A jury should decide whether a transgender employee caught sleeping on the job in a customer’s car was unlawfully terminated because of her transgender status, the Eleventh Circuit Court of Appeals has ruled. Although the employer had initially persuaded the trial court to rule in its favor, a three-judge  panel from the Eleventh Circuit (covering Florida, Georgia and Alabama) reversed that ruling and said the employee submitted enough evidence of unlawful motivation to get to a jury.

In Chavez v. Credit Nation Auto. Sales, LLC, No. 14-14596 (11th Cir. Jan. 14, 2016), the plaintiff/employee, an auto mechanic, was never disciplined before she announced her gender transition in October 2009. The company owner allegedly stated he was “very nervous” about her gender transition and thought it would “negatively impact” the business. Further, the employee – who was born a male but identified as a female – was asked not to wear a dress to work, and not to voluntarily discuss her transsexuality with anyone.

Ms. Chavez was fired in January 2010, purportedly for sleeping in a customer’s car while on the clock at the workplace. Though she admitted to this conduct, she claimed that she was fired based on being transgender.  The trial court entered summary judgment for Credit Nation in 2014.

In a surprising decision, the appellate court found that Ms. Chavez’s admission of sleeping on the clock did not mandate judgment for Credit Nation. The appellate court agreed that Ms. Chavez did not present direct evidence of discriminatory intent, nor did she show that Credit Union’s stated reason for terminating her was a pretext for discrimination.  But, the appellate court said, she could still bring her claims to a jury if she could show that bias against her transgender status was “a motivating factor” in her termination, even if there were other, legitimate factors motivating the decision as well. The court said Ms. Chavez presented enough circumstantial evidence to show a “discriminatory animus” on the part of Credit Nation and had also presented evidence suggesting Credit Nation subjected her to a “heightened scrutiny” after learning about her gender transition, demonstrating that Credit Nation was simply looking for a legitimate reason to terminate her.

In addition to the owner’s remarks, the appellate court found evidence of bias in the company’s failure to follow its four-step progressive discipline policy and in terminating her for sleeping on the job where the policy did not list that as one of the offenses for which progressive discipline could be bypassed resulting in immediate termination.

This decision highlights how off-hand comments and work rules may critically damage an employer’s position in litigation. The decision also shows that even if an employer has a legitimate reason for discharge, which the employee admits, the employee may still be able to bring a claim if there is evidence that discrimination was at least a “motivating factor” in the decision to terminate.  Employers are therefore cautioned regarding the need for consistent and uniform application of discipline.  Finally, the decision again confirms that Title VII protections apply to transgender persons.

In the wake of Chavez, employers should ensure their policies and procedures bar discrimination or harassment based on sex, sexual orientation or gender identity.