Last week, the Equal Employment Opportunity Commission filed two potentially landmark lawsuits against employers accused of terminating employees undergoing gender reassignment procedures. The EEOC alleges that the terminations constitute gender discrimination under Title VII, because they reflect the employers’ use of gender stereotypes.

One suit was filed against a Detroit funeral home, while the other was brought against a Florida eye care clinic. In both cases, the EEOC claims that the employers terminated male employees who informed their employers that they were beginning the process of transitioning to female, and that they would begin dressing as such in the workplace.

Title VII does not specifically prohibit employment discrimination against transgendered persons. Over recent years, the EEOC and several federal courts have developed a theory that the existing sex discrimination prohibition in Title VII also applies to employers’ holding employees to stereotypes over how persons of a particular gender should dress and act. Employees who do not conform to these gender stereotypes are therefore discriminated against on the basis of sex.

This theory has not been explicitly recognized by federal courts in the context of transgendered employees in the private sector. If validated, this will impose restrictions on employers unwilling to accommodate an employee’s decision to change gender identification. A bill to add sexual orientation and gender identity to Title VII is stalled in Congress. The EEOC has indicated its intent to maximize current employment discrimination prohibitions to cover LGBT employees where possible.