See this article about Diane Schroer who was refused a job at the library of congress when she revealed her desire to transition from male to female.
http://www.aclu.org/lgbt/transgender/40092prs20090701.html
The Bush administration had argued that transgendered are not protected by existing discrimination laws. The federal court ruled that they are and IMHO their reasoning could have far reaching implications for transgender rights issues. According to the ACLU article the court argued in the following way:
“Imagine that an employee is fired because she converts from Christianity to Judaism. Imagine too that her employer testified that he harbors no bias toward either Christians or Jews but only ‘converts.’ That would be a clear case of discrimination ‘because of religion.’ No court would take seriously the notion that ‘converts’ are not covered by the statute.” The court also ruled that the library was guilty of sex stereotyping against Schroer because of its view that she failed to live up to traditional notions of what is male or female."
The Obama administration has refused to appeal the decision of the court.
If other courts follow this reasoning, then the need for explicit anti discrimination laws covering GLBT people could become moot. But I am skeptical that other courts will follow this reasoning. Were this case to reach the Supreme Court, I would be really surprised if the Supremes bought this argument.
