On October 23, 2014, the U.S. Office of Special Counsel announced its landmark determination that the Department of the Army engaged in gender identity discrimination against a civilian Army quality assurance specialist after she revealed her intention to transition from male to female. The Army agreed to provide remedial training on prohibited personnel practices, particularly on prohibitions against gender identity discrimination. The Army also agreed to provide workplace diversity and sensitivity training.

This finding marks the latest in a string of federal governmental actions aimed at prohibiting discrimination in the workplace on the basis of sexual orientation and gender identity.

• Last month, the Equal Employment Opportunity Commission filed two lawsuits on behalf of plaintiffs challenging transgender discrimination.   In both cases, the plaintiffs claim that their employers fired them because they were transitioning from male to female. The EEOC has previously interpreted Title VII to prohibit discrimination on the basis of transgender status, but this new litigation will be the first time that the EEOC tests its interpretation in court.
• In July 2014, President Obama signed an Executive Order prohibiting federal government contractors and subcontractors from discriminating in employment decisions on the basis of sexual orientation or gender identity.
• In April 2014, in official guidance on Title IX, the Office of Civil Rights stated that “Title IX’s sex discrimination prohibition extends to claims of discrimination based on gender identity or failure to conform to stereotypical notions of masculinity or femininity…”

Employers must understand that while sexual orientation and gender identity are not listed as protected classes in either Title VII or Title IX, the federal agencies charged with enforcing those laws interpret them to prohibit discrimination on the basis of sexual orientation and gender identity. However, employers that are “religious corporations,” and educational institutions that are “controlled by religious organizations,” may be entitled to exemptions if application of the law would be inconsistent with the religious tenets of those organizations.