Don’t fire an employee for cross-dressing or allow co-workers to harass a female worker who acts masculine until you understand your potential liability under the increasing number of “gender-identity discrimination” laws. Such laws typically prevent discrimination against workers or applicants because they don’t conform to the stereotypes of how a man or woman looks, lives or acts.
So far, 13 states have passed such laws: California, Colorado, Connecticut, Illinois, Iowa, Maine, Minnesota, New Jersey, New Mexico, Oregon, Rhode Island, Vermont and Washington. So have many big cities, including Atlanta, Dallas, New York and San Francisco.
Outlook: While federal legislation has been introduced, don’t expect it to pass. Count on states and cities to keep pushing the issue. Also, employees will probably have some success bringing such claims under other federal laws, including sex discrimination under Title VII.