Employers who have not already done so need to start thinking about their policies with regard to transgendered individuals, which has become a hot topic based in part on the U.S. Equal Employment Opportunity Commission's interest in the issue.

The EEOC announced this month that a Florida eye clinic agreed to pay $150,000 to settle one of the first two lawsuits the agency filed that charged sex discrimination against a transgender individual.

The EEOC in September had charged that Lakeland, Florida-based Lakeland Eye Clinic fired its director of hearing services after she began to present as a woman and informed the clinic she was transgender and transitioning from male to female, though she had performed her duties satisfactorily throughout her employment. The EEOC charged the clinic's actions had violated Title VII of the Civil Rights Act of 1964.

Meanwhile, still in litigation is another transgender EEOC suit filed in September against Detroit-based R.G. & G.R. Harris Funeral Homes Inc., in which the agency charged the firm had fired a funeral director/embalmer because she is transgender. In another case filed in September in Houston against Saks Fifth Avenue, Leyth Jamal charges she was fired in retaliation for complaining to the EEOC that managers and co-workers at the Saks Off 5th outlet store in Katy, Texas, had engaged in gender-based intimidation and harassment regarding her transgender identity in violation of Title VII.

As businesses have seen in the past, after a while litigation on particular issues tends to take on its own momentum. For instance, litigation was filed last week in U.S. District Court in New Orleans in Tristan Broussard v. First Tower Loan L.L.C., in which Mr. Broussard charges that after a supervisor at the Flowood, Mississippi-based company learned the 21-year-old transgender was listed on his driver's license as a female, he was fired after he refused to be addressed and dress as a female. From a legal standpoint, these cases are not necessarily a slam dunk for the plaintiffs. As defense employment attorney Robin E. Shea, a partner with Constangy, Brooks, Smith & Prophete L.L.P. in Winston-Salem, North Carolina, points out in her blog, it is still unclear whether Title VII applies to garden-variety “sexual orientation discrimination” where no “gender stereotyping” is involved.

Still, no employer wants to be the target of such a suit. No matter how well-intentioned a firm may be, it is hard for any business to emerge from these situations looking good. Firms would do well to take pre-emptive action on this issue by being sure their policies address transgender individuals.

And that policy should address one critical, if somewhat uncomfortable, issue: bathrooms. The Office of Federal Contract Compliance Programs already has proposed a new guideline for federal contractors that, among other provisions, requires contractors to provide transgender employees access to bathrooms used by the gender with which they identify.