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Sexual orientation as a legal concept is generally understood to refer only to whether a person is homosexual (gay), heterosexual (straight), or bisexual. Not all transgender people are gay. In fact, many transgender people identify as straight; many transgender women have male partners and many transgender men have female partners. When transgender people face discrimination, it often has no relationship to their sexual orientation.
Twenty-two states and the District of Columbia make it illegal to discriminate in employment on the basis of sexual orientation. Of these, Nineteen and the District of Columbia explicitly include transgender and transsexual people. In other states where courts have analyzed the state's sexual orientation anti-discrimination law, courts have narrowly interpreted the laws to exclude gender identity on the grounds that there is no evidence that gender identity was intended to be included in the law's definition of sexual orientation. Maffei v. Kolaeton Industry, Inc., 626 N.Y.S. 2d 391 (N.Y. Sup. Ct. 1995) (holding that the definition of sexual orientation in New York City ordinance does not include transsexualism); Underwood v. Archer Management Services, Inc., 857 F. Supp. 96, 98 (D.D.C. 1994) ("a conclusory statement that [transsexual plaintiff] was discharged on the basis of transsexuality . . . does not constitute a claim for relief on the basis of . . . sexual orientation") However, in all three of these locales, discrimination on the basis of gender identity is now illegal under a state law basis other than sexual orientation: Connecticut (sex); New York (sex); District of Columbia (personal appearance)". For more information about states that have anti-discrimination laws protecting transgender individuals see lgbtmaps.org.
If you are a transgender person who is considering bringing a discrimination claim in a state or city with a sexual orientation discrimination ordinance that does not specifically include gender identity, you should consult with a local attorney, as well as a person familiar with the history of the state law or city ordinance, to determine whether this strategy is likely to be successful.
"What the LGBT community want is [for being LGBT] to be ordinary so that you are seen to be valued on merit. When our employees don’t have to think twice about struggling for the same benefits, recognition, or are afraid of being safe, then productivity goes up."
–Claudia Brind-Woody, VP & Managing Director, IBM
from The National LGBT Workers Center