On its face, federal law does not list sexual orientation or trans-gender status as protected categories. Some states or cities have passed their own laws offering such protections, leaving a patchwork of laws across the country.
For this reason, many employers have delayed adding to their handbook’s list of protected classifications for either political reasons or to avoid arguably granting more protection than required in those local jurisdictions without expanded coverage. Looking forward, 2015 is the year where I can say that such a position is no longer optional — all employers should formally list these protected classifications in their policies. First, the list of state and local governments who have passed laws protecting employees from discrimination on the basis of sexual orientation or trans-gender status continues to grow, and now covers the majority of the country. Houston, Texas joined the ranks of cities with such laws last year. Second, the United States Attorney General issued a little-publicized memorandum in December 2014, making clear the federal government’s enforcement position that Title VII of the Civil Rights Act of 1964 should be interpreted as covering trans-gender employees. A copy of the memo can be found here.
This Justice Department memorandum is not a new development in the law, and only formalizes a line of cases that have long made discrimination on the basis of “gender identity” or sexual stereotyping illegal. Since discrimination based on “sexual stereotyping” can be used as a proxy for sexual orientation discrimination as well, and the Supreme Court has already made “same sex” harassment actionable, there are no meaningful gaps left to fill under federal law. Without an amendment of Title VII, the law has slowly but surely been changed to include classifications not originally in the law, and which were even the subject of unsuccessful Congressional legislative efforts. One can argue about whether changing the law in such fashion is a good or bad thing, but the shift in the law is now undeniable, and prudent employers should modify their policies to adapt to the new legal landscape.