August 2004 Newsletter Headlines

Transsexuals Entitled to Title VII Protection
Investigation Blunder Leads to $21 Million Verdict
Claims of National Orgin Discrimation Continue to Rise

Transsexuals Entitled to Title VII Protection

Does your non-discrimination or equal employment opportunity policy prohibit discrimination against transgender employees? If it doesn't’t, you may want to consider revising your policy. In a recent case before the Sixth Circuit Court of Appeals, Smith v. City of Salem, Ohio, the appellate court overturned the trial court’s order dismissing a sex discrimination claim brought by a transsexual firefighter.

The case arose when Jimmie Smith, a firefighter with the Salem Fire Department, was confronted by several of his coworkers for not being “masculine enough.” Smith, who had been diagnosed with gender identity disorder (GID - a dysfunction between an individual’s sexual organs and sexual identity) approached his supervisor and advised him of his condition and intent to transform from a male to a female. Although Smith asked and his supervisor agreed not to share the information with anyone, his supervisor advised the fire chief of Smith’s condition and intent. The fire chief met with the City legal director and other City executives who agreed to force Smith to undergo three separate psychological evaluations with City selected doctors in an attempt to either force Smith to quit the department or to be fired for insubordination, if he refused any of the evaluations.

Smith learned of the City’s plan and filed a charge with the Equal Employment Opportunity Commission and eventually a lawsuit against the City. Smith alleged several claims against the City, including sex discrimination in violation of Title VII. The District Court dismissed Smith’s Title VII claim on the grounds that Title VII protections were unavailable to transsexual individuals. Smith appealed the dismissal to the appellate court, which overturned the dismissal holding that “discrimination based on transsexualism is rooted in the insistence that sex (organs) and gender (social classification of a person as belonging to one sex or the other) coincide. This is the very essence of sex stereotyping.” As a result, Title VII applies to claims of harassment and discrimination based upon an employee’s transgender status. This is true in at least the Sixth Circuit.

Best Practices Note: Companies should conduct at least an annual review of company policies and procedures to ensure that they continue to be in line with the law. Do not rely solely on prohibitions against harassment or discrimination based on sex to put mangers and employees on notice that discrimination against transgender employees is in violation of the law. Clearly communicate your policy against such discrimination and harassment and conduct training to reinforce the policy.

Full Opinion Smith v. City of Salem, Ohio,.

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Investigation Blunder Leads to $21 Million Verdict

Passing out copies of the company’s harassment policy and asking male employees if they had sexually harassed a female employee does not constitute an effective investigation as the officials at DaimlerChrysler recently learned.

Linda Gilbert, an employee at Daimler’s Jefferson North Assembly plant in Detroit, filed suit against DaimlerChrysler alleging that the company’s “failure to adequately deal with sexual harassment at her plant led to a permanent change in her brain chemistry and a relapse into substance abuse and depression and that these conditions will soon lead to her untimely excruciating death.” At the trial one employee in Daimler’s human resources department admitted that the investigation was inadequate. Another employee said that he would not “even know where to begin a sexual harassment investigation." There was also testimony that the investigation was not systematically undertaken. Male employees were only questioned if the investigator happened to “run into them.” And when no one came forward to admit to harassing the plaintiff the investigation ceased.

The Michigan Supreme Court overturned the verdict on the grounds that the trial court erred in permitting prejudicial argument when the trial court allowed Gilbert’s counsel to compare her to a Holocaust survivor. The court found the verdict to be excessive and based on passion and prejudice rather than reason. The Michigan Supreme Court did, however, note that Gilbert had made out a claim for sexual harassment worthy of a verdict. The dissent was of the opinion that Gilbert had put forth sufficient evidence to support the verdict because (1) Gilbert was the victim of sexual harassment and (2) the Company did not engage in an adequate investigation or take remedial action to stop the harassment.

Best Practices Note: How a company conducts an investigation is just as important as whether a company conducts an investigation. Human resources professionals should partner with their legal counsel, whether internal or external, when faced with significant employment practices issues. Companies that seek to do their own internal investigation should only do so if they have well trained competent investigators available. The cost of retaining external counsel and/or investigators is well worth it when compared to the possible repercussions of mishandling an investigation, as seen by the above case.

Full Opinion DaimlerChrysler v. Gilbert

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Claims of National Origin Discrimination Continue To Rise

A recent study conducted by the University of Michigan shows that in the wake of the attacks of September 11, 2001, and the increased emphasis on the war on terrorism, Arab-Americans continue to face harassment, discrimination and abuse. The survey of Muslim Arabs in Detroit -- an area with one of the largest concentrations of Arab Americans in the nation - revealed that most of the respondents are more concerned with the safety and well-being of their families now than just following the attacks of 9/11.

The most frequent form of abuse cited by the respondents consisted of derogatory comments, but many of the respondents reported harassment in public places such as malls and problems in the work-place. Stereotypes and misinformation about Arabs and Chaldeans – mostly Iraqi Christians - seemed to be at the root of the discrimination and harassment suffered by the respondents according to Wayne Baker, the Institute for Social Research professor, who led the Michigan study.

The Equal Employment Opportunity Commission has reported an increase in national-origin and/or religious discrimination charges since the attacks of September 11, 2001.

Best Practices Note: The best way to combat stereotypes and misinformation in the workplace is to conduct effective training. Employers are required to provide work environments free of harassment and discrimination. Diversity training which raises the awareness of each employee of his or her obligation to accept differences of fellow employees and the value of diversity in the workplace is one of the best ways for employers to decrease their potential liability.

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