Labor & Employment Legal Alert – Key Portions of EEOC Enforcement Guidance on Harassment Based on Gender Identity and Sexual Orientation Declared Unlawful

On May 20, 2025, the Equal Employment Opportunity Commission (EEOC) announced that significant portions of its Enforcement Guidance on Harassment in the Workplace—approved on April 29, 2024—were declared unlawful and vacated by a court ruling in Texas, et al. v. EEOC, 2:24-CV-173 (N.D. Tex.). The court held that the EEOC exceeded its authority by interpreting Title VII of the Civil Rights Act of 1964 to include protections against harassment based on gender identity and sexual orientation.

Key Portions of the EEOC Guidance Vacated: 

The EEOC’s guidelines mandate that “Sex-based discrimination under Title VII includes employment discrimination based on sexual orientation or gender identity” has been vacated. Consequently, all related examples of prohibited discrimination provided in the guidance were also vacated, including:

• General prohibition of harassment based on gender identity and sexual orientation: The court ruled that while Title VII prohibits sex discrimination, it does not extend to discrimination based on gender identity or sexual orientation.
• Misgendering and pronoun usage: The guidance advised employers to avoid intentional and repeated misgendering; however, the court found that Title VII does not require such practices.
• Restroom and locker room access: The EEOC recommended allowing transgender employees to use facilities corresponding to their gender identity, but the court determined Title VII does not mandate this accommodation.
• Dress codes based on gender identity: The guidance suggested that enforcing dress codes conflicting with an employee’s gender identity could constitute harassment; the court rejected this interpretation.
• Outing: The guidance advised that the disclosure of an individual’s sexual orientation or gender identity without permission was a form of discrimination under Title VII.  That portion was also vacated by the court.

This decision highlights ongoing legal debates over the scope of Title VII protections for LGBTQ+ employees. While the ruling does not change federal law, it removes the EEOC’s expanded interpretations from official guidance, affecting how employers address harassment claims related to gender identity and sexual orientation.

Covered Employers Under Title VII Include:  

• Private Employers: Must have 15 or more employees for each working day in 20 or more calendar weeks in the current or preceding year.
• Federal Government Agencies
• State and Local Governments
• Employment Agencies
• Labor Organizations (Unions)
• Includes those representing employees in industries affecting commerce.
• Joint Employers and Integrated Enterprises
• When two or more businesses share control over an employee or function together as one employer, they may jointly meet the 15-employee threshold.

Employers should review and update their policies accordingly to ensure compliance with the current legal landscape following this ruling.

Members of our Labor & Employment practice group are available to answer any question or assist with these new amendments.

Please contact us at labor@estrellallc.com.