In December 2006, the New Jersey legislature amended the New Jersey Law Against Discrimination ("LAD") to add protections from discrimination based on "gender identity and expression." Specifically, under this new amendment a person is protected from "gender identity or expression" discrimination if she or he has or is "perceived as having a gender related identity or expression whether or not stereotypically associated with a person's assigned sex at birth." Under the new law, discrimination based on gender identity or expression is prohibited in connection with, among other things, an individual's employment, housing, access to places of public accommodation (including hospitals, restaurants, hotels and retail stores), and receipt of loans and/or other financial assistance. The amendment does, however, permit an employer to require that employees adhere to reasonable workplace appearance, grooming and dress standards consistent with the employee's gender identity or expression. The amendment also provides that while places of public accommodation can maintain certain single-sex facilities such as comfort stations and dressing rooms, individuals must be allowed to use such facilities based on their gender identity or expression.

The amendment was signed by the Governor of New Jersey on December 19, 2006 and provides that it will be effective on 180 days from that date. Accordingly, the new law will take effect on June 17, 2007.

It is significant that the new amendment is a codification of the New Jersey Appellate Division's 2001 decision in Enriquez v. West Jersey Health Systems, 342 N.J. Super. 501 (N.J. Super. Ct. App. Div. 2001). Enriquez, a medical director who was diagnosed with gender dysphoria, sued her employer for wrongful termination, alleging that she was discharged after she began her transformation from a male to female. Enriquez claimed, among other things, that she was discriminated against under the LAD on the basis of her gender and her affectional or sexual orientation. The Court dismissed Enriquez's claim for discrimination based on affectional or sexual orientation because she was not homosexual or bisexual nor perceived to be homosexual or bisexual. The Court held, however, that sex discrimination under the LAD includes gender discrimination, and therefore protects Enriquez from gender stereotyping and discrimination for transforming herself from a man to a woman. The Court noted that "It is incomprehensible to us that our Legislature would ban discrimination against heterosexual men and women; against homosexual men and women; against bisexual men and women; against men and women who are perceived, presumed or identified by others as not conforming to the stereotypical notions of how men and women behave, but would condone discrimination against men or women who seek to change their anatomical sex because they suffer from a gender identity disorder." The Court also concluded that gender dysphoria or transsexualism is a handicap under the LAD's disability discrimination provision.