Over the past several months, EmployNews reported a growing trend of claims alleging that discrimination on the basis of sexual orientation and transgendered status violates Title VII if the alleged conduct involves gender stereotyping. Last month, the federal Department of Justice lent further credence to this theory by reversing its previous position that such claims were outside Title VII’s coverage.

DOJ issued a memorandum to U.S. Attorneys across the country, advising them that the prior opinion is no longer legally viable, and that they are free to pursue Title VII claims where the employer is discriminating against an employee based on their perception of how persons of a certain gender should appear and behave. This position has limited impact, because DOJ’s enforcement powers under Title VII only extend to public employees.

However, this position echoes that taken by other government agencies. The Department of Labor’s Office of Federal Contract Compliance Programs published new regulations that will specifically prohibit discrimination by federal contractors based on sexual orientation and gender identity later this year. In the meantime, the agency has stated that federal contractors are prohibited from discrimination based on gender stereotyping. The Equal Employment Opportunity Commission has also adopted this position in response to administrative charges filed with that agency.

This legal approach may still face challenges at the federal appellate level. For the time being, employers should understand the litigation risks associated with actions that could be characterized as gender stereotyping.