New Protected Class, Same Old Challenges

It is well known that Title VII of the Civil Rights Act of 1964 prohibits employers from “discriminat[ing]” against any individual with respect to employment “because of such individual’s . . . sex.”  In addition, according to the US Supreme Court’s decision from 2020, Bostock v. Clayton County, discrimination on the basis of sexual orientation or gender identity is a form of sex discrimination under Title VII.  Accordingly, a plaintiff who alleges transgender discrimination is entitled to the same benefits—but also subject to the same burdens—as any other plaintiff who claims sex discrimination under Title VII.  The Fifth Circuit Court of Appeals recently came to that same conclusion in the case of Olivarez v. T-Mobile, a case involving the high-profile topic of Title VII’s protections for transgendered individuals, which ultimately turned on a basic and common proof problem faced in any discrimination case.  The Court of Appeals delivered its decision on May 12, 2021.

In Olivarez, Elijah Olivarez, a transgender individual, was employed as a retail store associate for T-Mobile between 2015 and 2018.  During the first half of 2016, a supervisor allegedly made demeaning and inappropriate comments about Olivarez’s transgender status and Olivarez filed a complaint with human resources.  In response, T-Mobile allegedly retaliated by reducing Olivarez’s hours to part-time from September to November 2016.

About one year later, in September 2017, Olivarez stopped coming to work in order to undergo egg preservation and a hysterectomy.    The next month, Olivarez requested leave to be applied retroactively from September to December 2017.  T-Mobile’s benefits administrator granted Olivarez’s unpaid leave from September 23 to December 17 and paid medical leave from December 17 to December 31.  In addition, the T-Mobile granted Olivarez’s request for an extension of leave through February 18, 2018 but denied a further extension of leave in March 2018.

About one month later, in April 2018, T-Mobile terminated Olivarez’s employment.  The EEOC issued a right-to-sue letter to Olivarez on August 2019 and Olivarez quickly filed suit against T-Mobile.  Olivarez’s complaint asserted (1)  interference,  discrimination,  and retaliation under the FMLA,  (2) discrimination and retaliation under Title VII of the Civil Rights Act of 1964,  and  (3)  discrimination under the Americans with Disabilities Act (“ADA”).  However, following motions from T-Mobile, the district court granted T-Mobile’s motion to dismiss on the ground that Olivarez’s complaints failed to allege that Olivarez was treated less favorably than similarly situation employees outside Olivarez’s protected class.  The matter was eventually appealed up to the Fifth Circuit Court of Appeals.

During its review, the Fifth Circuit Court of Appeals noted that Olivarez’s Title VII discrimination claim “relies entirely on circumstantial evidence, and is therefore subject to the burden-shifting framework outlined in McDonnell Douglas Corp. v. Green.  Under McDonnell Douglas, a plaintiff must establish a prima facie case of discrimination.  Specifically, a plaintiff must allege facts sufficient to support a finding “that he was treated less favorably than others outside of his protected class.”

Thereafter, the court found that Olivarez failed to plead any facts indicating less favorable treatment than others “similarly situated” outside of the asserted protected class.  In fact, Olivarez’s complaint did “not contain any facts about any comparators at all.  The complaint simply indicates that Olivarez took six months of leave from September 2017 to February 2018—including an extension granted by T-Mobile . . . —and that when Olivarez requested additional leave in March 2018, T-Mobile denied the request and terminated Olivarez’s employment in April 2018.”  Notably,  there  were no  allegation  that  any  non-transgender  employee  with  a  similar  job  and  supervisor  and  who  engaged  in  the  same  conduct  as  Olivarez received more favorable treatment.

Furthermore, the Court of Appeals found that Olivarez’s ADA discrimination claim failed for similar reasons.  A prima facie case of discrimination under the ADA requires a plaintiff to allege a disability, that they were qualified for their position, and that they suffered an adverse employment action because of their disability.  The court concluded that Olivarez failed to sufficiently allege an adverse employment action because of a disability.  At most, Olivarez made a conclusory allegation that T-Mobile “discriminated against [Olivarez] based on [a] disability.” But the rules of pleadings require more; a complaint will survive dismissal only if it pleads factual content that allows a court to draw a “reasonable inference that the defendant is liable for the misconduct alleged.”

To put a fine point on the discussion, the court directly addressed Bostock’s impact on this case.  The court found that while Bostock defined sex discrimination to encompass sexual orientation and gender identity discrimination, it did not alter the meaning of discrimination itself, meaning it did not alter the requirements for a plaintiff under Title VII.  Accordingly, a plaintiff who alleges transgender discrimination is entitled to the same benefits—but also subject to the same burdens—as any other plaintiff who claims sex discrimination under Title VII.

As such, while Elijah Olivarez alleged transgender discrimination under Title VII, Olivarez did not allege facts sufficient to support an inference of transgender discrimination—that is, that T-Mobile would have behaved differently toward an employee with a different gender identity.  So, what was the court left with? A situation where an employer discharged a sales employee who happens to be transgender—but who took six months of leave, and then sought further leave for the indefinite future.  “That is not discrimination—that is ordinary business practice.”