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A Texas federal district court judge has ruled that guidance issued by the U.S. Department of Health and Human Services (HHS) and the U.S. Equal Employment Opportunity Commission (EEOC) banning gender identity discrimination is unlawful. Accordingly, the court vacated the HHS and EEOC guidance; its decision is effective nationwide.
The EEOC issued guidance on gender identity discrimination under Title VII of the Civil Rights Act in June 2021 in response to the U.S. Supreme Court’s ruling in Bostock v. Clayton County. The HHS also issued guidance on Section 1557 of the Affordable Care Act (ACA) in March 2022. That guidance stated that the sex discrimination that Section 1557 prohibits includes gender identity discrimination. HHS issued the guidance at least in part in response to the Texas governor’s order disallowing certain gender-transition-related procedures for adolescents suffering from gender dysphoria.
The state of Texas sued DOL and HHS, arguing that the guidance was unlawful. The district court agreed, finding that the agencies violated the Administrative Procedure Act (APA) by issuing substantive rules through improper procedures. The court also argued that the HHS guidance was arbitrary and capricious, as it appeared to misstate the law articulated in Bostock.
It is unclear whether HHS or DOL intends to appeal the ruling, especially in light of other pending court cases concerning mandatory ACA coverage of gender-affirming health care and related medical procedures. (See, for example, Franciscan Alliance v. Becerra, Braidwood Management v. Becerra, and The Religious Sisters of Mercy et al. v. Becerra, et al., case number 21-1890, U.S. Court of Appeals for the Eighth Circuit.) Meanwhile, HHS has affirmed its commitment to continue revising and issuing new regulations to support its interpretation of Title VII as prohibiting discrimination based on gender identity.
HBL has experience in all areas of benefits and employment law, offering a comprehensive solution to all your business benefits and HR/employment needs. We help ensure you are in compliance with the complex requirements of ERISA and the IRS code, as well as those laws that impact you and your employees. Together, we reduce your exposure to potential legal or financial penalties. Learn more by calling 470-571-1007.
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