The courts are divided on this question. Transsexuals who have sued for unlawful sex discrimination generally advance two claims. First, they argue that they have been literally discriminated against because of their sex in violation of Title VII. Second, they argue that they have been subject to impermissible “sex stereotyping” by employers in violation of Title VII. This “sex stereotyping” claim arose from the U.S. Supreme Court’s famous decision in Price Waterhouse v. Hopkins (1989) in which the Court ruled that a woman denied a promotion to partner because she did not supposedly conform to recognized gender stereotypes did present a claim of unlawful sex discrimination.

Many courts have rejected the first argument—that transsexuals are a protected class—but have accepted the second argument—that an employer can violate Title VII by imposing sexual stereotypes upon a transsexual.

Admittedly, this is a very difficult area of the law and once again shows the necessity of a skilled attorney to litigate these matters competently.