Texas Court Vacates EEOC Guidance on Gender Identity: What California Employers Need to Know
On May 15, 2025, a federal district court in Texas vacated significant portions of the EEOC’s 2024 “Enforcement Guidance on Harassment in the Workplace”, finding that the agency exceeded its authority by expanding the definition of “sex” under Title VII of the Civil Rights Act. The court’s decision in Texas v. Equal Employment Opportunity Commission, ruled that Title VII does not require employers to accommodate preferences regarding pronouns, bathrooms, or dress based on gender identity, a sharp departure from how the EEOC had interpreted Bostock v. Clayton County.
The 2024 EEOC Guidance had defined “sex” to include both sexual orientation and gender identity, and asserted that practices such as misgendering, denying bathroom access aligned with gender identity, or enforcing dress codes tied to biological sex could constitute unlawful harassment. The Texas court concluded that this interpretation “contravenes Title VII’s plain text,” and that EEOC guidance requiring such accommodations went beyond the authority granted by Congress.
The court emphasized that Bostock only held that firing someone because of sexual orientation or transgender status is a form of sex discrimination, not that Title VII mandates recognition of gender identity in workplace policies regarding restrooms, dress codes, or pronouns. The court further cited Oncale v. Sundowner Offshore Services to reiterate that Title VII does not prohibit “genuine but innocuous differences” in how men and women interact in the workplace, nor require employers to adopt policies that “obliterate” biological distinctions.
This decision aligns with President Trump’s Executive Order 14168, which declares it the official policy of the United States to recognize only two biological sexes and directs federal agencies, including the EEOC, to update guidance accordingly. However, with only two commissioners seated, the EEOC currently lacks the quorum required to formally rescind the vacated guidance. In the meantime, the agency has shaded and labeled the vacated sections on its website to reflect the court’s ruling.
Despite this shift at the federal level, California employers must stay the course. California’s Fair Employment and Housing Act (FEHA) offers broader protections than federal law and explicitly prohibits discrimination and harassment based on gender identity and gender expression. Unlike Title VII, California law is not limited by the recent federal decision and remains fully in effect statewide.
Under FEHA and related state regulations, California employees have the right to be addressed by their chosen name and pronouns and to use facilities consistent with their gender identity or expression. Employers who fail to honor these rights may be found in violation of state anti-discrimination laws, regardless of federal enforcement priorities. Dress codes and grooming standards also cannot be imposed in ways that conflict with an employee’s gender identity or expression, unless justified by a legitimate business necessity.
Given the legal tension between state and federal standards, California employers must ensure their policies comply with the stricter, employee-protective framework imposed by California law. Ignoring California’s requirements, even if federal enforcement wanes, could expose employers to liability under state law, including lawsuits, penalties, and damage to workplace culture.
Moreover, employers may see an uptick in accommodation requests on both sides of the issue. Some employees may request accommodations based on religious objections to gender identity policies, while others may seek accommodations under the Americans with Disabilities Act for gender dysphoria. Employers must carefully navigate these requests, using an interactive process and documenting their efforts to find reasonable accommodations without undue hardship.
Ultimately, while the Texas decision limits the scope of federal enforcement, it has no impact on California’s robust legal protections for LGBTQ+ employees. Employers operating in California should remain vigilant, review workplace policies, and train supervisors to ensure compliance with FEHA, not just to avoid legal consequences, but to foster a respectful, inclusive, and legally sound work environment.
