Was the Dang Dang Case a Successful Transgender Discrimination Lawsuit?

In January, a Beijing intermediate court handed down a powerfully-worded decision affirming a trial court’s ruling that e-commerce giant Dang Dang had illegally fired a transwoman employee, “Gao X.”

The judgement was the clearest legal victory to-date for a transgender employee who had been discriminated against and impressively embraced strong language about diversity and rights. Several news outlets covered the case, with one Weibo hashtag reaching 380 million views.

Observers (including myself) have referred to the lawsuit as a successful “transgender discrimination case,” but while the case is a major advocacy victory against discrimination, this phrasing doesn’t accurately describe the legal holding.

The courts found that Gao was illegally terminated, but not necessarily discriminated against

Gao’s suit against Dang Dang was for illegal termination (a kind of labor dispute) rather than discrimination (a kind of tort). This means that the question before the court was whether Dang Dang had a legitimate reason for ending Gao’s contract. Because it was a labor dispute, the employer (Dang Dang) bore the burden of proof. Had it been a discrimination suit, Gao would have needed to prove that she was discriminated against.

Damages in these two types of cases are also different. In an illegal termination suit, the court can award employees reinstatement and lost wages, or, if the employee does not want reinstatement or reinstatement is not possible, the court can award double severance pay. In a discrimination suit, plaintiffs can only recover for suffered harms. This includes emotional distress and unpaid wages, but not expected wages that would have been be owed had the contract continued.

Labor disputes are in many ways more advantageous for employees, but discrimination suits have upsides for advocacy. Discrimination suits compel courts to rule on whether the employer’s actions constituted discrimination, and a winning plaintiff can demand that the defendant make a public apology.

In Gao’s case, Dang Dang argued that it fired her for excessive unexcused absences, a proper basis for Gao’s dismissal if proven, and Gao had indeed missed work while recovering from her sex reassignment surgery. Gao countered that she had repeatedly sought permission to take leave but management kept denying her requests in an uncharacteristically draconian way. Dang Dang responded that Gao’s applications were incomplete or made through unofficial channels.

The trial court ruled that Dang Dang had wrongfully denied Gao’s sick leave. It held that Dang Dang should have followed up with Gao to understand her situation better, recognizing Gao’s interest in keeping certain sensitive information private when applying for leave. The court found that “excessively mechanical” denial of medical leave that “does not consider the particularity of a laborer’s illness” is detrimental to workers’ rights, a view upheld by the intermediate court.

The intermediate court also had a new question before it: whether Dang Dang had legitimately rejected renewing Gao’s contract during the lawsuit. Dang Dang argued it did so because its employees did not feel comfortable working with Gao after her gender transition and did not want to share a restroom with her. The court rejected this basis for refusal, saying that Gao’s colleagues should “accept her new sex,” which had been duly recognized by the Ministry of Public Security when it changed the sex designation on her identification card.

In the time between the trial court’s decision and the appeal, Dang Dang sent Gao a brazenly offensive letter that addressed Gao as “Mr.” and asked that she consider bringing her own security guard to work in case, as a “mentally ill person” (a reference to her “transsexualism” diagnosis), she had an “episode” and violently attacked her colleagues. In the letter, Dang Dang also threatened to use political connections to influence the intermediate court’s decision (the intermediate court judge, likely incensed by this threat, included the full text of Dang Dang’s letter in the judgment).

The courts’ analysis narrowly focused on Gao’s diagnosed “transsexualism” and state recognition of her sex

The trial court ruled that because Gao had been diagnosed with “transsexualism” (“易性症”), an officially-recognized mental disorder in China, she had the right to use her sick leave to undergo sex reassignment surgery as recommended by her doctors. The intermediate court emphasized the legal recognition of her changed sex in dismissing her coworkers’ discomfort.

The courts did not say that all people should be treated equally regardless of their gender identity. Rather, the courts’ analysis focused on how Gao satisfied the regulatory criteria for transitioning from one legally recognized gender to another. It should be noted that a key criterion is undergoing sex reassignment surgery, but many transgender people do not want to undergo surgery, cannot afford it, or do not meet the stringent legal requirements for accessing it. However, as with the discrimination question, the court did not address this issue because it was unnecessary for reaching a conclusion in Gao’s case.

So, was the Dang Dang case a Successful Transgender Discrimination Lawsuit?

It was not technically a discrimination suit, but it was a clear success for anti-discrimination advocacy.

Dang Dang’s ‘employee discomfort’ argument for why it did not renew the contract, detailed in its unhinged letter to Gao, put transphobia in the path of the intermediate court’s analysis —and the court strongly rejected it. It was not the same as holding that Dang Dang had discriminated against Gao, but came close.

After the court concluded the legal analysis in its judgment, it went out of its way to strongly imply that Dang Dang had illegally discriminated against Gao:

“although [the Employment Promotion Law] does not expressly provide that laborers shall not be discriminated against because they have undergone a sex change, it should be within the meaning of the [the Employment Promotion Law] that laborers, who have undergone sex-reassignment surgery, changed their sex, and gotten the approval of the Ministry of Public Security, enjoy rights to equal employment and not to be discriminated against. In this case, the letter Dang Dang sent Gao on July 22, 2019, that brought up issues such as ‘episodes of a mentally ill person, other employee’s fears, discomfort, and moral awkwardness, the restroom problem,’ etc., led Gao X to argue that Dang Dang had discriminated against her. On this issue, the court calls upon Dang Dang and its employees . . . [to] have a more open and tolerant attitude toward Gao . . .”

The court also hinted that it embraces a broader concept of gender identity:

“The trend of modern society is towards increasingly rich diversity. . . . We are accustomed to understanding society through our conception of biological sex, but there are some people who express their gender identity in accordance with their own life experience. This kind of social expression — the existence of which is sustained — often requires us to renew our understanding and how we look at things.”

It is because of these and similar passages — and not the detailed legal analysis — that the case went viral, sending out a clear message to the public about affirming diversity.

When can we expect a true ‘discrimination case’ victory?

Looking ahead, plaintiffs face an uphill battle in bringing discrimination claims because they carry the burden of proof and clear-cut evidence is hard to come by — after all, discrimination happens in employers’ minds. Imagine if Gao had brought a discrimination claim and Dang Dang was smart enough not to mail smoking-gun evidence to her?

If discrimination suits are to have a shot at success, courts will need to be able to infer discrimination based on indirect evidence (as do courts in many jurisdictions around the world). If a plaintiff shows prima facie evidence of discrimination and the employer is unable to provide a proper reason for its actions that stands up to scrutiny, the court should rule that discrimination occurred. Until then, it will be difficult for court rulings to call discrimination out by its name.