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Purpose – The purpose of this paper is to enhance the understanding of employers’ responses to the restroom requests of transgender employees, and to assess the ability as educators to reduce transphobia in the students. Design/methodology/approach – Subjects were 194 undergraduate business students at a medium-sized public university in the northeastern USA who were enrolled in an undergraduate course in organizational behavior. During class, they read a brief case which asked the students to play the role of a CEO in Little Rock, Arkansas, receiving a complaint from a female employee about using the same restroom as a coworker who is transitioning from male to female. Findings – The most inclusive response was also the rarest, with only 27 percent of students recommending unisex bathrooms. Hostile actions, forcing the transitioning employee to use the men's restroom, were recommended by 38 percent of those who correctly realized that an employee would be unprotected by sexual orientation discrimination law in this case and by 30 percent of those who thought that she could sue for that type of discrimination in that jurisdiction. Research limitations/implications – It would be interesting to replicate this with non-student samples such as human resource managers and executives. The use of a US sample and of a text-based case can also be viewed as weaknesses. Because gender identity is embodied, self-constructed, and socially constructed, no single research study can capture the totality of work life for transgender employees. Practical implications – Transphobia is so powerful that a substantial percentage of the students recommended courses of action that they believed to be illegal even though the study was designed to discourage a hostile response. Employers that are concerned about transgender rights will need to do a lot more than just grafting the word “transgender” onto their extant set of policies. Social implications – Since today's business students are tomorrow's business leaders, the authors could eventually make the business world more tolerant if the authors could identify a message that resonates with the students and causes them to re-evaluate their homophobia and transphobia. Originality/value – Empirical studies of transgender issues have been dominated by the qualitative approach, so there is a need for more quantitative research on this topic. The hostile responses usually indicated greater acceptance of transgender employees who have completed gender reassignment surgery. This seems difficult to reconcile with a conception of transphobia as a generalized distaste towards all those who transgress gender norms.

Transgender employees may suffer from discrimination due to transphobia. This article evaluates a pedagogical intervention designed to reduce the transphobia of North American undergraduate business students. Participants were enrolled in an organizational behavior course. They resolved a simulated dispute between coworkers over accommodating the bathroom choices of a transgender employee. Answers were classified as demonstrating inclusion, compliance, or hostility with the inclusive response being the establishment of gender-neutral restrooms and the hostile response being refusal to accept the transgender employee's bathroom choice. In the first year, 194 students completed the exercise with no advance preparation, while in the second year, 221 students performed the same task after reading a brief article about transgender employees. Results suggest that the intervention was effective as the inclusive response was most popular in the second year even though it had been least popular in the first year. Complete success was not attained, as one sixth of the students in the second year chose hostile responses. Implications for research, teaching, and practice are discussed.

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Theoretical basis Organizational Justice Theory serves as a useful frame for discussion of this case, focusing on perceptions of fairness in the workplace. Such perceptions are shaped by outcomes, procedures, information and interpersonal treatment. Perceptions of justice in these four dimensions are associated with job performance, citizenship behaviors and some mental health outcomes. The Exit, Voice, Loyalty, Neglect (EVLN) Model outlines four potential responses (exit, voice, loyalty and neglect) to perceived job dissatisfaction, serving as a useful framework for students to discuss potential employee reactions to Starbucks’ decisions. Research methodology This case was developed from secondary sources, including news reports, company annual reports and websites. The case has been classroom tested with undergraduate students in Principles of Management (online and face-to-face) Human Resource Management (online asynchronous) and Labor/Management Relations (online synchronous). Case overview/synopsis In June 2020, Starbucks became immersed in controversy when its dress code policy conflicted with its public support for national protests over police brutality against Black Americans, including the death of George Floyd while in police custody. While publicly supporting the protests in a series of tweets, an internal memo forbidding employees from wearing Black Lives Matter attire was leaked to the press, generating national outcry, threats of a boycott and forcing Starbucks to reverse course immediately. This case examines the benefits and challenges of a corporate dress/uniform policy, and the implications of corporate involvement in social justice issues. Complexity academic level This case can be used in a wide range of undergraduate and graduate courses, but particularly in Principles of Management and Human Resources courses.