The cause of transgender employment rights has won a notable victory in Indiana, where a judge ruled that an operator of convenience stores could be liable for firing an employee who was transitioning from male to female.

Chief U.S. District Judge Robert L. Miller did not go so far as to interpret Price Waterhouse v. Hopkins, 490 U.S. 228 (1989), as “provid[ing] a cause of action based solely on a plaintiff’s transgender status.” But he appears to be the first judge within the jurisdiction of the 7th U.S. Circuit Court of Appeals to uphold a transgender plaintiff's sex stereotyping claim.

Family Express Corp. hired Amber Creed, who was born a biological male, to work as a sales associate in February 2005. After Creed began presenting herself at work as a woman, wearing makeup and a feminine hairstyle, the company terminated her.

“That her managers requested she appear more masculine during business hours allows the inference that the managers harbored certain stereotypical perceptions of how men should dress,” Miller said in an opinion partially denying Family Express's motion to dismiss.

“Ms. Creed’s allegation she was terminated after refusing to present herself in a masculine way permits the inference she was terminated as a result of these stereotypical perceptions, rather than simply her gender dysphoria,” he concluded.

Price Waterhouse bars discrimination based on a failure to conform behavior to sex stereotypes. In cases involving transgender plaintiffs, however, some courts have followed the lead of the 7th Circuit in Ulane v. Eastern Airlines, 742 F.2d 1081 (1984), which held that Congress only intended Title VII to cover the claims of biological males and females.

Miller rejected Creed's argument that Price Waterhouse had “eviscerated” the Ulane precedent, which, he said, “remains controlling law.” But “a transgender plaintiff can state a sex stereotyping claim” that “arise[s] from the employee's appearance or conduct and the employer's stereotypical perceptions.”

The decision is, to some extent, the reverse of Schroer v. Billington, 424 F.Supp.2d 203 (2006), in which a District of Columbia judge dismissed a transsexual's sex stereotyping claim but said she could sue the Library of Congress for refusing to hire her “solely because of her sexual identity.”

“The district court in Schroer v. Billington ultimately determined that Title VII covers discrimination based on sexual identity, but in light of this circuit’s precedent, this court can’t join in this conclusion,” Miller said.

The 10th Circuit is now reviewing the dismissal of a transsexual's Title VII claims in Etsitty v. Utah Transit Authority. With the diversity of lower court views (see table), it may soon be time for the Supreme Court to address the issue.

By Matthew Heller
8/19/07