Last month, the Fifth Circuit issued a ruling in a case in which a transgender woman claimed Phillips 66 Company fired her on the basis of her transgender status. In Wittmer v. Phillips 66 Co., the Court rejected the district court’s ruling that Title VII does prohibit transgender discrimination. Wittmer v. Phillips 66 Co., 915 F.3d 328 (5th Cir. 2019). However, the Fifth Circuit ultimately declined to resolve whether Title VII protects against discrimination on the basis of sexual orientation or transgender status. Instead, the Fifth Circuit affirmed the district court on the grounds the employee failed to present sufficient evidence to support a prima facie case of discrimination and because the employee failed to present a genuine issue of material fact concerning pretext for the decision to terminate.

Nicole Wittmer, a transgender woman, applied for position with Phillips 66 in 2015. Phillips 66 conducted four interviews, including an in-person interview on August 3. During these interviews, Phillips 66 asked about Wittmer’s current employment with Agrium. Wittmer claimed on-going projects at Agrium requiring significant future travel to Canada as the reason for the job search. On August 10, Phillips 66 offered Wittmer the job, contingent on passing certain background checks. On September 2, Ellen Fulton, Phillips 66’s Human Resources Manager, informed Wittmer the background check uncovered a discrepancy: Agrium terminated Wittmer on July 28, with pay continuing through August 2. In response, Wittmer acknowledged the discrepancy, but did not think “it was that big of a deal.” Several Phillips 66 executives conferred on September 8. Everyone at the meeting agreed to rescind the offer of employment due to Wittmer’s misrepresentations.

On September 10, Wittmer sent an unsolicited email to Fulton and another Phillips 66 employee, accusing them of transgender discrimination. Fulton informed Wittmer Phillips 66 was not aware of her transgender status prior to the email, and the information would not affect their hiring decision. On September 14, Fulton formally rescinded the offer of employment due to the discrepancies revealed during the background check after the initial conditional offer. A year later, in October 2016, Wittmer filed a charge of discrimination with the EEOC against Phillips 66. Wittmer claimed Phillips 66 rescinded its offer because of her transgender status. The EEOC issued a right-to-sue letter. Wittmer sued Phillips 66 under Title VII for discrimination on the basis of transgender status. The district court held Title VII does prohibit discrimination on the basis of transgender status. The Fifth Circuit took up the case on appeal.

The Fifth Circuit opinion briefly discussed its 1979 ruling in Blum v. Gulf Oil Corp., where the Court held Title VII does not prohibit discrimination on the basis of sexual orientation. Blum v. Gulf Oil Corp., 597 F.2d 936 (5th Cir. 1979). The Fifth Circuit reiterated Blum remains binding precedent, and other district courts in the Fifth Circuit repeatedly acknowledged that Blum is binding in past rulings. However, the Fifth Circuit affirmed the lower court on other grounds.

Ultimately, the Fifth Circuit upheld summary judgment for Phillips 66 after analyzing the McDonnell Douglas burden-shifting analysis for discrimination claims. Under the McDonnell Douglas framework, the plaintiff carries the burden to prove (1) he belongs to a protected class; (2) he applied for and was qualified for the position; (3) he was rejected despite being qualified; and (4) others similarly qualified but outside the protected class were treated more favorably. McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802 (1973). See also Willis v. Coca Cola Enters., Inc., 445 F.3d 413, 420 (5th Cir. 2006).

The Fifth Circuit held Wittmer’s claim failed on two counts. To begin with, Wittmer failed to establish a prima facie case of discrimination. Specifically, Wittmer did not present evidence that any non-transgender applicants were treated better, as required under the fourth prong of McDonnell Douglas. See Rogers v. Pearland Indep. Sch. Dist., 827 F.3d 403, 408-09 (5th Cir. 2016) (upholding summary judgment for failing the fourth prong of the prima facie case).

In addition, the Court held Phillips 66 identified a legitimate, non-discriminatory reason for rescinding the offer—namely, Wittmer’s misrepresentations. Wittmer’s own deposition testimony confirmed the misrepresentations regarding her on-going employment relationship with Agrium, as well as her claims about leaving the job due to required travel to Canada. Moreover, Phillips 66 offered evidence it decided to rescind the offer due to the discrepancies uncovered in the background check—and it did so two days before anyone at the company ever learned of Wittmer’s transgender status.

While the majority opinion discussed Blum, it ultimately failed to resolve whether Blum prohibits discrimination on the basis of sexual orientation or transgender status. Accordingly, employers should refrain from discrimination on the basis of sexual orientation or transgender status, lest they want to become a test case themselves.

Note: The U.S. Supreme Court agreed this week to hear cases from three LGBTQ workers regarding whether Title VII of the 1964 Civil Rights Act prohibits discrimination on the basis of sexual orientation and gender identity. Stay tuned for future Client Alerts detailing any rulings from the Supreme Court on this issue.

 

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