Wilting Under a White-Hot Spotlight, Saks Settles Transgender Case

Saks Fifth Avenue has settled a transgender discrimination case in Texas that garnered the company much unwanted attention. 

As discussed previously on this blog, Saks' former sales employee, Leyth Jamal, claimed she was discriminated against for being transgender and constantly harassed by co-workers and managers (Jamal's a man who identifies as a woman). Saks originally argued in a motion to dismiss that transgender individuals and gender identity are not covered by Title VII of the Civil Rights Act.

Saks' motion set off a backlash from various civil rights groups and the U.S. Equal Employment Opportunity Commission that argued Saks' position was untenable given U.S. Supreme Court precedent, decisions of many federal appellate courts, and the EEOC's recent guidance on Title VII. Thereafter, Saks withdrew its motion and this settlement quickly followed undoubtedly due to the myriad negative publicity it faced when its motion became national news. Jamal's attorney commented only that the parties "amicably settled the lawsuit" while Saks had no public statement about the settlement.

So, what should companies learn from Saks' handling of the Jamal employee relations issue? Several things. First, make sure your employee policies are updated to provide the proper protection to all employees of various protected characteristics (that list is growing all the time). Second, train managers and employees about being tolerant in the workplace. Third, instruct your managers and employees (again) about how to handle a worker's complaint about harassment. Fourth, stay current on workplace discrimination issues; transgender and gender identity protection as well as how to properly respond to accommodation requests by such employees (regarding bathroom needs and appearance issues, among other things) are focal points of the EEOC. And lastly, even legal arguments that may be tenable in response to an employee's lawsuit may not be best for your company — always keep the bigger picture in mind and ask the question, "what's best for my business?

For more information or guidance, please contact Patrick Dolan.