On April 20, 2012, the EEOC issued a decision in Macy v. Holder. The key litigated issue was whether claims of discrimination based on gender identity, change of sex or transgender status constituted sex discrimination in violation of Title VII.

Mia Macy, a transgender woman presenting as a man, spoke with the Director of the Bureau of Alcohol, Tobacco, Firearms and Explosives' (Agency) Walnut Creek crime laboratory about an available position over the phone and was told the position was hers pending a background check. A few months later, on March 29, 2011, Macy informed the outside company filling the position that she was in the process of transitioning from male to female and asked the company to inform the Director of her change. On April 8, 2011, Macy was told the position was no longer available because of budget cuts. However, in a later conversation with an Agency equal employment opportunity (EEO) counselor, she discovered someone else had been hired instead.

Macy filed a formal EEO complaint with the Agency, claiming discrimination on the basis of her sex, gender identity and sex stereotyping. The Agency ultimately accepted her complaint on the basis of sex and gender identity stereotyping but refused to process the second part of her claim under Title VII and EEOC regulations, claiming gender identity discrimination claims cannot be adjudicated by the EEOC. Macy filed an appeal with the EEOC, arguing:

On appeal, the EEOC found that claims of discrimination based on transgender status:

According to the EEOC, the term sex in Title VII encompasses both the biological differences between the sexes and gender, which includes a person's biological sex and the cultural and social aspects associated with the two genders. Citing Price Waterhouse v. Hopkins, the EEOC noted an employer discriminates on the basis of gender whenever it treats an employee differently for failing to conform to gender-based expectations.

The EEOC also recognized the validity of sex stereotyping theory as a method of establishing sex discrimination in general, by showing an employer has acted based on stereotypes of how men or women should act. However, the EEOC noted sex stereotyping is not an independent cause of action.

The EEOC reversed the Agency's final decision declining to process Macy's entire complaint under Title VII and EEOC regulations and remanded the complaint to the Agency.

The decision establishes the EEOC's position that sex discrimination under Title VII includes transgender discrimination and allows transgender employees to file sex discrimination complaints against their employers with the EEOC. Although the appeal involved a complaint against a federal agency, private employers should be aware that the EEOC's interpretation of Title VII affects the rights of both public and private employees.

For more information on EEOC complaints, see Responding to an EEOC Charge Toolkit.