Saks settles high profile transgender discrimination suit

Saks Fifth Avenue recently settled a transgender discrimination suit that produced significant negative publicity and “garnered the company much unwanted attention.”

In September 2014, Saks Fifth Avenue employee Leyth Jamal filed an employment discrimination lawsuit in Texas against her employer alleging discrimination and hostile work environment based on her gender identity.

She claimed she experienced discrimination from management and coworkers, including being prohibited from using the women’s restroom, and being asked by a fellow sales associate if she is a prostitute. Ten days after filing a complaint with the EEOC, Saks terminated Jamal’s employment.

Saks response backlash

In response to filing a motion to dismiss, Saks legal response sparked outrage from the EEOC and gender rights activists, and motivated coverage in national news. Saks’ motion argued that Title VII protection does not apply to transgender employees. 

Human Rights Campaign (HRC) and the National Center for Lesbian Rights (NCLR) demonstrated their support for Jamal by producing a joing friend-of-the-court brief in Southern District of Texas court where the case was being tried. Saks settled the lawsuit but still claims it did not terminate Jamal because of her gender identity, but because of “inappropriate language on the sales floor.”

Jamal was represented by Jillian T Weiss (Law Office of Jillian T. Weiss PC) and Mitchell Katine (Katine & Nechman LLP) and Saks was represented by Michael D. Mitchel (Ogletree Deakins Nash Smoak & Steward PC).

What can employers learn?

2014 was a year of legal advancement for the protection of transgender discrimination. US Attorney General Eric Holder announced that the US Department of Justice will no longer specify that Title VII excludes gender identity. Additionally, the Equal Employment Opportunity Commission (EEOC) filed complaints in Florida and Michigan against two employers accused of discriminating against transgender employees.

Patrick Dolan of Hinshaw & Culbertson LLP explores what companies can learn from Saks’ handling of this case. He suggests employers consider the following:

• Ensure that employee policies are up to date and provide protection to employees of all protected characteristics, as this list is always being updated to protect more classes
• Train managers and employees about tolerance in the workplace to avoid the creation of a hostile work environment
• Instruct managers and employees on how to handle harassment complaints
• Stay current on workplace discrimination issues highlighted by the EEOC
• When responding to claims of discrimination, consider how your response will impact your business. “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.”