As predicted, the news in the Labor/Employment world continues to center on developments in the area of legal rights for transgender employees. On January 21, the EEOC announced a $115,000 settlement of a complaint against a company which had been accused of discriminating against a transgender female employee. According to the EEOC press release, the employer – Deluxe Financial – was accused of failing to allow an employee who was hired as a male, but later informed her manager that she was transgender and began to “present as a woman” to use the female restroom. Plaintiff also alleged that managers and co-workers teased her and subjected her to a hostile environment.

In addition to the payment of monetary damages to the plaintiff, the employer was required to issue her a letter of apology and is now under a 3 year consent decree with the EEOC. The consent decree requires the employer to revise its EEO policies to cover transgender status, and to give employees additional training on sex -stereotyping and gender identity discrimination.

The EEOC’s press release makes the Agency’s position clear: “This settlement underscores EEOC’s commitment to securing the rights of transgender individuals under Title VII in the federal courts.” The EEOC goes on to note that this is the agency’s second settlement of such a lawsuit, with a Florida eye clinic paying $150,000 to settle a similar claim by an employee who was transitioning from male to female

What does this mean for all employers? Clearly, EEOC settlements and consent decrees are no fun and are best avoided. So, what should you do? It is simple – BE SMART! Discrimination against LGBT and transgender employees may or may not be explicitly a violation of the law in your city or state, but the federal government clearly considers such discrimination to be a violation of Title VII. Apart from amending your policies, the most important thing that you can and must do as an employer is EDUCATE your management, so they understand that an employee who ‘present’ as one gender when hired, can lawfully present as another gender at some point later in the employment relationship. Such an employee must be accommodated, and cannot be the subject of jokes, teasing or harassment. From my experience counselling numerous clients through these situations, I know this is often easier said than done, as management may also encounter other employees who do not understand, are wary of this situation, or simply do not want to accept it. You need to be respectful of all of your staff, but you simply cannot tolerate discrimination against transgendered employees, just as you would not tolerate race discrimination.

These situations need to be monitored and handled carefully, so that you do not find yourself in the crosshairs of the EEOC or a plaintiff’s attorney.

We are clearly in uncharted waters in this era of transgender rights, but it is the law, so all employers must take the right steps to be in compliance.

Company to Pay $115,000 to Settle Sex Discrimination Suit on Behalf of Transgender Employee