Terminated Transgender Employee Raises Triable Sex Discrimination Issue Under Title VII Mixed-Motive Theory

The case is Chavez v. Credit Nation Auto Sales decided by the 11th Circuit on January 14, 2016 [2016 U.S. App. LEXIS 598].  This is not the first time the 11th Circuit has ruled in favor of a terminated female transgender employee.  The 11th Circuit supported the District Court (Northern District of Georgia) ruling in Glenn v. Bumbry (201) [663 F.3d 1312], a 14th Amendment Equal Protection case.  In the words of the 11th Circuit:

The employer testified at his deposition that he fired the employee because he considered it inappropriate for her to appear at work dressed as a woman and that he found it unsettling and unnatural that the employee would appear wearing women's clothing. The employer admitted that his decision to fire the employee was based on the sheer fact of the transition. The employer's testimony provided ample direct evidence to support the district court's conclusion that the employer acted on the basis of the employee's gender non-conformity. The employer advanced no reason that could qualify as a governmental purpose, much less an important governmental purpose, and even less than that, a sufficiently important governmental purpose was achieved by firing the employee because of her gender non-conformity.

However, Glenn raised a Section 1983 claim against a state agency, and the conclusion (failure to serve an important government purpose) is different from a Title VII case against a private entity. In the Chavez case, the District Court (also Northern District of Georgia) granted summary judgment to Credit Nation on each of three claims.  Two of three judgments were upheld, but the third one was deemed worthy of a jury trial.  The critical fact in this case was that Jennifer Chavez, an auto mechanic, was fired for sleeping on the job.

The first claim by Chavez was that she had direct evidence of sex discrimination in the form of negative remarks made by her employer (Torchia) in a face-to-face meeting.  The court rejected this argument because the remarks in question were not deemed sufficiently “blatant” to qualify as direct evidence of sex discrimination.

The second claim involved indirect (or circumstantial) evidence of sex discrimination decided by McDonnel-Burdine rules.  The court ruled that Chavez successfully made her prima facia case of sex discrimination, but that Credit Nation articulated a legitimate nondiscriminatory reason for termination (sleeping on the job).  Chavez could not prove pretext mainly because another (male) employee had been previously fired for the same reason.

However, the third claim was the charm --- that sex was a motivating factor in the decision to terminate Chavez.  Prior to the Civil Rights Act of 1991 (CRA-91), the general rule was that an illegal motive had to be the “but for” reason for a selection decision.  After CRA-91, the rule was simply a motivating factor, not the only factor, and the court ruled that Chavez presented sufficient information for a jury to rule in her favor.  That evidence included that Torchia, the owner, was initially supported of her gender transition, but later changed her mind, calling it a “condition” that was a negative factor for business.  She was told things such as not to wear a dress to and from work, she could no longer use the unisex restroom and, more generally not to wear anything “outlandish.”  Additionally, the company vice president asked her to “tone down” her conversations with fellow employees about her surgeries, that her work was subjected to heightened scrutiny, and that legal counsel was asked to search for a reason to fire her.  Perhaps as important, the company had a “progressive” disciplinary policy  that was not used in this case.

If this case goes to trial (i.e., no settlement), a jury will have to decide if (a) an illegal motive played a motivating factor in the termination and, if so, (2) whether the employer had a legal reason for the termination.  If Chavez wins on the illegal motive, she gets at least injunctive relief and attorney fees.  If so, and the employer cannot prove a legal motive, Chavez will be entitled to much more (e.g., back pay and possibly compensatory and punitive damages).

I would add two things here.  First, so far only one circuit (the 11th) has ruled favorably in a transgender case.  Second, it not clear if a ruling favoring the transgender females in this case would also apply to gender preference.  Nevertheless, employers with anti-gender identity and transgender policies should, in my opinion, rethink those policies.

By Art Gutman, Ph.D., Professor, Florida Institute of Technology

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