A lawsuit filed over the weekend presents constitutional and other challenges to North Carolina's new law, HB 2, which prohibits municipalities from including sexual orientation and gender identity in local ordinances banning discrimination and restricting access by transgender individuals to single-sex facilities. Though constitutional arguments are at the heart of the case, the lawsuit also includes a Title IX challenge to the provision of HB 2 that restricts transgender individuals to using the bathroom or locker room that matches the sex designation on their birth certificate, even if this conflicts with their gender identity and expression. Specifically, the lawsuit names the University of North Carolina system as defendant, and includes as a plaintiffs a transgender man who is a student at UNC-Greensboro and another who is an employee at UNC-Chapel Hill. These plaintiffs argue that the under HB 2, they are prohibited from access to men's restrooms and locker rooms, and UNC violates Title IX as a result.
This argument could provide a federal court with the opportunity to consider the Department of Education's interpretation of Title IX as it pertains to transgender rights in single-sex facilities, and decide how much weight to give the agency's position that excluding a transgender person from gender-consonant usage is a form of sex discrimination that is prohibited under Title IX. The agency has expressed this position most recently in the settlement of discrimination case against the school district in Palatine, Illinois last fall. If the court agreed with the agency's interpretation, it could limit HB 2's application to public educational institution due to the conflict with federal law.
It is also possible that the court could agree with the Department of Education's interpretation but still see no conflict between the laws. While HB 2 is mandatory, Title IX is not. It only applies to schools that choose to accept federal funding. The case could be resolved in such a way that HB 2 compliance renders North Carolina schools ineligible for federal funding, a ruling that would not affect the legal status of HB 2 directly -- but would certainly generate political pressure for its repeal.