District Dilemma: Comply with Department of Education’s Directives (and risk lawsuits) or Binding Court Decisions (and risk losing Federal funding)

Christopher L. Voltz, Esq., cvoltz@tuckerlaw.com, (412) 594-5580

Fairfax Cty. Sch. Bd. v. McMahon, Civil Action No. 1:25-cv-1432, 2025 U.S. Dist. LEXIS 179299, at *5 (E.D. Va. Sep. 5, 2025).  District Court for the Eastern District of Virginia declines to rule on the merits of a school district’s challenge to the United States Department of Education’s decision to freeze and condition federal funding on the district adopting policies that restrict bathrooms and locker rooms to students based on their biological sex and not in accordance with their gender identity.

BACKGROUND

The Fairfax County School District adopted a gender-inclusive restroom and bathroom policy that contains the following provisions:

• “Gender-expansive and transgender students shall be provided with the option of using a locker room or restroom consistent with the student’s gender identity.”
• “In no case shall a gender-expansive or transgender student be required to use a locker room or restroom that conflicts with the student’s gender identity or be limited to using only a private area, single-occupancy accommodation, or other single-use facility as described in this section.”

On July 25, 2025, the Office for Civil Rights (“OCR”) of the Department of Education informed the district that its policy violated Title IX and is implementing regulations by treating cisgender students worse than transgender students. In addition, the OCR provided the district with a proposed Resolution Agreement which required the district to: (1) modify its policy to ensure that access to restroom and locker room facilities will be limited by students’ sex assigned at birth; and (2) ensure that all policies adopt OCR’s definition of the terms “sex, female, male, girls, women, boys, [and] men.” The district refused to sign the agreement because, in the district’s opinion, the terms of the agreement violate state and federal law.

On August 19, 2025, the Department designated the district as a ‘high-risk’ entity due to the district’s purported “noncompliance with Title IX.” As part of this designation, the Department placed all of the district’s grants on reimbursement payment status (i.e., the district, instead of receiving funds, would have to make payments and then seek reimbursement from the Department) and, as a condition of reimbursement, the district had to complete a corrective action plan confirming that it would comply with, among other things, the Department’s interpretation of Title IX.  

On August 29, 2025, the district filed suit seeking, among other things, that the “high risk” designation be vacated, a declaration that the Department’s freezing and conditioning federal funds was illegal and a declaration that the district’s policy does not violate Title IX. Without reaching the merits of the decision, however, the District Court dismissed the case because it concluded that it lacked jurisdiction and directed the district to file its claims in a different court.

DISCUSSION

While the District Court declined to decide the merits of the lawsuit, the underlying issues are important because Pennsylvania school districts may be faced with the same difficult choices.

As noted above, the district in Fairfax County refused to modify its policies or agree to the terms of the Resolution Agreement because doing so would expose it to a risk of litigation for violating federal and state law. Specifically, in Grimm v. Gloucester County School Board, 972 F.3d 586 (4th Cir. 2020), the United States Court of Appeals for the Fourth Circuit, which covers Virginia, considered the right of transgender students to access school facilities that correspond with their gender identity. In that case, a school district implemented a policy under which students could only use restrooms matching their “biological gender.” The policy also required that “students with gender identity issues shall be provided an alternative appropriate private facility.”

The Fourth Circuit concluded that this restrictive policy discriminated against a transgender student “on the basis of sex” under Title IX, reasoning that “[the student] was treated worse than students with whom he was similarly situated because he alone could not use the restroom corresponding with his gender.” Accordingly, the court found the student’s gender identity to be a protected status pursuant to Title IX and invalidated that district’s restroom restriction. Moreover, on August 15, 2025, the Fourth Circuit reaffirmed that “Grimm remains the law of this Circuit and is thus binding on all the district courts within it.” Doe v. South Carolina, No. 25-1787, 2025 WL 2375386, at *8 (4th Cir. Aug. 15, 2025). Accordingly, based on this binding precedent, the district believed that its policy complied with the applicable law.

Nevertheless, the Department took the position that the term “sex” means biological sex and has never meant “gender identity”. In making this determination, the Department relied on two Executive Orders issued by President Trump, which define sex as “an individual’s immutable biological classification as either male or female. See Executive Order 14168, Defending Women from Gender Ideology Extremism and Restoring Biological Truth to the Federal Government, (Jan. 30, 2025); Executive Order 14201, Keeping Men Out of Women’s Sports, (Feb. 11, 2025). It also relied on court decisions in other jurisdictions that held that the term “sex” in Title IX refers to biological sex and not gender identity.

Accordingly, the Department concluded that because Title IX’s prohibition against sex discrimination does not include discrimination based on “gender identity,” the district’s policy violated Title IX and its implementing regulations.

As noted above, the District Court declined to hear the case on the merits, so the Department’s decision to freeze and condition federal funding remains in place.

PRACTICAL ADVICE

Pennsylvania school districts could find themselves facing a decision similar to that faced by the district in the Fairfax County case.  As noted above, the Department of Education has made its position very clear:  the term “sex,” as used in Title IX, is limited to biological sex, and sex discrimination does not include gender-identity discrimination. It has also shown a willingness to investigate and penalize school districts that fail to adopt this position.

On the other hand, the Court of Appeals for the Third Circuit, which covers Pennsylvania school districts, has, like the Fourth Circuit, rejected claims that a gender-inclusive bathroom and locker room policy like the one in Fairfax County violated Title IX. Moreover, in its opinion, the court noted that “barring transgender students from restrooms that align with their gender identity would itself pose a potential Title IX violation.” Doe v. Boyertown Area Sch. Dist., 897 F.3d 518 (3d Cir. 2018). 

Accordingly, given the conflicting obligations imposed on school districts by the Department of Education and the courts, school districts should work closely with their solicitors when deciding whether to adopt, rescind, modify, or keep their bathroom and restroom policies.

If your district is navigating questions about Title IX compliance, federal funding risk, or restroom and locker-room policies, contact Christopher Voltz at (412) 594-5580 or at cvoltz@tuckerlaw.com.