In Case You Missed It: District Court in Texas Struck Down the EEOC’s 2024 Guidance Expanding Title VII’s Definition of “Sex”

In a memorandum opinion, the Honorable Matthew J. Kacsmaryk held that the following sections of the 2024 Guidance were contrary to statutes and precedent and, therefore, invalid:

• All language interpreting “sex” under Title VII to include sexual orientation and gender identity;
• The entire section addressing harassment based on sexual orientation and gender identity; and
• All language defining sexual orientation and gender identity as a protected class under Title VII.

Background

In 2020, the Supreme Court issued its opinion in Bostock v. Clayton County, Georgia, 140 S. Ct. 1731 (2020), holding that terminating someone for being homosexual or transgender violated Title VII’s prohibition against sex discrimination. In the wake of Bostock, in 2021, the EEOC issued a “technical assistance” document (“2021 Guidance”), which the same district court here vacated in October 2022.

The 2024 Guidance largely echoed the vacated 2021 Guidance, categorizing three new kinds of  sex discrimination: (1) employers may not deny an employee equal access to a bathroom, locker room, or shower that corresponds to the employee’s gender identity; (2) employers may not prohibit a transgender person from dressing or presenting consistent with that person’s gender identity; and (3) intentionally and repeatedly using the wrong name and pronouns to refer to a transgender employee could create an unlawful hostile work environment. The 2024 Guidance also defines “sex” as “‘pregnancy, childbirth, and related medical conditions’ and sexual orientation and gender identity.”

The State of Texas and the Heritage Foundation challenged the 2024 Guidance.

The Court’s Reasoning

Judge Kacsmaryk first concluded that the 2024 Guidance constituted a justiciable final agency action—even though the EEOC characterized it as nonbinding—because it effectively imposed substantive obligations on employers.  Among other things, the court noted that the 2024 Guidance produces legal consequences and determines rights and obligations of covered employers. The court so found even though the 2024 Guidance included disclaimer language that the “contents of this Guidance do not have the force and effect of law [and] are not meant to bind the public in any way.” Judge Kacsmaryk cited authorities holding that such disclaimer language is “boilerplate” and does not automatically remove agency guidance from scrutiny as final agency action.

On the merits, the court held:

• Statutory interpretation: The 2024 Guidance improperly redefined “sex” under Title VII to include sexual orientation and gender identity, which contradicts the plain meaning of the statute. Judge Kacsmaryk emphasized that neither Title VII nor Bostock supports a categorical expansion of “sex” beyond the binary of biological male and female.
• Improper expansion of sexual harassment: The 2024 Guidance contravenes Title VII by defining discriminatory harassment to include transgender bathroom, pronoun, and dress preference. It improperly requires employers to provide accommodations to all transgender employees to avoid the threat of litigation, such as accommodating pronoun preferences, giving access to bathrooms and locker rooms, and having dress codes aligned with transgender employees’ preferred gender identity.  The Texas court further explained that it has long been recognized that Title VII “does not reach genuine but innocuous differences in the ways men and women routinely interact with members of the same, and the opposite, sex.  Nor does Title VII require ‘asexuality’ or ‘androgyny’ in the workplace. In sum, Title VII does not bar workplace employment policies that protect the inherent differences between men and women.”
• Misinterpretation of Bostock: The Texas court rejected the EEOC’s expansion of the Supreme Court’s ruling in Bostock. The court explained that Bostock addressed only a narrow issue — whether firing someone because they are homosexual or transgender constitutes sexual discrimination prohibited by Title VII.  Indeed, the Supreme Court in Bostock expressly refused to expand the definition of “sex” to include homosexuality, gender identity, or anything else. Also, in Bostock, the Supreme Court expressly emphasized that it was not “addressing bathrooms, locker rooms, or anything else of the kind” (including, presumably, pronoun usage) and that those were “questions for future cases.”

Implications for Employers

The EEOC has updated its website to indicate which portions of the 2024 Guidance are no longer enforceable. That said, given the complexity of the legal landscape in this regard, uncertainty remains. Lower courts may have different views and interpretations of the scope of Bostock’s application. In addition, many states and local laws and ordinances, including the City of Philadelphia Fair Practices Ordinance, expressly prohibit discrimination on the basis of sexual orientation and gender identity. Employers should stay informed and review their policies to comply not only with federal law, but also state and local laws and ordinances.

For further guidance on complying with Title VII and/or assessing your organization’s risk exposure, please contact our labor & employment practice group.

Co-author Lee Moylan is a partner and the chair of the labor & employment practice group. Co-author Caixia Su is an associate in the Litigation Department at Klehr Harrison.