Minnesota Federal Court Declines to Dismiss State Law Transgender Discrimination Claim

We’ve previously posted on the growing social and legal movement for transgender equity. In recent developments, a Minnesota-based federal court ruled that Lisa Scott, a transgender woman, could proceed to trial on a claim that her rejection as a plasma donor was unlawful transgender discrimination under the Minnesota Human Rights Act (“MHRA”). The MHRA prohibits employment discrimination based on gender identity, but also contains provisions that prohibit business discrimination based on gender identity. Scott’s lawsuit is based on the business discrimination provisions of the MHRA.

In her lawsuit, Scott alleges that she visited CSL Plasma, Inc. in November 2008 to donate plasma. CSL is a for-profit business that pays plasma donors for their donations and re-sells donor plasma for manufacture into pharmaceuticals. Scott alleges that, during her donor screening, a CSL nurse informed Scott that she was “permanently ineligible to donate” because she was taking hormone replacements and had undergone a sex change operation. Scott also alleges the nurse made statements that assumed that Scott had engaged in high risk activities when she contends she had not.

Scott filed a discrimination charge against CSL with the Minnesota Department of Human Rights (“MDHR”) and later commenced her lawsuit. Under the business discrimination provisions of the MHRA, it is “an unfair discriminatory practice for a person engaged in a trade or business or in the provision of a service” to “intentionally refuse to do business with . . . because of a person’s . . . sexual orientation . . . unless the alleged refusal or discrimination is because of legitimate government reasons.” In addition, the MHRA definition of “sexual orientation” extends beyond sexual orientation to encompass gender identity.

CSL sought to dismiss Scott’s complaint, arguing her claim was untimely, that donating plasma is not a “business,” and that Scott’s claim fails given the lack of any legal right to donate blood or plasma. Minnesota federal district court Judge Joan Ericksen rejected CSL’s arguments. While Scott did not commence her lawsuit for a number of years after the MDHR issued a probable cause finding on her administrative charge, Judge Erickson ruled that the MHRA does not contain a strict deadline for commencing legal action after a probable cause finding. In addition, Judge Ericksen held that CSL is in the plasma “business” given that it pays donors and resells their plasma. The Judge also held that the MHRA does not require the existence of an enforceable contract for a business discrimination claim, because this claim encompasses a refusal to do business with someone based on gender identity. While noting that CSL had presented evidence of a potential business defense to Scott’s claim, the Court held that fact issues necessitated a trial.

The Scott case is a reminder that, while transgender rights are still evolving at the federal level, employment and business discrimination based on gender identity has been unlawful for some time under Minnesota law. While certain religious entities are exempt from the state law, other businesses must comply and would be well-served to revisit their employment and business policies, practices, and their personnel training to ensure compliance.