If an employee identifies as transgender, employers may want to engage in the interactive process with the employee to protect themselves against potential claims for disability discrimination under the Americans with Disabilities Act (“ADA”). But why, when the ADA specifically excludes “transsexualism” and “gender identity disorders not resulting from physical impairments” as within the meaning of “disability”? Because gender dysphoria –the condition of feeling one’s emotional and psychological identity as male or female to be opposite to one’s biological sex – may be a disability protected by the ADA.
In May 2017, the Eastern District of Pennsylvania held in Blatt v. Cabela’s Retail, Inc. that it was possible to “interpret the term gender identity disorders narrowly to refer to simply the condition of identifying with a different gender, not to exclude from ADA coverage disabling conditions that persons who identify with a different gender may have…such as  gender dysphoria, which substantially limits [the] major life activities of interacting with others, reproducing, and social and occupational functioning.” Thus, the plaintiff’s disability discrimination/failure to accommodate claim under the ADA survived a motion to dismiss. The Blatt opinion can be found here.
On the other hand (and like many other district courts), in April 2018 in Parker v. Strawser Construction, Inc., the Southern District of Ohio dismissed a transgender employee’s ADA claim when it held that the ADA exclusion applied to all gender identity disorders not resulting in physical impairments “without any regard to whether the gender identity disorder is disabling.” Thus, the Parker court reasoned that Congress intended for both non-disabling and disabling gender identity disorders not resulting from physical impairments to be excluded from the ADA’s protection. The Parker opinion can be found here.
Despite the Parker case, the times and the law could be a changin’ with the development of new research regarding the brain structure and activity in children diagnosed with gender dysphoria. Indeed, a recent study conducted by a team of researchers at the University of Liege in Belgium and at the VU University Medical Center in the Netherlands looked at the MRI scans of approximately 160 children and discovered that their brain structure and activity was similar to the sex the children identified with and not their biological sex. Although the testing may prove useful in diagnosing children with gender dysphoria at an earlier stage of development, it may also provide medical evidence to support a claim that gender dysphoria is a disability under the ADA, if the condition causes clinically significant stress or other impairments.
With the split in authority at the District Court level, it seems that employers may not need to completely transform their practices regarding transgender employees at this time. Nevertheless, employers may want to consider the potential exposure to liability under the ADA if the employer employs any transgender employees.