Lambda Legal just announced an important victory in a Title VII suit brought by a transgender woman in Texas. Izza Lopez sought and was offered a job at a medical imaging company in 2005, but the company rescinded the offer after it discovered she was trans. ( The company's explanation: she had "misrepresented" herself as a woman despite being born male.
The federal district court rejected motions for summary judgment by both sides, but Lambda viewed the decision as a victory for trans workers, since it apparently accepted the premises that (1) anti-trans discrimination can be considered sex discrimination under Title VII, and (2) employers can't, as a defense, characterize a person's gender expression as "deception" -- at least not where they made no attempt to hide their gender history.
As I've discussed previously, federal courts have had had difficulty grappling with the treatment of anti-transgender discrimination under Title VII. Employers will typically argue that it simply isn't covered by federal law or, as here, assert a "defense" that is simply a reframing of their discriminatory animus. For some background on this in the context of a still-ongoing case with similar facts, see this 2006 post by Arthur Leonard.
The decision isn't up on Westlaw yet, and Lambda's press release is skimpy on details, so it's unclear as yet why the court rejected Ms. Lopez's motion for partial summary judgment. Trans discrimination cases are unusual in that they so often involve "smoking-gun" evidence of discriminatory intent, and this case is no exception: the employer told her the decision was about being transgender. Once the employer's legal arguments are rejected, that wouldn't seem, at first blush, to leave much in the way of material fact questions. Probably there's more to it, and I look forward to reading the decision itself.