them under Title VII. While some district courts continue to reject discrimination claims of transsexuals, as the Seventh Circuit did in Ulane, other district courts and some appellate courts have viewed discrimination against transsexuals as sex discrimination based on sex stereotypes or gender-nonconforming behavior. In other words, these courts have treated discrimination against transsexuals as discrimination on grounds that their behavior or appearance did not conform to societal stereotypes for their biological sex.

The Seventh Circuit — the same court that issued the Ulane decision — reinstated a claim in 1997 by twin brothers who alleged they had been harassed for not being masculine enough in their physical appearance, having been called “queer,” “fag” and “bitch” by their co-workers.5 In addition, the federal appeals courts for the First and Ninth Circuits decided similarly argued cases in 1999 and 2001, respectively.6

The United States Court of Appeals for the Sixth Circuit recently issued a decision validating the sex-stereotyping theory of recovery under Title VII for transsexuals.7 Jimmie Smith, a transsexual lieutenant in the Salem, Ohio fire department, kept secret for seven years that his sexual identity was really that of a woman. When Smith began dressing and acting more feminine at work, other firefighters questioned him and commented on his changing masculinity. Smith decided to talk to his supervisor about his condition, and told his supervisor that he would probably undergo a sex-change operation.

When superiors ultimately devised a plan to get rid of Smith, he sued under Title VII for sex discrimination. Smith relied on the Price Waterhouse decision and argued that he was discriminated against because he failed to “act like” a man.

The trial court ruled against Smith, holding that he was trying to disguise what was basically a claim for gender-identity discrimination as a sex-stereotyping claim. However, the Sixth Circuit reversed the decision stating that it could see no difference between Smith’s situation and that of the “aggressive” female manager in the Price Waterhouse case. Specifically, the court stated:

After Price Waterhouse, an employer who discriminates against women because, for instance, they do not wear dresses or makeup, is engaging in sex discrimination because the discrimination would not occur but for the victim’s sex. It follows that employers who discriminate against men because they do wear dresses and makeup, or otherwise act femininely, are also engaging in sex discrimination, because the discrimination would not occur but for the victim’s sex.

In another case, the District Court for the Western District of Pennsylvania recently held that a transgendered sales representative, who filed a lawsuit alleging that he experienced a hostile work environment and was fired unlawfully after he decided to begin presenting himself as a woman, could make a claim against his employer for sex discrimination.8 Based upon the reasoning of Price Waterhouse, the court stated that the employee must demonstrate that “the harasser’s conduct was motivated by a belief that the victim did not conform to the stereotypes of his or her gender.” The court ruled that because the sales representative had provided enough proof to show that his failure to conform to sex stereotypes of how a man should look and behave could have been the catalyst behind his employer’s actions, his claims could survive the company’s request for dismissal.

In one of the broadest readings of Title VII, the federal district court in Washington, D.C., while rejecting the sex-stereotyping theory, appears to have created a new means for recovery for gender-identity claims under Title VII.9 David Schroer was an antiterrorism expert who applied for a position as a terrorism analyst with the Congressional Research Service, an arm of the Library of Congress. Schroer was a 25-year military veteran who was highly qualified for the position. Schroer had spent the last seven and one-half years of his military career with special operations overseas and, after the September 11, 2001 terrorist attacks, was appointed the director of a 120-person classified organization charged with tracking and targeting high-threat international terrorist organizations.

Schroer applied for the Library of Congress job while dressing and presenting himself as a man. Charlotte Preece offered Schroer the job and told him that the selection committee believed his skills and experience made him “far superior to those of the other candidates.” At that point, Schroer explained to Preece that he had legally changed his name to Diane and was under a doctor’s care for gender dysphoria. Schroer further explained his intention to first dress like a woman and undergo hormone treatments and then to have a sex-change operation. Schroer gave Preece photographs to show how he intended to dress professionally as a woman and live as a woman named Diane Schroer from then on. Preece subsequently withdrew the job offer, telling Schroer that “given the circumstances” and “for the good of the service,” Schroer could no longer have the job.

Schroer sued, claiming sex discrimination under Title VII. The district court held that the notion of sexual stereotyping as discussed in the Price Waterhouse case did not apply to transsexuals. The district court stated that Schroer “was not seeking acceptance as a man with feminine traits. She seeks to express her female identity, not as an effeminate male, but as a woman. She does not wish to go against the gender grain, but with it.”

However, the district court sided with the lower court’s opinion in Ulane and noted that “discrimination against transsexuals because they are transsexuals is ‘literally’ discrimination ‘because of … sex.'” The court stated that such an approach appeared to be “a straightforward way to deal with the factual complexities that underlie human sexual identity. These complexities stem from real variations in how the different components of biological sexuality … interact with each other, and in turn, with social, physiological, and legal conceptions of gender.” The court denied the employer’s motion to dismiss and allowed the case to proceed under Title VII.

Where Do We Go from Here?

While Title VII does not specifically prohibit discrimination based upon sexual preference or gender identity, the cases discussed above indicate that courts are giving sex discrimination a broader application than has previously existed. Without any change by Congress in the language of the law, courts are now demonstrating an increased willingness to afford protection from discrimination based upon gender identity. Equally noteworthy is that courts are willing to use various avenues to provide that protection. Treating an employee less favorably than other employees because he or she does not fit into a specific mold of how someone of that gender should look or act may very well provide a basis for a Title VII sex-discrimination claim. In addition to potential federal claims, employers should be aware that many states10 and local jurisdictions including Atlanta, Georgia and Gulfport, Miami Beach, Key West and Monroe County, Florida have enacted their own anti-discrimination laws that specifically prohibit discrimination against an employee or prospective employee based upon sexual preference or gender identity. If an employee does not conform to societal stereotypes for appropriate masculine or feminine behavior, an employer should recognize that adverse actions based solely upon that nonconformity may result in both state and federal claims. The law is changing, as is the workplace, and each drives the other. Where the trend of gender-identity claims will go remains to be seen. However, what is clear is that employers should make certain that their employment decisions are based upon valid business factors and legitimate reasoning and not upon biases and stereotypes.


  1. 42 U.S.C. § 2000e-2(a)(1). 
  2. Ulane v. Eastern Airlines, Inc., 742 F.2d 1081 (7th Cir. 1984). 
  3. The Seventh Circuit, reviewing the lower court’s decision, explained its understanding of the difference among these groups:
    Transsexualism is a condition that exists when a physiologically normal person (i.e., not a hermaphrodite – a person whose sex is not clearly defined due to a congenital condition) experiences discomfort or discontent about nature’s choice of his or her particular sex and prefers to be the other sex. … To be distinguished are homosexuals, who are sexually attracted to persons of the same sex, and transvestites, who are generally male heterosexuals who cross-dress, i.e., dress as females, for sexual arousal rather than social comfort; both homosexuals and transvestites are content with the sex into which they are born.
    742 F.2d at 1083 n.3. 
  4. 490 U.S. 228 (1989). 
  5. Doe by Doe v. City of Belleville, Ill., 119 F.3d 563 (7th Cir. 1997), vacated, 523 U.S. 1001 (1998). This case was nullified because of the Supreme Court decision in Oncale v. Sundowner Offshore Services, Inc., 523 U.S. 75 (1998), which recognized a cause of action for same-sex sexual harassment under Title VII. In Oncale, the Supreme Court reasoned that although Congress may not have intended Title VII as a protection for same-sex harassment, “statutory provisions often go beyond the principal evil to cover reasonably comparable evils, and it is ultimately the provisions of our laws rather than the principal concerns of our legislators by which we are governed.” 523 U.S. at 79. Therefore, Oncale only further shows that courts, including the Supreme Court, are willing to expand the protection offered by Title VII. 
  6. Higgins v. New Balance Athletic Shoe, Inc., 194 F.3d 252 (1st Cir. 1999)(declining to hear plaintiff’s case on a sexual-stereotype theory because it was not argued at the lower court level); Nichols v. Azteca Rest. Enters., Inc., 256 F.3d 864 (2001)(finding that harassment of the plaintiff by his co-workers for failing to conform to a male stereotype was harassment “because of sex”). 
  7. Smith v. City of Salem, 378 F. 3d 566, 568 (6th Cir. 2004). 
  8. Mitchell v. Axcan Scandipharm, Inc., Civ. A. No. 05-243, 2006 WL 456173 (W.D. Pa. Feb. 17, 2006). 
  9. Schroer v. Billington, Civil Action No. 05-1090 (D. D.C. 2005)
  10. Jurisdictions prohibiting discrimination based on sexual orientation include California, Connecticut, Hawaii, Illinois, Maine, Maryland, Massachusetts, Minnesota, Nevada, New Hampshire, New Jersey, New Mexico, New York, Oregon, Rhode Island, Vermont, Wisconsin and the District of Columbia. 
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