Employment Law Daily For-profit funeral home that fired transgender employee entitled to religious exemption from Title VII
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Tuesday, August 23, 2016

For-profit funeral home that fired transgender employee entitled to religious exemption from Title VII

By Kathleen Kapusta, J.D. In one of the first two cases brought by the EEOC on behalf of a transgender person, a federal court in Michigan found a funeral home that fired its transgender funeral director because she would not conform to its sex-specific dress code was entitled to an exemption under the Religious Freedom Restoration Act from Title VII and the body of sex-stereotyping case law that has developed under it. Pointing out that the EEOC took the position that the employee had a Title VII right to "dress as a woman" in order to express her gender identity, the court questioned why, if the compelling interest was to eliminate gender stereotypes, the agency couldn’t propose a gender-neutral dress code as a reasonable accommodation that would be a less restrictive means of furthering that goal under the facts presented here. Accordingly, the court denied the EEOC’s motion for summary judgment and granted the employer’s in part (EEOC v. R.G. & G.R. Harris Funeral Homes, Inc., August 18, 2016, Cox, S.). Unacceptable. Hired in 2007, the employee informed her employer and coworkers six years later that she was undergoing a gender transition from male to female and intended to dress in appropriate business attire as a woman from then on (the employer, pursuant to its dress code, required males to wear a pants-suit and females to wear a skirt-suit). Approximately two weeks later, the employer fired her because she would no longer dress like a man under its dress code. Bringing suit on behalf of the employee, the EEOC alleged that the funeral home fired the employee because she is transgender, because of her transition from male to female, and/or because she did not conform to the employer’s sex- or gender-based preferences, expectations, or stereotypes. In a prior decision, the court found the EEOC sufficiently pleaded a sex-stereotyping gender-discrimination claim under Title VII and declined to dismiss the agency’s Title VII claim against the funeral home. Wrongful termination. On cross-motions for summary judgment, the EEOC argued that the employee was terminated in violation of Title VII under a Price Waterhouse sex-stereotyping theory of sex discrimination. Noting that the funeral home owner testified that he fired the employee because the employee would no longer dress like a man, the court pointed out that this appeared to be direct evidence of employment discrimination. Reliance on dress code. Relying on Jespersen v. Harrah’s Operating Co., a nonbinding decision from the Ninth Circuit, the employer argued that enforcement of its sex-specific dress code was not impermissible sex-stereotyping under Title VII. Rejecting this assertion, the court noted that the EEOC was not challenging the dress code, which was injected into the case only because the employer was using it as a defense to the Title VII sex-stereotyping claim. The majority in Jespersen affirmed the dismissal of a female bartender’s claim that a policy requiring only women to wear makeup was discriminatory, but it nonetheless emphasized that it was not precluding as a matter of law a sex-stereotyping claim on the basis of dress or appearance codes. The Sixth Circuit has not provided any post-Price Waterhouse guidance as to whether sex-specific dress codes that have slightly different clothing requirements for men and women either violate Title VII or provide a defense for sex-stereotyping. However, the court determined that the Jespersen dissent, which would have found that the bartender had a sex-stereotyping claim, was more in line with the post-Price Waterhouse views expressed by the Sixth Circuit, especially in Smith v. City of Salem, Ohio, which has gone a bit further than other courts in terms of the reach of a sex-stereotyping claims after Price Waterhouse. RFRA exemption. The employer fared better, however, on its claim that the RFRA prohibits the EEOC from applying Title VII to force it to violate its sincerely held religious beliefs. The RFRA "prohibits the "Government [from] substantially burden[ing] a person’s exercise of religion even if the burden results from a rule of general applicability" unless the Government "demonstrates that application of the burden to the person—(1) is in furtherance of a compelling governmental interest; and (2) is the least restrictive means of furthering that compelling governmental interest." Citing Hobby Lobby for the proposition that a for-profit corporation is considered a person for purposes of RFRA protection, the court determined that the funeral home, a for-profit, closely-held corporation, was entitled to RFRA protection. And on its face the statute applied to the EEOC as a federal agency. Thus, the question was whether Title VII, and the body of sex-stereotyping case law that has developed under it, impose a substantial burden on the funeral home’s ability to conduct business in accordance with its religious beliefs. To the court, it did. "Immutable God-given gift." Here, the owner testified that he has been a Christian for over 65 years; the funeral home’s mission statement, published on its website, reads "R.G. & G.R. Harris Funeral Homes recognize that its highest priority is to honor God in all that we do as a company and as individuals;" the owner believed that God called him to serve grieving people; and he believed that the "Bible teaches that a person’s sex (whether male or female) is an immutable God-given gift and that it is wrong for a person to deny his or her God-given sex." He believed he would be violating God’s commands if he were to allow a biologically male-born employee to wear a skirt while at work because he "would be directly involved in supporting the idea that sex is a changeable social construct rather than an immutable God-given gift." Such beliefs, said the court, implicate questions of religion and moral philosophy. Under Hobby Lobby, it not the court’s role to decide whether those "religious beliefs are mistaken or insubstantial," said the court, but only to determine if this is an honest conviction. To the court, there was no dispute that it was. As to whether the burden was substantial, if the employer were to yield to Title VII, the economic consequences could be severe—having to pay back and front pay to the employee. Further, the owner stated that he would feel significant pressure to sell the business and give up his calling of ministering to grieving people. Exemption. Considering whether the EEOC’s assertion that "Congress’s mandate to eliminate workplace discrimination" was a compelling governmental interest that warranted burdening the funeral home’s exercise of religion, the court could not see how this met the requisite "to the person"-focused showing required by the RFRA. But, also at a loss for how to scrutinize "the asserted harm of granting specific exemptions to [the] particular religious claimant" and to "look to the marginal interest in enforcing" the challenged law in this particular context, the court assumed without deciding that the EEOC met its compelling governmental interest burden. Least restrictive means. But the EEOC failed to provide a focused "to the person" analysis of how the burden on the employer’s religious exercise was the least restrictive means of eliminating clothing gender stereotypes at the funeral home here, said the court. The goal of the sex-stereotyping theory of sex discrimination is that "gender" be irrelevant with respect to the terms and conditions of employment, theorized the court, noting that the EEOC argued that the employee had the right, under Title VII, to dress as a woman while working at the funeral home. "If the compelling governmental interest is truly in removing or eliminating gender stereotypes in the workplace in terms of clothing (i.e., making gender "irrelevant"), the EEOC’s manner of enforcement in this action (insisting that [the employee] be permitted to dress in a stereotypical feminine manner at work) does not accomplish that goal," the court reasoned, finding that the employer was entitled to a RFRA exemption from Title VII. Clothing allowance. Finally, the court found that while the EEOC also alleged that the employer violated Title VII by providing a clothing allowance to male employees but failing to provide such assistance for female employees, it could not bring this claim because the underlying EEOC administrative investigation uncovered possible unlawful discrimination of a kind not raised by the charging party and not affecting the charging party. Thus, under Sixth Circuit precedent, the proper procedure is to file a charge by a member of the EEOC and for an EEOC investigation of that new claim.

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