The accounting associate lived two lives: Chris at home and Liz in the office.

When the Colombian immigrant landed his first job out of college at PricewaterhouseCoopers LLP in New York, he had already told those closest to him that he identified as a man, even though he was biologically born a woman.

But uncertainty kept him living dual lives for nearly two years: What would his co-workers think? Would his bosses or clients treat him differently? How would it affect his work?

“At work I was hiding,” Chris Palma said. “I did not get to be my true self.”

Such anxieties persist as companies craft policies to limit workplace discrimination and ease the transition process for transgender employees, even as the legal landscape remains uncertain. Courts are divided and federal agencies are at odds over whether federal civil rights laws protect gender identity and sexual orientation, putting employees like Palma—and companies like PwC—in uncharted waters.

“In an increasingly gender-fluid workplace, society is ahead of the government in certain ways,” said Sam Schwartz-Fenwick, a Seyfarth Shaw partner in Chicago, who leads the firm's LGBT affinity group. “This is the reality of the workforce now and employers have to have policies, even if the government hasn't caught up or thought about it.”

'This Is an Emerging Area'

Palma, 29, decided in the fall of 2016 he would no longer spend part of his life hiding his identity. He became the first worker at PwC to openly transition at the company.

“I wanted to educate people and normalize transgender workers, but there is still a lot of learning to do,” Palma told The National Law Journal. “I thought making my life public will help with that process.”

Palma's decision to transition aligned with an internal assessment at the global accounting and auditing firm—one of hundreds of companies that have adopted policies that include transgender discrimination protections, health care options and guidelines for transitioning workers. According to the Human Rights Campaign, 83 percent of companies among the Fortune 500 had such policies as of 2016, up from 3 percent in 2002.

PwC itself is evidence of a shift in the minds of employers. In the 1980s, the company fought and lost a Supreme Court battle that ultimately expanded protections for gender discrimination.

More visibility and education pushed companies to adopt more progressive policies in recent years. For decades, state lawmakers around the country have passed anti-discrimination laws for LGBT workers.

The new guidelines—titled “Workplace Gender Inclusivity and Transition”—detail workplace procedures, frequently asked questions, a list of terms and information on outside resources and organizations. The guidelines were officially completed in November 2016, a few months after Palma told the company about his decision to come out.

“These situations are fraught with pitfalls if you haven't worked these things out ahead of time,” said Amy Bess, chair of Vedder Price's labor and employment practice. “It's important to get out in front of it and be proactive. Many companies deal with this only as it pops up.”

Jennifer Allyn, diversity strategy leader at PwC, said the accounting firm launched an LGBT Partner Advisory Board in 2013 because the company wanted to ensure that no one would feel “their career is at risk coming out as gay.”

The group enlisted the help of therapist Jean Malpas of the Ackerman Institute in New York, who specializes in those who are gender nonconforming and their families, to help craft new guidelines specifically regarding gender identity.

“It was not something we had dealt with before. Gender transition is a public event and had to be managed,” Allyn said, distinguishing the situation of a gay employee. “This is an emerging area. The language is changing. People's consciousness is changing. All of us are understanding and talking more.”

Allyn said PwC provides same-sex health care benefits and has a nondiscrimination policy that includes transgender and gay workers, but, she added, the law is still unsettled: “You can be fired for being trans. It's not a protected class.”

Advice for Employers: 'Err on the Side of Caution'

This interpretation of federal civil rights law is evolving, with a growing momentum to include protections for LGBT workers under sex discrimination as part of Title VII of the Civil Rights Act.

Sex discrimination under the statute has changed over the years. PwC was the defendant in a 1989 Supreme Court case that expanded the definition of sex discrimination protections. The justices in the case Price Waterhouse v. Hopkins found employment discrimination based on gender stereotyping was unlawful under Title VII. PwC had allegedly denied a former employee a partnership because she did not fit into an idea of what a female employee should look and act like.

Five federal appeals courts since then have determined that gender identity should also be protected under sex discrimination. On the question of sexual orientation protection, the courts are divided. The U.S. Supreme Court in December declined to take up another case raising the question after the U.S. Court of Appeals for the Eleventh Circuit found gay workers did not have protections.

The Second Circuit on Feb. 27 overturned its earlier precedent and ruled that LGBT workers should be protected under federal civil rights laws. This followed a landmark ruling last year from the Seventh Circuit, which was the first circuit court to take up that interpretation. Another case is on appeal in the Eighth Circuit.

The U.S. Equal Employment Opportunity Commission and U.S. Justice Department under Attorney General Jeff Sessions have differing opinions on both questions of gender identity and sexual orientation. In the Second Circuit case, the Justice Department lined up against the EEOC, arguing Congress should be the entity to add sexual orientation protections.

US Justice Department headquarters in Washington DC. Credit: ALM

James Esseks, director of the ACLU Lesbian Gay Bisexual Transgender & HIV Project, assailed the Justice Department's push to restrict workplace rights.

“Courts are coming to agreement and increasingly coming to a place where they recognize that transgender people are protected,” Esseks said. “A broad swath of the country has civil rights protections for transgender people.”

Coalitions of business groups, including major tech companies, have weighed in on some of the high-profile court cases surrounding the question of sexual orientation in the workplace. In friend-of-the-court briefs, the companies argued LGBT-inclusive workplace policies made good business sense.

In 2010, only 9 percent of companies surveyed in an annual Human Rights Campaign equality report had “trans-inclusive” benefits—in 2016, 79 percent of companies offered those benefits. In 2008, 90 companies created transition guidelines, which jumped in last year's report to 459 companies.

“This is significant because first and foremost, we don't have uniform federal civil rights protection for gender identity and expression,” said Beck Bailey, deputy director of employee engagement for the Human Rights Campaign's workplace equality program. “Companies taking it upon themselves to enact those policies is the first step to protecting transgender workers for a welcoming, diverse workplace.”

Employers are typically progressive in going “above and beyond” what is required of them, said Myrna Maysonet, an Orlando partner in Greenspoon Marder's labor and employment practice who regularly represents employers on LGBT issues.

“I think you see an uptick because there is more visibility for the transgender community,” Maysonet said. “Still, there has been a lot of confusion.”

Despite uncertainty in the law, Maysonet said she advises clients to enact anti-discrimination policies that cover all workers, at a minimum to retain good people but also to avoid liability. She noted that even after Sessions's guidance was issued, a transgender professor in November won a $1.1 million jury verdict in Oklahoma after her university argued she should not be protected under the law.

“You put yourself at risk of being on the losing side,” Maysonet said. “Unless you have the Supreme Court saying, 'No they are not protected,' I think employers should err on the side of caution, not only because it's the right thing to do to treat people with respect and fairness.”

She added, “There is no federal law saying gender identity is protected, but there have been enough cases litigated to ignore that trend.”

'I Wanted to Be Recognized as I Am'

During the transition process, Palma's main concern focused on making sure his co-workers used the correct pronouns—seeing him as Chris, not Liz. Other administrative issues would have to be resolved as well, such as his name in the company system and email address.

Palma's first step was to meet with a PwC diversity officer in New York, and later a partner, who expressed support. Even though the ink was not quite dry on PwC's new transition guidelines, the company said it followed the steps it outlined.

The company held a meeting with Palma's team, initially without him present, to update his co-workers on his transition plans, and to provide an overview on the correct terminology and anti-harassment workplace.

“I wanted to be recognized as I am and what I consider to be the right name,” Palma said. “It turned into an even more educational process that I wasn't even thinking about.”

PwC's guidelines include details about social and medical transitions, and they include a policy that says everyone may use the restroom corresponding with their gender identity, regardless of a legal gender change. The guidelines also detail the transition process in the workplace, which includes steps for the training and education procedures. The policy includes details on dress codes.

“We did a lot of things we weren't required to do for talent reasons. One of the challenges is that people want an inclusive environment, not only trans people,” Allyn said. “It's important for organizations to review policies in light of the changing landscape.”