Imagine the reaction in most Texas workplaces if a female secretary informed management of a planned transition to becoming a man, or if co-workers discovered that a male supervisor dressed as a female outside the workplace. These scenarios are a human resources director’s nightmare as a politically incorrect comment by a co-worker could lead to a claim of discrimination or harassment.

A recent Equal Employment Opportunity Commission (EEOC) decision has made it more likely for such claims to be filed, as the agency recognized for the first time that discrimination against transgender employees is covered under federal law as discrimination “based on sex.” This decision applies to all businesses with more than 15 employees, and will affect large and small businesses alike.