New York Federal Court Blocks Regulation Removing Protections for Gender Identity Discrimination

Federal antidiscrimination law protects against discrimination on the basis of sex in employment, education, health care, and other areas. While New York City employment discrimination law specifically mentions gender identity and gender expression, federal law only mentions sex. The U.S. Supreme Court recently ruled in Bostock v. Clayton County, Georgia that discrimination “on the basis of sex” includes sexual orientation, gender identity, and gender expression. The ruling is already having a significant impact. Shortly after the court issued its ruling, the U.S. Department of Health and Human Services (HHS) issued a final rule that removes protections for transgender patients under the Patient Protection and Affordable Care Act (ACA). A lawsuit against HHS argues that the rule violates Bostock. A federal court in New York stayed enforcement of the rule and granted a preliminary injunction.

Advocates for the rights of LGBTQ people in the workplace have long argued that discrimination against a person because of their gender identity is discrimination on the basis of sex under Title VII of the Civil Rights Act of 1964. In June 2020, the U.S. Supreme Court affirmed this view in Bostock.

Other federal statutes also prohibit sex discrimination. Title IX of the Education Amendments of 1972 bars discrimination “on the basis of sex…under any education program or activity receiving Federal financial assistance.” 20 U.S.C. § 1681(a). The ACA prohibits discrimination in “any health program or activity, any part of which is receiving Federal financial assistance” on the basis of various grounds, including sex. 42 U.S.C. § 18116(a).

HHS adopted a final rule in July 2016 which construed the ACA’s nondiscrimination provisions to include transgender individuals. The rule defines “gender identity” as “an individual’s internal sense of gender…which may be different from an individual’s sex assigned at birth.” 45 C.F.R. § 92.4. A lawsuit filed against HHS in Texas in 2016 resulted in a preliminary injunction against this provision. While an appeal was pending, a new administration took over. The new HHS Secretary decided not to pursue the appeal, leaving § 92.4 subject to a permanent injunction.

The new rule, published by HHS on June 19, 2020, would include “repeal of § 92.4 without change.” 85 Fed. Reg. 37201 (Jun. 19, 2020). The plaintiffs in the lawsuit mentioned earlier filed suit against HHS one week after publication of the rule. They allege that the new rule is contrary to Bostock, and that it violates the Administrative Procedures Act on multiple grounds, including that it goes against the language of the ACA itself and it is “arbitrary and capricious.” They are seeking declaratory and injunctive relief.

On August 17, a New York federal judge granted a stay and a preliminary injunction. The court found that the rule is arbitrary and capricious, and that it is contrary to Bostock. It held that HHS went beyond “deference to a court order” by stating its agreement with the Texas court’s ruling against the 2016 rule. HHS cited the government’s position in an appellate court case considering whether gender identity is included in the definition of “sex.” The New York court noted that the Supreme Court rejected this position in Bostock, and that HHS knew this at the time it published the rule.

Phillips & Associates’ experienced and knowledgeable employment lawyers advocate for the rights of New York City workers in claims for sex discrimination on the basis of gender identity and gender expression. To schedule a free and confidential consultation to discuss your case, please contact us today online or at (212) 248-7431.

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