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Supporting Transgender Employees in the Workplace

Small businesses often find themselves in a tough spot when federal laws against discrimination require employers to treat all employees equally. Large corporations can distance themselves from the public approval or disapproval of their actions. Small business owners must confront upset employees and angry members of the public when a law passes they disagree with.

This has been the case since the U.S. Supreme Court ruled in Bostock v. Clayton County, Georgia, that Title VII of the Civil Rights Act of 1964 applies to transgender individuals. Title VII prohibits discrimination based on race, religion, sex, and national origin. The Court held in Bostock that sex discrimination includes sexual orientation and gender identity.

This article reviews some nondiscrimination policies small businesses adopt and potential legal pitfalls related to this topic.

A Brief Summary of Bostock

The Civil Rights Act of 1964 made it illegal to discriminate against otherwise qualified individuals based on race, religion, sex, and national origin. It was silent about sexual orientation and gender identity. Individual state laws provided their own protection for LGBT individuals, but the federal government said nothing until Bostock.

The Court's ruling in Bostock did not add anything to the statute. The Court based the ruling on a logical reading of Title VII. The ruling reads in part, " is impossible to discriminate against a person for being homosexual or transgender without discriminating against that individual based on sex."

Firing a gay male because that person is a gay male means firing them for sexual traits that would be acceptable in a straight female. The same logic is true of transgender status.

The issues facing employers, especially in a smaller work environment, go beyond the legal logic the Supreme Court applies. Dealing with employees is a human resources matter, not a logical matter.

Issues Facing a Small Business

Title VII applies to any business with 15 or more employees. Many state and local laws apply to businesses with fewer than 15 workers. For instance, California's Fair Employment and Housing Act (FEHA) applies to businesses with five employees or more. Even very small businesses can find ways to follow federal and state laws.

Workplace discrimination is illegal, no matter who the victim is. If employers consider the subject as one of adjusting employment policies to include transgender workers, the issue becomes easier to manage. Discriminating against a transgender person is just as illegal as discriminating against a person of color.

Workplace culture is close in a small office or job site where everyone knows each other. Employers may have difficulties raising the issue when an employee comes out as transgender or explains they will be undergoing gender reassignment therapy. Most human resource management experts suggest the best course of action is to address some topics head-on.


The issue of a person who is transgender using the restroom matching their gender identity rather than their birth-assigned gender has become a source of major conflict in some settings. Large businesses may need locker rooms or multi-stall bathrooms. Small businesses should consider gender-neutral bathrooms.

Having transgender employees use a third, unspecified bathroom or a family-use bathroom is not helpful, as it further isolates and discriminates against the trans worker. The EEOC's current enforcement of Title VII, as defined by Bostock, makes employers liable for this type of gender discrimination.

Pronouns and Names

A person's name is an integral part of their being. Everyone has had the experience of having a nickname bestowed upon them that they didn't like but couldn't shake. Employees can choose their name(s), whether it is a cisgender male named Joe who does not like his nickname Moose, or a transgender female whose name is Betty.

Owners and managers can set the tone by correcting errors when they hear them.

"Have you seen Moose?"

"Yes, Joe is in the breakroom."

"I was looking for Hank, have you seen him?"

"I saw Betty by her desk."

With repetition, both things become easier.

You may encounter some pushback on names and pronouns. In recent years, the use of nonbinary gender pronouns has been challenged in K-12 educational settings.

The Equal Employment Opportunity Commission (EEOC) has not issued final guidance on the use of pronouns or deadnaming, which is calling a trans person by their former name instead of their chosen name, as a form of harassment. Proposed changes could make an employer who permits continued misuse of pronouns or deadnaming liable for an EEO charge.

Best Practices for Transgender Inclusion

The National Center for Transgender Equality has a useful and accessible guide for being an ally to trans people in and out of the workplace. Employers can use these tips to craft their employment policy for training workers on accepting trans employees and complying with discrimination laws.

  • Create and use trans-inclusive policies throughout the workplace: These go beyond bathroom issues. Gender-neutral dress codes avoid gender stereotypes for everyone, cisgender and transgender.
  • Support gender transition: Support means more than providing moral support. As a business owner, you should ensure your health insurance provides the coverage needed for your employee or assist with obtaining other healthcare through alternate channels.
  • Reach out to advocacy groups for trans-specific diversity training: If you're unsure how best to create and enforce a supportive workplace, some organizations can help. The Human Rights Campaign (HRC) has HR professionals offering training on various diversity issues.

Transgender discrimination in the workplace affects everyone. LGBTQ, transgender, and gender nonconforming workers want the opportunity to work alongside their co-workers. Business owners want skilled employees doing their jobs. Nobody wants an EEOC investigation because of a discrimination claim.

Getting Legal Help

Having a transgender employee can be a complicated and sensitive issue for both you and your employees. If you have any questions or concerns about the best way to handle a transgender employee, you may want to contact a business law attorney in your area.

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