Transgender workers remain protected from discrimination under Title VII of the Civil Rights Act of 1964 despite President Donald J. Trump’s Jan. 20 signing of Executive Order 14168, stating the government will only recognize two genders, experts say.

The executive order, though, coupled with the changing composition of the U.S. Equal Employment Opportunity Commission, will likely result in less litigation from the agency on behalf of transgender workers.

“Given the lack of an EEOC quorum, what I don’t think we’re going to see short term is a groundswell of EEOC systemic litigation targeting transgender status,” said Chicago-based Christopher DeGroff, an employment and labor partner at Seyfarth Shaw LLP.

Just over a week after the order was signed, EEOC Acting Chair Andrea Lucas announced that the agency was rolling back gender ideology information on its website and guidance documents. The order’s full implementation will likely face legal challenges from individuals and groups, experts say.

“I am worried about some workplaces rolling back their protections for transgender employees prematurely before any changes are enforceable. That is a huge danger,” said Caius Willingham, senior policy analyst for Advocates for Trans Equality.

The group expects legal challenges to the executive order and resulting changes in guidance, he said.

The changing composition of the EEOC in the wake of the executive order has some experts wondering how the agency will protect the rights of transgender workers.

President Trump fired Democratic EEOC commissioners Charlotte Burrows and Jocelyn Samuels on Jan. 29. Both were appointed by President Joseph R. Biden, and their terms were not set to expire until 2028 and 2026, respectively.

Their firings brought the EEOC below the three commissioners needed for a quorum, which is required to implement executive orders within its purview. A vote by the commissioners is necessary for undertaking major enforcement actions, releasing or rescinding major guidance, and engaging in notice, comment and rulemaking, Mr. Willingham said.

President Trump made another significant change by appointing Andrew Rogers as the EEOC’s acting general counsel. Mr. Rogers previously worked with Acting Chair Lucas during her prior tenure as head of the agency, the EEOC said in its Feb. 4 announcement.

The decision to appoint Mr. Rogers “appears to create more solidarity within the agency to follow the president’s marching orders,” Mr. DeGroff said.

“His appointment will amplify, rather than challenge or mitigate, Acting Chair Lucas’ stance on key issues,” he said.

Changes within the EEOC affect the types of claims it will pursue and underscore the importance of having adequate employment practices liability insurance, said Kelly Thoerig, Richmond, Virginia-based EPLI and wage and hour product coverage leader at Marsh LLC.

Even though changes at the agency indicate that its enforcement agenda is “in flux,” people should still know that “Title VII is still the law of the land,” said Sheila M. Abron, Columbia, South Carolina-based employment law partner at Fisher Phillips LLP.

“Companies should also be aware of their compliance obligations with state laws that protect workers against discrimination,” she said.

Several states recognize nonbinary as a third gender, Ms. Abron said.

The text of the executive order regarding the protection of the rights of “biological women” could lead to amendments of Title VII and “raises the specter of the government targeting employers with inclusive bathroom policies for creating hostile work environments for ‘biological women,’” said Chicago-based Sam M. Schwartz-Fenwick, a labor and employment partner at Seyfarth Shaw.

He also said the executive order’s text is “in direct conflict” with the normative understanding of the U.S. Supreme Court’s June 2020 ruling in Bostock v. Clayton County, which said Title VII protects employees against discrimination because of sexuality or gender identity.

“We can expect the EEOC and the federal courts to narrow the interpretation of Bostock as much as possible, but it is still good law and still protects you based on your transgender status,” Mr. Willingham said.

If the federal government follows through on the directives of the order, “we’re going to see a real shift in legislative priorities in the transgender space with the government. They will really focus on entities that are providing protection to transgender workers instead of companies who aren’t,” Mr. Schwartz-Fenwick said.

People who feel they’re being discriminated against in the workplace should still follow their company’s reporting policies, Ms. Abron said.

“Recognizing two genders on an official document doesn’t necessarily mean we’re doing away with discrimination protections, and there’s a lot of case law out there that still provides protection,” she said.

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Attack on DEI may prompt reverse discrimination claims

Experts predict a rise in lawsuits related to claims of reverse discrimination and disputes over the legality of companies’ diversity, equity and inclusion initiatives following executive orders that seek to end the programs.

The plaintiffs bar is always looking for vulnerabilities and could find motivation to bring more lawsuits as more questions arise over what constitutes acceptable and unacceptable DEI initiatives, said Chris DeGroff, a Chicago-based employment litigation partner at Seyfarth Shaw LLP.

“Uncertainty in the law breeds litigation, and this fog that everyone has been operating under over the last few days and not knowing which way is up will be capitalized on by the plaintiffs bar,” he said.

In recent years, there has been a rise in reverse discrimination lawsuits from individuals who say DEI initiatives negatively affected them.

Employers concerned about their risks should evaluate the adequacy of their employment practices liability insurance limits and/or consider purchasing excess limits, said Kelly Thoerig, Richmond, Virginia-based EPLI and wage and hour products coverage leader at Marsh LLC.

The EPLI market is relatively stable with abundant capacity and downward pricing trends, or only moderate premium increases when they occur, and a spike in claims could take up to 18 months to affect EPLI insurers, she said.

Companies considering changing their DEI initiatives “should have their lawyers on speed dial,” said Sam M. Schwartz-Fenwick, a Chicago-based labor and employment partner at Seyfarth Shaw LLP.

Businesses should analyze their employment practices regarding DEI and keep the recent headwinds in mind as the issues play out in courtrooms and legislatures, he said.