Holloway v. Arthur Andersen

Holloway v. Arthur Andersen, 566 F.2d 659 (Ninth Circuit 1977).

Factual and Procedural History: Employee worked at Accounting Firm.  Employee was male when she was hired, in 1969.  About a year later, in 1970, Employee began receiving female hormone injections.  In February 1974, Employee received a promotion.  She also revealed to her supervisor at this time that she was undergoing female hormone therapy. In June 1974, there was an annual review.  During the review, a "company official" suggested that Employee would "be happier" at a different workplace where her transsexual history would be unknown.  Employee nonetheless received a raise.  In November 1974, Employee requested that Accounting Firm use her new name. Accounting Firm did so.  Shortly thereafter, however, Employee was terminated. Employee pursued administrative remedies, but to no avail, and so filed a complaint in federal district court.  The complaint alleged impermissible discrimination on the basis of sex under Title VII.  Accounting Firm filed a motion to dismiss for (1) failure to state a claim and (2) lack of subject matter jurisdiction.  The district court ruled in favor of the Accounting Firm, holding that it did not have jurisdiction because "sex" in Title VII did not include "transsexualism".          

Outcome: Affirmed.  

Title VII and Transsexuals.  Employee argued that "sex" means "gender", which would include transsexuals.  Accounting Firm argued that "sex" means "anatomical sex". Subsequent legislation and cases show Congress had latter meaning in mind. The Equal Opportunity Employment Act, passed in 1972, which amended Title VII (but not the word "sex"), was intended to remedy the economic inequality between men and women. Cases interpreting "sex" in Title VII show the same intention.  Also, under a 'plain meaning' construction of the statute, "sex" means "traditional notions of sex".  There have been bills introduced to amend the Civil Rights Act to cover 'sexual preference', but none has been enacted.  Court can't expand meaning absent Congressional "mandate" to do so.

Equal Protection.  Employee argued that excluding coverage of transsexuals from Title VII would deny transsexauls equal protection of the laws.  A statute does not violate equal protection when it has a rational relationship to a legitimate governmental interest, unless there is a "suspect class" involved, in which case, the court applies "close judicial scrutiny".  Transsexuals are not a suspect class because (1) Transsexuals are not a "discrete and insular minority".  Graham v. Richardson, 403 U.S. 365, 372 (1971); (2)   Transsexuality is not an "immutable characteristic"; and (3) the difficulty in defining 'transsexuality' would "prohibit determination" of transsexuals as a suspect class. Rational relationship is the test to apply here, and prohibition of employment discrimination based on sex is rationally related to a legitimate governmental interest.

Transsexuals may state a claim under "sex" in Title VII if the claim is based on being male or female, but cannot state a claim based on transsexuality.  

Dissent: This is not a "sexual preference" case.  Sex change operations finish what nature left unfinished.  Employee's sex was not "stationary" during transition, but when she finished her surgery, she had a "sexual classification" under Title VII.  It's unreasonable that someone would have a cause of action post-surgery, but not before, because of being in transition.  

This case is on Google, here.