A federal judge in Texas struck down guidance from a government agency establishing protections against workplace harassment based on gender identity and sexual orientation.
Judge Matthew J. Kacsmaryk of the U.S. District Court for the Northern District of Texas on Thursday determined that the U.S. Equal Employment Opportunity Commission exceeded its statutory authority when the agency issued guidance to employers against deliberately using the wrong pronouns for an employee, refusing them access to bathrooms corresponding with their gender identity, and barring employees from wearing dress code-compliant clothing according to their gender identity because they may constitute forms of workplace harassment.
Title VII of the 1964 Civil Rights Act protects employees and job applicants from employment discrimination based on race, color, religion, sex and national origin.
The EEOC, which enforces workplace anti-discrimination laws, had updated its guidance on workplace harassment in April of last year under President Joe Biden for the first time in 25 years. It followed a 2020 Supreme Court ruling that gay, lesbian and transgender people are protected from employment discrimination.
Texas and the Heritage Foundation, the conservative think tank behind Project 2025, in August challenged the guidance, which the agency says serves as a tool for employers to assess compliance with anti-discrimination laws and is not legally binding. Kacsmaryk disagreed, writing that the guidance creates “mandatory standards ... from which legal consequences will necessarily flow if an employer fails to comply.”
The decision marks the latest blow to workplace protections for transgender workers following President Donald Trump's Jan. 20 executive order declaring that the government would recognize only two “immutable” sexes — male and female.
Kacsmaryk, a 2017 Trump nominee, invalidated all portions of the EEOC guidance that defines “sex” to include “sexual orientation” and “gender identity,” along with an entire section addressing the subject.
“Title VII does not require employers or courts to blind themselves to the biological differences between men and women,” he wrote in the opinion.
Heritage Foundation president Kevin Roberts commended the decision in an emailed statement: “The Biden EEOC tried to compel businesses — and the American people — to deny basic biological truth. Today, thanks to the great state of Texas and the work of my Heritage colleagues, a federal judge said: not so fast.”
He added: “This ruling is more than a legal victory. It’s a cultural one. It says no — you don’t have to surrender common sense at the altar of leftist ideology. You don’t have to pretend men are women."
Texas Attorney General Ken Paxton also touted the victory against “Biden’s 'Pronoun Police' Rule" in a Friday press release, saying: “The federal government has no right to force Texans to play along with delusions or ignore biological reality in our workplaces."
The National Women’s Law Center, which filed an amicus brief in November in support of the harassment guidance, blasted the decision in an emailed statement.
“The district court’s decision is an outrage and blatantly at odds with Supreme Court precedent,” said Liz Theran, senior director of litigation for education and workplace justice at NWLC. “The EEOC’s Harassment Guidance reminds employers and workers alike to do one simple thing that should cost no one anything: refrain from degrading others on the job based on their identity and who they love. This decision does not change the law, but it will make it harder for LGBTQIA+ workers to enforce their rights and experience a workplace free from harassment.”
Kacsmaryk offered a more narrow interpretation of Bostock v. Clayton County, the landmark Supreme Court case that established discrimination protections for LGBTQ+ workers, saying in his decision that the Supreme Court "firmly refused to expand the definition of ‘sex’ beyond the biological binary,” and found only that employers could not fire workers for being gay or transgender.
Employment attorney Jonathan Segal, a partner at Duane Morris who advises companies on how best to comply with anti-discrimination laws, emphasized that legal minds may disagree on the scope of Bostock, and Kacsmaryk's decision is just one interpretation.
“If you assume that a transgender employee has no rights beyond not being fired for transgender status, you are likely construing their rights too narrowly under both federal and state law,” which would put employers in a risky position, Segal said.
And regardless of whether explicit guidance is in place, employers still need to address gender identity conflicts in the workplace, according to Tiffany Stacy, an Ogletree Deakins attorney in San Antonio who defends employers against claims of workplace discrimination.
“From a management perspective, employers should be prepared to diffuse those situations,” Stacy said.
The EEOC in fiscal year 2024 received more than 3,000 charges alleging discrimination based on sexual orientation or gender identity, and 3,000-plus in 2023, according to the agency’s website.
The U.S. Department of Justice and the EEOC declined to comment on the outcome of the Texas case.
EEOC Acting Chair Andrea Lucas, a Trump appointee, voted against the harassment guidelines last year but has been unable to rescind or revise them after Trump fired two of the three Democratic commissioners, leaving the federal agency without the quorum needed to make major policy changes.
But earlier this month, Trump tapped an assistant U.S. attorney in Florida, Brittany Panuccio, to fill one of the vacancies. If Panuccio is confirmed by the Senate, the EEOC would regain a quorum and establish a Republican majority 2-1, clearing the path to fully pivot the agency toward focusing on Trump’s priorities.
“It is neither harassment nor discrimination for a business to draw distinctions between the sexes in providing single-sex bathrooms,” Lucas wrote in a statement expressing her dissent to that aspect of the guidelines.
In her four-month tenure as Acting Chair, Lucas has overhauled the agency's interpretation of civil rights law, including abandoning seven of its own cases representing transgender workers alleging they have experienced discrimination, and instructing employees to sideline all new gender identity discrimination cases received by the agency.
FILE - The emblem of the U.S. Equal Employment Opportunity Commission (EEOC) is shown on a podium in Vail, Colorado, Feb. 16, 2016, in Denver. (AP Photo/David Zalubowski, File)
WASHINGTON (AP) — Sluggish December hiring concluded a year of weak employment gains that have frustrated job seekers even though layoffs and unemployment have remained low.
Employers added just 50,000 jobs last month, nearly unchanged from a downwardly revised figure of 56,000 in November, the Labor Department said Friday. The unemployment rate slipped to 4.4%, its first decline since June, from 4.5% in November, a figure also revised lower.
The data suggests that businesses are reluctant to add workers even as economic growth has picked up. Many companies hired aggressively after the pandemic and no longer need to fill more jobs. Others have held back due to widespread uncertainty caused by President Donald Trump’s shifting tariff policies, elevated inflation, and the spread of artificial intelligence, which could alter or even replace some jobs.
Still, economists were encouraged by the drop in the unemployment rate, which had risen in the previous four straight reports. It had also alarmed officials at the Federal Reserve, prompting three cuts to the central bank's key interest rate last year. The decline lowered the odds of another rate reduction in January, economists said.
“The labor market looks to have stabilized, but at a slower pace of employment growth,” Blerina Uruci, chief economist at T. Rowe Price, said. There is no urgency for the Fed to cut rates further, for now."
Some Federal Reserve officials are concerned that inflation remains above their target of 2% annual growth, and hasn't improved since 2024. They support keeping rates where they are to combat inflation. Others, however, are more worried that hiring has nearly ground to a halt and have supported lowering borrowing costs to spur spending and growth.
November's job gain was revised slightly lower, from 64,000 to 56,000, while October's now shows a much steeper drop, with a loss of 173,000 positions, down from previous estimates of a 105,000 decline. The government revises the jobs figures as it receives more survey responses from businesses.
The economy has now lost an average of 22,000 jobs a month in the past three months, the government said. A year ago, in December 2024, it had gained 209,000 a month. Most of those losses reflect the purge of government workers by Elon Musk's Department of Government Efficiency.
Nearly all the jobs added in December were in the health care and restaurant and hotel industries. Health care added 38,500 jobs, while restaurants and hotels gained 47,000. Governments — mostly at the state and local level — added 13,000.
Manufacturing, construction and retail companies all shed jobs. Retailers cut 25,000 positions, a sign that holiday hiring has been weaker than previous years. Manufacturers have shed jobs every month since April, when Trump announced sweeping tariffs intended to boost manufacturing.
Wall Street and Washington are looking closely at Friday's report as it's the first clean reading on the labor market in three months. The government didn’t issue a report in October because of the six-week government shutdown, and November’s data was distorted by the closure, which lasted until Nov. 12.
The hiring slowdown reflects more than just a reluctance by companies to add jobs. With an aging population and a sharp drop in immigration, the economy doesn't need to create as many jobs as it has in the past to keep the unemployment rate steady. As a result, a gain of 50,000 jobs is not as clear a sign of weakness as it would have been in previous years.
And layoffs are still low, a sign firms aren't rapidly cutting jobs, as typically happens in a recession. The “low-hire, low-fire” job market does mean current workers have some job security, though those without jobs can have a tougher time.
Ernesto Castro, 44, has applied for hundreds of jobs since leaving his last in May. Yet the Los Angeles resident has gotten just three initial interviews, and only one follow-up, after which he heard nothing.
With nearly a decade of experience providing customer support for software companies, Castro expected to find a new job pretty quickly as he did in 2024.
“I should be in a good position,” Castro said. “It’s been awful.”
He worries that more companies are turning to artificial intelligence to help clients learn to use new software. He hears ads from tech companies that urge companies to slash workers that provide the kind of services he has in his previous jobs. His contacts in the industry say that employees are increasingly reluctant to switch jobs amid all the uncertainty, which leaves fewer open jobs for others.
He is now looking into starting his own software company, and is also exploring project management roles.
December’s report caps a year of sluggish hiring, particularly after April's “liberation day” tariff announcement by Trump. The economy generated an average of 111,000 jobs a month in the first three months of 2025. But that pace dropped to just 11,000 in the three months ended in August, before rebounding slightly to 22,000 in November.
Last year, the economy gained just 584,000 jobs, sharply lower than that more than 2 million added in 2024. It's the smallest annual gain since the COVID-19 pandemic decimated the job market in 2020.
Subdued hiring underscores a key conundrum surrounding the economy as it enters 2026: Growth has picked up to healthy levels, yet hiring has weakened noticeably and the unemployment rate has increased in the last four jobs reports.
Most economists expect hiring will accelerate this year as growth remains solid, and Trump's tax cut legislation is expected to produce large tax refunds this spring. Yet economists acknowledge there are other possibilities: Weak job gains could drag down future growth. Or the economy could keep expanding at a healthy clip, while automation and the spread of artificial intelligence reduces the need for more jobs.
Productivity, or output per hour worked, a measure of worker efficiency, has improved in the past three years and jumped nearly 5% in the July-September quarter. That means companies can produce more without adding jobs. Over time, it should also boost worker pay.
Even with such sluggish job gains, the economy has continued to expand, with growth reaching a 4.3% annual rate in last year's July-September quarter, the best in two years. Strong consumer spending helped drive the gain. The Federal Reserve Bank of Atlanta forecasts that growth could slow to a still-solid 2.7% in the final three months of last year.
FILE - A hiring sign is displayed at a grocery store in Northbrook, Ill., Tuesday, Jan. 21, 2025. (AP Photo/Nam Y. Huh)
