Facial Bans on Transgender Women Are Direct Evidence of MHRA Discrimination; “Legitimate Business Purpose” Requires BFOQ‑like Necessity and Does Not Apply to Public Accommodations

Introduction

In JayCee Cooper v. USA Powerlifting and USA Powerlifting Minnesota, the Minnesota Supreme Court addressed whether a policy categorically excluding transgender women from the women’s division of a powerlifting competition violates the Minnesota Human Rights Act (MHRA). The case sits at the intersection of anti-discrimination law and competitive athletics, and it arrives against the backdrop of the MHRA’s historical protection of transgender people under the statute’s former definition of “sexual orientation,” as well as its 2023 amendment adding “gender identity” as a distinct protected status.

The dispute arose when USA Powerlifting (USAPL) told Cooper—a transgender woman who had registered to compete in women’s events and applied for a therapeutic use exemption (TUE) for prescribed spironolactone—that it “do[es] not allow male to female transgender athletes at all,” and revoked her competition card. Cooper sued under the MHRA for discrimination in business and in public accommodations based on sexual orientation (and sex).

Key issues before the Court included:

Whether USAPL’s categorical exclusion of transgender women is facially discriminatory and constitutes direct evidence of discrimination under the MHRA.
Whether USAPL can invoke the “legitimate business purpose” defense to liability for discrimination in business (Minn. Stat. § 363A.17(3)).
Whether any statutory defense or exemption applies to discrimination in public accommodations (Minn. Stat. § 363A.11).
Whether the Court’s prior decision in Goins v. West Group (2001) limits or forecloses Cooper’s claims.

Summary of the Opinion

The Minnesota Supreme Court affirmed in part, reversed in part, and remanded:

Direct evidence and facial discrimination: USAPL’s categorical policy excluding transgender women from the women’s division is facially discriminatory and constitutes direct evidence of discrimination based on sexual orientation under the 2018 MHRA (which included transgender status within “sexual orientation”). The McDonnell Douglas burden-shifting framework is therefore inapplicable.
Business discrimination and “legitimate business purpose”: For business discrimination under § 363A.17(3), the Court recognized a statutory defense where the refusal or discrimination is “because of a legitimate business purpose.” Drawing on Title VII’s BFOQ jurisprudence for guidance, the Court held that a legitimate business purpose requires that the discriminatory policy be reasonably necessary to the central mission of the business, not based on stereotypes, and that no reasonable alternatives exist. Because USAPL submitted expert evidence and fairness rationales related to strength sports, a genuine dispute of material fact exists; thus, partial summary judgment for Cooper on business claims was improper.
Public accommodations: No analogous “legitimate business purpose” defense exists under § 363A.11. USAPL did not argue any statutory defense or exemption applicable to sexual orientation claims in public accommodations. Accordingly, the district court correctly granted partial summary judgment for Cooper as to liability on that claim.
Goins v. West Group (2001): The Court declined to overrule Goins but expressly limited it to employment-related claims under the MHRA; it does not control public accommodations or business discrimination claims such as Cooper’s.

Detailed Analysis

1) Precedents Cited and Their Influence

LaPoint v. Family Orthodontics, P.A., 892 N.W.2d 506 (Minn. 2017): Clarifies that a protected status must “actually motivate” the decision, and that animus is not required. The Court used LaPoint to frame “actual motivation” and to emphasize that discriminatory intent can exist without hostility.
Hoover v. Norwest Private Mortgage Banking, 632 N.W.2d 534 (Minn. 2001); Hanson v. Dept. of Natural Resources, 972 N.W.2d 362 (Minn. 2022): Recognize two paths to proving discriminatory intent—direct evidence or McDonnell Douglas circumstantial evidence. The Court held that USAPL’s policy is direct evidence; thus, McDonnell Douglas does not apply.
Trans World Airlines, Inc. v. Thurston, 469 U.S. 111 (1985): A policy discriminatory on its face is direct evidence, eliminating the need for McDonnell Douglas. Cited to support skipping burden-shifting when direct evidence exists.
Febres v. Challenger Caribbean Corp., 214 F.3d 57 (1st Cir. 2000); Hardin v. Stynchcomb, 691 F.2d 1364 (11th Cir. 1982): Reinforce that admissions or categorical statements that consider protected criteria are direct evidence.
Minnesota Mining & Mfg. Co. v. State, 289 N.W.2d 396 (Minn. 1979); Kraft, Inc. v. State, 284 N.W.2d 386 (Minn. 1979): Policies that facially discriminate (pregnancy; marital status) violate the MHRA even if driven by cost or benevolent motives. Supports the point that motivation (e.g., cost, paternalism) does not cleanse explicit discrimination.
International Union v. Johnson Controls, Inc., 499 U.S. 187 (1991): A seminal Title VII case requiring that any sex-based qualification relate to the essence of the business and not rely on stereotypes; customer/preference-based justifications are insufficient. The Court uses Johnson Controls, Diaz, Dothard, and Everson to shape Minnesota’s “legitimate business purpose” defense to mirror BFOQ-like necessity.
Diaz v. Pan American World Airways, Inc., 442 F.2d 385 (5th Cir. 1971): Customer preferences do not justify discrimination; the essence-of-business test emerges here.
Dothard v. Rawlinson, 433 U.S. 321 (1977): Demonstrates a narrow, fact-intensive BFOQ application (male-only prison-guard policy justified by security needs). Shows how necessity is proven.
Everson v. Michigan Dept. of Corrections, 391 F.3d 737 (6th Cir. 2004): Emphasizes that BFOQ requires a factual basis that discrimination is reasonably necessary to normal operation and that stereotypes are impermissible.
Texas Dept. of Community Affairs v. Burdine, 450 U.S. 248 (1981); Ramirez v. Sloss, 615 F.2d 163 (5th Cir. 1980): Distinguish the lower “legitimate, nondiscriminatory reason” needed at step two of McDonnell Douglas from the robust, necessity-based showing required for a statutory justification. The Court underscores that § 363A.17(3) functions only after discriminatory motive is established.
Goins v. West Group, 635 N.W.2d 717 (Minn. 2001): Limited to employment settings. It neither controls nor undermines Cooper’s public accommodations/business claims; the Court declines to overrule but fences it off from the instant context.

2) Legal Reasoning

Transgender status was protected under the 2018 MHRA’s “sexual orientation” definition.
At the time of Cooper’s claims, the MHRA defined “sexual orientation” to include “having or being perceived as having a self-image or identity not traditionally associated with one’s biological maleness or femaleness” (Minn. Stat. § 363A.03, subd. 44 (2018)). Both parties agreed that transgender status fell within that definition, and Cooper undisputedly belonged to the protected class.
USAPL’s policy is facially discriminatory—direct evidence of discrimination.
The record contained unambiguous statements: “We do not allow male to female transgender athletes at all. Full stop.” The Court held that such categorical exclusion is facial discrimination and constitutes direct evidence that Cooper’s transgender status was a substantial, motivating factor in the denial. Therefore, the McDonnell Douglas framework does not apply.

Importantly, the Court repeated that discriminatory intent does not require hostility or animus; a decision “because of” a protected characteristic is unlawful even if justified in neutral or benevolent terms (e.g., cost, safety paternalism).
The “legitimate business purpose” defense under § 363A.17(3) is BFOQ-like in rigor and distinct from McDonnell Douglas step two.
The Court separated the statutory defense from the “legitimate, nondiscriminatory reason” in McDonnell Douglas. The former applies only after discriminatory motive is established and requires:
- The discriminatory policy must be reasonably necessary to the enterprise’s central mission.
- No reasonable, less discriminatory alternatives exist.
- The policy cannot rest on stereotypes; customer preferences/prejudices are not valid justifications.
Drawing on Johnson Controls, Diaz, Dothard, and Everson, the Court imported these principles as interpretive aids to give content to “legitimate business purpose.”

On this record, USAPL offered expert reports and scientific literature about strength differences and argued that competitive fairness in a strength sport is central to its mission. Because the Court must view evidence in the light most favorable to the nonmovant at summary judgment, it found a genuine factual dispute about whether USAPL’s categorical policy meets the defense. Thus, partial summary judgment for Cooper on business discrimination was improper.
No analogous statutory defense exists for public accommodations claims based on sexual orientation.
The “legitimate business purpose” defense appears only in § 363A.17 (business). It does not apply to § 363A.11 (public accommodations). The athletic team/program/event exemption in § 363A.24, subd. 2, by its terms addresses sex discrimination—not sexual orientation—and USAPL did not argue it extends to sexual orientation. Without any asserted statutory defense, the district court correctly granted partial summary judgment for Cooper on public accommodations liability.
Goins is limited to employment.
The Court declined to overrule Goins but emphasized that it governs employment claims and does not control MHRA claims for public accommodations or business discrimination in this case.

3) Impact and Practical Implications

A. For sports governing bodies and event organizers in Minnesota

Facial bans are direct evidence: Any categorical exclusion of transgender participants from sex-designated categories is direct evidence of discrimination under the MHRA (at least for claims arising under the 2018 statute’s “sexual orientation”). Organizations should expect no shelter in McDonnell Douglas burden-shifting.
Public accommodations exposure: Places of public accommodation (a broad category that includes most competitions open to the public) face liability without access to a “legitimate business purpose” defense for sexual-orientation-based claims. Absent a specific statutory exemption, liability will be difficult to avoid once facial discrimination is shown.
Business discrimination and necessity standard: For business-related claims (e.g., contracting terms, membership, fees), a defendant can attempt a § 363A.17(3) defense, but the standard is exacting:
- Show that the policy is reasonably necessary to the core mission (e.g., fair competition in a strength sport).
- Demonstrate that no reasonable, less discriminatory alternatives exist.
- Establish that the policy is not based on stereotypes.
Evidence will likely need to include rigorous expert analysis and, critically, engagement with alternatives (e.g., individualized eligibility criteria). A blanket ban is inherently difficult to justify.
Customer preferences are irrelevant: Concerns about member or spectator preferences cannot justify discrimination.

B. For Minnesota litigation and compliance strategy

Policy design: Categorical exclusions are high-risk. Organizations should consider narrowly tailored, evidence-based eligibility criteria and document why alternatives do or do not achieve the mission without discrimination.
Proof posture: Plaintiffs can succeed at summary judgment on liability in public accommodations claims where defendants fail to identify a statutory defense or exemption. Business claims may proceed to trial if defendants marshal sufficient evidence for a “legitimate business purpose.”
Goins limited: Employers should note Goins remains good law in employment contexts, but it does not insulate similar policies outside employment.

C. Looking ahead under the 2023 amendments

The MHRA now separately protects “gender identity” (Minn. Stat. § 363A.03, subd. 50 (2024)). While this case applied the 2018 statute, the Court’s analysis strongly signals that facially discriminatory policies against transgender people are equally vulnerable under the updated statute. The unavailability of a “legitimate business purpose” defense for public accommodations remains, and the BFOQ-like interpretation of “legitimate business purpose” will likely inform future business-discrimination cases under both “sexual orientation” and “gender identity.”

4) Complex Concepts Simplified

Facial discrimination: A policy that explicitly treats a protected group differently on its face (e.g., “transgender women are not allowed”). No inference is needed; the discrimination is overt.
Direct evidence v. circumstantial evidence (McDonnell Douglas): Direct evidence proves discriminatory motive without inference (e.g., explicit policy statements). Circumstantial evidence uses a three-step burden-shifting framework (prima facie case; defendant’s legitimate reason; plaintiff’s pretext). Direct evidence makes McDonnell Douglas unnecessary.
“Legitimate business purpose” (MHRA § 363A.17(3)) v. “legitimate, nondiscriminatory reason” (McDonnell Douglas step two): The statutory defense is a high bar that applies after discriminatory motive is shown and requires necessity, no stereotypes, and no reasonable alternatives. The McDonnell Douglas “legitimate reason” is a lower, procedural burden during inference-based proof.
Public accommodation: Broadly includes businesses or facilities whose goods/services are available to the public. The MHRA makes it unlawful to deny full and equal enjoyment because of protected status and does not provide a “legitimate business purpose” defense.
Stare decisis and Goins: Courts generally adhere to precedent (stability/predictability). The Court preserves Goins but confines it to employment, signaling that its rationale does not govern public accommodations or business claims involving transgender litigants.
Summary judgment posture: Courts view the record in the light most favorable to the nonmoving party. Even with direct evidence of discrimination, summary judgment may be inappropriate where a statutory defense raises genuine factual disputes.

Conclusion

Cooper v. USA Powerlifting establishes two consequential principles under Minnesota law. First, categorical exclusions of transgender women from women’s events are facially discriminatory and constitute direct evidence of discrimination under the MHRA. Second, for business discrimination claims, the “legitimate business purpose” defense demands a BFOQ-like showing: the policy must be reasonably necessary to the enterprise’s central mission, non-stereotypical, and without reasonable, less discriminatory alternatives—whereas no such defense exists for public accommodations claims based on sexual orientation. The Court also clarifies that Goins v. West Group remains confined to employment contexts and does not limit claims like Cooper’s.

On remand, USAPL faces established liability for sexual-orientation-based discrimination in public accommodations, with remedies to be determined consistent with the Court’s opinion. Its business-discrimination exposure turns on whether it can carry the heavy burden of proving that its categorical exclusion is necessary to the essence of fair competition in powerlifting and that no narrower alternative would serve that mission. For sports organizations and other public-facing entities in Minnesota, the takeaways are clear: facial bans invite direct-liability findings, “customer preference” is not a defense, and any attempt to justify differential treatment must be tightly tied to mission necessity and narrowly tailored.