"This is a confirmation that the courts are correct, so public and private employers coast to coast now have the benefit of the EEOC making this clear," she said.

Peter Sprigg, senior fellow for policy studies at the Washington-based Family Research Council, said the EEOC's decision is misinterpreting Title VII of the Civil Rights Act.

"Those who are discriminated against because they are transgender are not discriminated because they are male or female, it is because they are pretending to be the opposite of what they really are, which is quite a different matter," he said.

Currently 16 states and the District of Columbia have laws prohibiting discrimination based on gender identity. Mark Snyder, a spokesman for the Transgender Law Center, said that EEOC offices in the remaining states would now have to heed the new decision.

Federal employment discrimination laws cover private and public employers with 15 or more employees.

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