Margaret Hershiser has an illuminating article in the November/December issues of the Nebraska Lawyer highlighting employment discrimination against transgender individuals. This is of particular importance for Iowa employers as Governor Chet Culver signed Bill SF427 to include gender identity and sexual orientation to the state's Civil Rights Act.
The bill broadly definers gender identity as "a gender-related identity of a person, regardless of the person's assigned sex at birth" and sexual orientation as "actual or perceived heterosexuality, homosexuality, or bisexuality." This new classification pertains to employers, employees, employment agencies, labor organizations, public accommodations, housing, educational institutions, creditors, and anyone else previously covered by the Civil Rights Act.
While not every state has laws protecting transgender individuals, in 1989 the Supreme Court issued a decision for transgenders in Price Waterhouse v. Hopkins, 490 U.S. 228 (1989). In that case, Ann Hopkins was the only woman chosen as as candidate for partner with Price Waterhouse, along with 87 other males. Twenty candidates were held for later reconsideration, including Ann Hopkins. However, when the partners refused to re-nominate her, she quit and sued under Title VII claiming sexual discrimination. Some of her former employees advised her "to walk more femininely, talk more femininely, dress more femininely, wear make-up and have your hair styled and wear jewlery." The Federal District Court ruled in Hopkins' favor with regards to her claim that the partners criticism was a product of sexual stereotyping. The Court of Appeals and six members of the U.S. Supreme Court agreed that those type of comments displayed gender discrimination.
There have been other federal courts that decline the reasoning in Price Waterhouse to other transgenders. The court entered a summary judgment ruling for the employer that terminated it's employee, a pre-operative transsexual, based on the employee's expressed intent to use the women's restrooms while still retaining male genitalia in Etsitty v. Utah Transit Auth., 2005 WL 1505610 (D. Utah 2005). Esitty had changed his name and sex designation on his driver's license, however; the court found Price Waterhouse inapplicable, recognizing "[c]oncerns about privacy, safety and propriety are the reason gender specific restrooms are universally accepted in our society."
A growing problem for employers is how to handles issues where transgender discrimination and gender discrimination collide. For example, the law provides no guidance for an employer with a transgender employee who wants to use the woman's restroom and with female employees who do not want to share the bathroom with a person of the opposite gender.