On November 7, 2013, by a bipartisan vote of 64-32, the Senate passed the Employment Non-Discrimination Act (ENDA), which would provide basic protections against workplace discrimination on the basis of sexual orientation or gender identity. Although it appears that the bill is unlikely to get a vote – much less be passed – by the House of Representatives, it is clear that the law regarding the rights of transgender employees is evolving. Although case law is rather sparse at this point, the EEOC has taken the position that discrimination based on gender identity is impermissible under Title VII. As the law continues to develop in this area, more employers are being confronted with the issues raised by transgender employees and applicants who are often very candid about their status. As a result, employers are wise to implement some best practices to address the issues that may arise in the workplace and to insure that transgender employees are treated equally.

Review and revise the employee handbook. Your existing policies and practices should be drafted to apply equally to all employees. When identifying the list of protected categories, consider adding “gender identity or expression.” While gender identity is not explicitly covered by Title VII, numerous courts have held that sexual stereotyping is a form of gender discrimination. You may also want to update your anti-harassment policy to include gender identity.

Provide workforce sensitivity training. Some discrimination is rooted in reactions from employees to individuals who do not fit their expectations of what is “normal.” Sensitivity training in this area is obviously a key to avoiding liability and reducing your exposure to potential claims. Employers should also try to make their managers and employees more sensitive to gender identity and expression by incorporating these topics in EEO and harassment training programs.

Update personnel records. Once an employee announces a gender transition and begins to present as a member of the opposite gender, you should take appropriate measures to recognize that “new” identity. That includes changing the employee’s name and gender on all personnel records, emails, directories and business cards, and updating photos on identification badges and promotional materials, including your website.

Treat transgender employees’ status confidentially. A number of federal laws, including the Family and Medical Leave Act (FMLA), Americans with Disabilities Act (ADA), Health Insurance Portability and Accountability Act (HIPAA) and Genetic Information Nondiscrimination Act (GINA), all limit your ability to request medical information and require you to maintain employees’ medical information in confidence. Apply the same principles when you learn that an employee is transgender.

Consider restrooms and other gender-specific areas. In general, employees must use the facilities that match their full-time gender presentation, regardless of their stage of transition. If an employee is entering the transition process, you should use that opportunity to determine when the employee is comfortable making the switch to using the bathroom assigned to the other gender.

Review your dress code. An employer is entitled to have reasonable dress and grooming codes that serve a legitimate business purpose. You should, however, review your dress and grooming codes to avoid gender stereotypes. For instance, policies that specifically define the kinds of attire that males and females may wear in the workplace tend to be based on sexual stereotypes and gender expectations. A better statement is to require all to dress professionally.

Given that one of the EEOC’s key objectives in its Strategic Plan for 2012–2016 is to address emerging and developing issues, it is safe to expect that the EEOC will likely give special attention to charges that raise claims of discrimination based on gender identity. As a result, potential claims of discrimination from transgender individuals should be considered using the same fact-finding investigation process and response as a traditional sex discrimination complaint. By being proactive and anticipating that gender identity issues may arise in the workplace in the near future, employers can avoid being the target of a potentially high-profile, precedent-setting claim while fostering a culture of respect for all employees.