From Protection to Rejection: How The EEOC’s New Stance on Trans Rights and Gender Identity Impacts Employers

On Saturday, the Associated Press reported that the Equal Employment Opportunity Commission (EEOC) moved to drop several lawsuits related to gender identity discrimination. Let’s examine what caused this change in direction and the implications for employers.

Why the EEOC Filed the Lawsuits

In one case filed last June, the EEOC alleged that an employer fired a night auditor after management observed the employee styled and dressed in a way they perceived as feminine, which differed from their preferred appearance for male employees. The agency asserted that the company’s management fired the employee just hours after discovering the employee’s sexual orientation and gender identity.

The EEOC brought that action because such alleged conduct violates Title VII of the Civil Rights Act of 1964, which prohibits employment discrimination because of sex, including discrimination because of sexual orientation, gender identity, or gender stereotypes. Indeed, the EEOC’s official position was (and still is) that “sex-based discrimination under Title VII includes employment discrimination based on sexual orientation or gender identity.” Before that, in Bostock v. Clayton County, the Supreme Court ruled that such discrimination is a form of sex discrimination.

Why the EEOC Is Dropping the Cases

The EEOC’s decision to withdraw this and similar cases follows a shift in federal policy. On January 20, 2025, an Executive Order titled “Defending Women from Gender Ideology Extremism and Restoring Biological Truth to the Federal Government” was issued. It directs the federal government to recognize only two sexes: male and female.

The Executive Order has led to major shifts in how the EEOC handles gender identity discrimination:

Defining Sex as Strictly Binary – The order mandates that the government recognize only male and female as fixed, biological sexes, conflicting with the EEOC’s past stance that gender identity is protected under Title VII.
Excluding Gender Identity from Protections – The order explicitly states that “sex” does not include “gender identity,” which conflicts with previous EEOC guidance that protected gender nonconforming and transgender employees.
Shift in Priorities – Acting EEOC Chair Andrea Lucas has stated that defending the “biological and binary reality of sex” is now a focus, moving away from prior protections for transgender and gender-nonconforming individuals.

What Employers Need to Know

The EEOC’s decision not to pursue gender identity discrimination claims does not reduce legal protections for LGBT workers and should not affect HR compliance.

Legal Risks – The EEOC may not pursue certain cases, but employees can still file discrimination charges and private lawsuits. Maintaining non-discrimination policies protecting LGBT workers and conducting regular training remains critical.
State and Local Laws – Many states and localities have laws that provide stronger protections than federal law, so employers must stay compliant at all levels.
Workplace Culture – An inclusive workplace fosters morale and productivity, regardless of federal policy shifts.

The EEOC’s decision to drop these cases signals a significant change in civil rights enforcement. However, employers should continue to follow the law.