Labor & Employment Law Daily Wrap Up, PROCEDURE—N.D. Tex.: Gender-identity portions of EEOC’s 2024 Guidance vacated, (May 21, 2025)

By Kathleen Kapusta, J.D.

“By redefining the core definition of ‘sex,’ the Enforcement Guidance fundamentally reshapes the scope of Title VII.”

Explaining that “Title VII remains rooted in a biological understanding of sex” and “does not require employers or courts to blind themselves to the biological differences of men and women,” a federal court in Texas found that the EEOC’s 2024 Enforcement Guidance on Harassment in the Workplace contravened Title VII by expanding the definition of “sex” to include sexual orientation and gender identity and by requiring employers to accommodate an employee’s dress, bathroom, or pronoun requests. Accordingly, the court vacated the gender-identity related portions of the guidance (State of Texas v. EEOC, No. 2:24-CV-173-Z (N.D. Tex. May 15, 2025)).

In 2021, the then EEOC Chair issued a “technical assistance” document, Protections Against Employment Discrimination Based on Sexual Orientation or Gender Identity, which outlined the agency’s stance on Title VII discrimination. Among other things, the 2021 Guidance stated that “employers may not deny an employee equal access to a bathroom, locker room, or shower that corresponds to the employee’s gender identity,” that “[p]rohibiting a transgender person from dressing or presenting consistent with that person’s gender identify would constitute sex discrimination,” and that “intentionally and repeatedly using the wrong name and pronouns to refer to a transgender employee could contribute to an unlawful hostile work environment.”

Prior guidance vacated. After Texas challenged the 2021 Guidance, the court found that it was a final agency action and vacated it as unlawful.

New guidance. In 2024, following a 30-day period for public comment, the EEOC issued a new Enforcement Guidance on Harassment in the Workplace. The 2024 Guidance defines “sex” as “pregnancy, childbirth, and related medical conditions and sexual orientation and gender identity.” Although it states that its contents “do not have the force and effect of law” and “are not meant to bind the public in any way,” it provides that sex-based harassment includes harassment based on sexual orientation and gender-identity, including how that identity is expressed. It also states that sexual harassment includes “repeated and intentional use of a name or pronoun inconsistent with the individual’s known gender identity (misgendering)” and denial of access to a bathroom or other sex-segregated facility consistent with the individual’s gender identity.”

Lawsuit and Executive Order. Challenging the 2024 Guidance as, among other things, contrary to law, Texas and the Heritage Foundation sued the EEOC. Ten days after briefing on cross-motions for summary judgment closed, President Trump issued Executive Order 14168, “Defending Women from Gender Ideology Extremism and Restoring Biological Truth to Federal Government,” which directed the EEOC to immediately rescind the Guidance. After three EEOC Commissioners affirmed their support for LGBTQI workers, Trump removed two of them from office and the EEOC, as a result, lacked the quorum needed to formally rescind the EO.

Justiciability. Addressing the justiciability of the plaintiffs’ claims, the court found the 2024 Guidance was a final agency action. Promulgated by the EEOC after notice and comment, it was the consummation of the agency’s decisionmaking process. And while the EEOC argued that it was a mere survey of Title VII jurisprudence, the court, disagreeing, pointed to the Guidance’s use of mandatory phrasing to describe employers’ Title VII responsibilities, finding it effectively binds the EEOC to particular legal positions from which legal consequences flow.

It also contains a myriad of hypotheticals outlining what an employer may not do, including requiring an employee to wear clothing consistent with his biological sex or refusing to use pronouns inconsistent with biological sex. Noting that each hypothetical fact pattern constitutes discriminatory harassment in violation of Title VII, the court found the practical effect was clear: “the Guidance is EEOC’s authoritative statement of what it considers sex-based discrimination in violation of Title VII. It defines employers’ legal obligations and thereby establishes standards from which legal consequences will flow.”

The Guidance also creates safe harbors, said the court, noting that it proclaims that employers should preemptively accommodate all transgender employees’ bathroom, dress, and pronoun requests to avoid the headache of litigation. “The practical effect of the Enforcement Guidance,” the court reasoned, “is an unmistakable message to employers: it’s better to be safe than sorry.”

Disclaimer. And while it states that its contents “do not have the force and effect of law, are not meant to bind the public in any way, and do not obviate the need for the EEOC and its staff to consider the facts of each case and applicable legal principles when exercising their enforcement discretion,” this type of boilerplate language, said the court, did not automatically prevent the Guidance from being final agency action.

Further, the court observed, the Guidance acknowledges that it more than summarizes Title VII case; instead, it “fundamentally expands Title VII to include harassment based on gender identity.” Thus, the court found the Guidance was a final agency action.

Standing. Next, the court found that Texas has standing to bring the lawsuit as it proved a sufficiently particularized concrete injury. Texas employs hundreds of thousands of people and is directly affected by the Guidance’s requirements that employers accommodate transgender pronoun, bathroom, and dress requests. Noting that Texas maintains contrary policies on many of these issues, the court pointed out that compliance with the Guidance would generate significant costs in, among other things, revising existing policies, drafting additional policies, and analyzing agency by agency the risk of EEOC investigations arising from the Guidance’s standards. These costs alone, said the court, constitute an irreparable injury.

The Heritage Foundation, which employs approximately 300 people, also demonstrated a concrete injury as, like Texas, it would have to “devote significant time and resources to creating or updating policies, customs, and training programs” to comply with the Guidance, which would also result in significant costs.

Contrary to law. Further, the court found the Guidance was contrary to law as it contravenes Title VII’s plain text by expanding the scope of “sex” beyond the biological binary. Title VII, observed the court, defines “sex” to also include “pregnancy, childbirth, or related medical conditions,” while the Guidance states that “sex” under Title VII “includes ‘pregnancy, childbirth, and related medical conditions’ and sexual orientation and gender identity.” Though the Guidance references Bostock v. Clayton County, Ga., to bolster its transgender dress, pronoun, and bathroom rules, Bostock, the court observed, “expressly refused to redefine ‘sex’ under Title VII.” Thus, it could not authorize the Guidance’s expansion of “sex” to include new categories or classes.

Misreading of Bostock. “Beyond its misreading of Bostock,” the court stated, “the Enforcement Guidance cites no binding authority for its metastasized definition of ‘sex.’” In redefining the definition of “sex,” the Guidance reshaped the scope of Title VII and exceeded its authorization to issue procedural rules governing the statute’s implementation. Because the EEOC can only issue procedural rules implementing Title VII as written and interpreted by the Supreme Court, the Guidance’s expansion of “sex” was contrary to law.

In addition, the court continued, the Guidance contravenes Title VII by defining discriminatory “harassment” to include transgender bathroom, pronoun, and dress preferences. As already explained, the court noted that it contravenes Title VII’s text by effectively requiring employers to provide accommodations to all transgender employees to avoid the threat of litigation. Neither Title VII nor Bostock, the court explained, bar workplace policies that protect the inherent differences between men and women. Indeed, in Bostock, the Court explicitly stated that “[u]nder Title VII... we do not purport to address bathrooms, locker rooms, or anything else of the kind.”

Because the Bostock Court refused to extend its reasoning beyond the question and facts before it—whether firing an employee for being transgender constituted Title VII “sex” discrimination under its but-for causation test—the court pointed out that it expressly declined to answer the question here: does the employer violate Title VII by declining the transgender employee’s bathroom, pronoun, and dress preferences via accommodation? “Distilled to its Title VII essence,” the court observed, “the question is even simpler: do sex-specific bathroom, dress-code, and pronoun policies expose members of one sex to ‘disadvantageous terms’ not shared by members of the other sex?”

They do not, the court concluded, noting further that Congress, after Bostock, did not amend Title VII to include sexual orientation and gender identity or to add explicit accommodations for them. And while Congress has the authority to amend statutes, the EEOC does not. “Yet,” said the court, “that’s exactly what the Enforcement Guidance does.” Accordingly, the court found the Guidance contravenes Title VII by expanding the definition of “sex” beyond the biological binary and requiring employers to accommodate an employee’s dress, bathroom, or pronoun requests.

Vacatur. Though the plaintiffs asked the court to vacate the entire Guidance, it found vacatur of only the unlawful portions appropriate. The gender-identity provisions make up only a fraction of the overall Guidance and are easily identified. It also found appropriate under Fifth Circuit precedent universal vacatur of those portions.

No permanent injunction. The court, however, declined to permanently enjoin the EEOC from ever “interpreting, applying, or enforcing” Title VII to require Texas or the Heritage Foundation to accommodate transgender employees’ requests to use pronouns inconsistent with their biological sex, use bathrooms or locker facilities inconsistent with their biological sex, or dress inconsistently with their biological sex as they failed to demonstrate irreparable harm sufficient to justify the broad scope of the requested injunctive relief.

The case is No. 2:24-CV-173-Z.

Judge: Kacsmaryk, M.

Attorneys: Ryan Daniel Walters, Office of the Texas Attorney General, for State of Texas. Jacob S. Siler, U.S. Department of Justice, for the EEOC. Andrew Wade Smith (Boyden Gray) for The Heritage Foundation.

Companies: The Heritage Foundation

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