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by Matthew J. Roberts, J.D.; Associate General Counsel for Labor and Employment, CalChamber
New presidential administrations often begin by seeking to undo the previous administration's rules and priorities, replacing them with new ones — usually through the implementation of executive orders. The Trump administration’s first week was dominated by the signing of dozens of executive orders to remake the federal government based on the president’s priorities.
Amid the flurry of executive actions, Executive Order (EO) 14168 directed federal government agencies, including the Equal Employment Opportunity Commission (EEOC), to take steps to enforce a policy that the United States only recognizes two sexes — male and female — and that these sexes are not changeable through a person’s gender identity. While the order is straightforward in its policy intent, a recent U.S. Supreme Court case, EEOC guidance and the fact that these new policies conflict with California law create a muddled picture of compliance for multi-state employers with employees in California.
Title VII of the Civil Rights Act of 1964 protects employees from discrimination based on race, color, religion, sex or national origin. Beyond biological sex, Title VII defines sex discrimination to include adverse actions against employees based on pregnancy, childbirth or related medical conditions.
Over the years, the courts have seen numerous cases exploring the dynamics of what can be sex discrimination under Title VII, but the biggest expansion came in 2020 when the U.S. Supreme Court issued its decision in Bostock v. Clayton County. The case was the consolidation of three different cases of alleged sex discrimination, and the Court was asked whether a person’s sexual orientation or gender identity could form the basis of a claim for sex discrimination. In each of the cases at issue, an employee was fired because they disclosed that they were either homosexual or had changed their gender identity to one that differed from their sex at birth.
Exploring the question of whether sex discrimination includes both sexual orientation and gender identity, the Court had to decide what the phrase “because of sex” meant in the context of Title VII. Employers in the case argued that because employees were terminated due to their sexual orientation or gender identity — terms not included in Title VII — there was no unlawful discrimination.
The Court rejected this argument because unlawful discrimination under Title VII only requires that the decision to take an adverse action against an employee be based in part on the employee’s sex. To that end, the Court found that labels like homosexual and transgender are irrelevant in the analysis because it’s impossible to discriminate against an employee based on these labels without some part of the discrimination being based on sex.
The Court set out the following example to illustrate this point in the case of gender identity. An employer has two employees: one who was identified as male at birth and one who was identified as female at birth. At some point, the employee who was male at birth began identifying as female, and the employer now has two employees who identify as female. The employer terminates the employee who was born male. This means that the employee’s male sex was, at least partly, a basis for termination because the employer tolerated the other employee who shared the same actions and traits while identifying as female.
As a result of Bostock, Title VII’s definition of sex discrimination now includes situations where a person’s sexual orientation or gender identity forms the basis for the adverse action.
As Title VII has been interpreted by the courts over the decades, the definition of unlawful employment discrimination has broadened as fact-sensitive conduct has tested the bounds of the statutory text. To assist the public with understanding how the EEOC will enforce Title VII, it maintains a standing document titled Enforcement Guidance on Harassment in the Workplace. Through its five-member commission, the EEOC will amend this guidance as the law or court decisions alter the meaning of Title VII. Any modification of this document requires a majority vote of the commission.
Following Bostock, which was the first U.S. Supreme Court decision to extend sex discrimination to cases involving questions of sexual orientation and gender identity, the EEOC moved to amend the harassment guidance. The current version of the guidance was issued on April 29, 2024, and provided examples of what the EEOC viewed as harassing conduct based on sexual orientation and gender identity.
Within that guidance are two types of conduct the EEOC believes violates Title VII’s prohibition on sex harassment based on gender identity. First, the EEOC states that repeated and intentional use of a name or pronoun inconsistent with the individual’s known gender identity, otherwise known as “misgendering,” is unlawful harassment. Second, the EEOC states that denying access to a restroom or other sex-segregated facility consistent with the employee’s gender identity is also unlawful harassment.
On President Trump’s first day in office, he signed EO 14168 which states, “It is the policy of the United States to recognize two sexes, male and female. These sexes are not changeable and are grounded in fundamental and incontrovertible reality. Under my direction, the Executive Branch will enforce all sex-protective laws to promote this reality, and the following definitions shall govern all Executive interpretation of an application of Federal law and administration policy.”
The order goes on to define sex to only include the biological classification of male and female at birth and that a person’s gender identity doesn’t provide a meaningful basis for identification and can’t be recognized as a replacement for sex. The executive order also provided direction to numerous federal agencies to revoke or amend prior statements, guidance, regulations, forms, and other internal and external messaging inconsistent with these definitions. It identifies several specific documents that will require update, including the EEOC’s harassment guidance described above.
The day after signing EO 14168, President Trump appointed Andrea Lucas as acting chair of the EEOC. Prior to her appointment, Lucas was an EEOC commissioner. In response to EO 14168, Lucas issued a statement on the steps she has taken to comply with the executive order. These steps include:
Lucas also noted that the EEOC has been directed to amend the harassment guidance, especially around the use of pronouns or restriction of single-sex spaces, in accordance with EO 14168, but that it can’t do so without a majority vote of the commission. Currently, the commission has only two of the five appointed members. To vote on any guidance documents, the commission needs at least three members, so for now, the April 29, 2024, version of the guidance will remain, though its revision is clearly a priority.
Although the commission doesn’t have the required number of members to issue new guidance, the EEOC continues to enforce Title VII by receiving charges of discrimination, issuing right-to-sue letters and/or investigating these charges. It is very important to note that the EEOC can’t override the Bostock decision, and therefore employers still can’t use gender identity as a basis for employment discrimination. What becomes unclear is whether certain conduct, such as misgendering an employee or restricting access to single-sex restrooms or other spaces, will be considered harassment under federal law.
Further, all employers covered by Title VII will need to follow updates at the EEOC in the event of an amendment to the Know Your Rights poster to ensure the most current version is posted.
Despite the seismic shift in priorities at the EEOC and a desire to unwind certain guidance around harassing conduct based on gender identity, the federal government’s actions don’t change anything for California employers. This is because California’s Fair Employment and Housing Act (FEHA) may provide for additional protections from discrimination and harassment beyond what is provided by Title VII, no matter how the EEOC chooses to enforce it.
The FEHA expressly identifies both gender expression and gender identity as their own distinct protected classes as opposed to just grouping those classes under the definition of sex. In addition, the Civil Rights Council — the rulemaking body for the Civil Rights Department that enforces the FEHA — issued regulations in 2017 that provide protections for employees who:
Employers that fail to follow these regulations may be liable under the FEHA for gender identity harassment and/or discrimination.
Lastly, California requires that any training provided to employees designed to meet the state’s biennial harassment prevention training requirement must include content on changing or modifying behaviors that create or contribute to harassment based on gender identity and expression.
Because of the sharp contrast between the current EEOC’s interpretation of Title VII, the Bostock decision and California law, multi-state employers with employees both in and outside California should consult with legal counsel on a coherent strategy and policy initiatives to address gender identity issues in the workplace.