by Marc Gunther

'Trans'-forming Corporate America

From General Motors to Google, more companies are agreeing to protect transgender people from discrimination. Fortune's Marc Gunther reports.

By Marc Gunther, Fortune senior writer

(Fortune Magazine) -- When David Rosen became Donna Rose, the people in charge of the human resources department at her company didn't know what to think. Nor did her colleagues.

David was a former wrestler, a husband and a dad. Donna was on her way to becoming a post-operative transsexual woman. This was 1999, and her employer, PCS Health Systems of Scottsdale, Arizona (now a unit of CVS Caremark (Charts, Fortune 500)), had never dealt with a transgender person.

After her own sex change made co-workers uncomfortable, Donna Rose became a crusader for transgender employees.

Nothing awful happened. Rose kept her job as a technology manager. But she didn't get asked out to lunch much, and she was left out of the office football pool. "It was obvious that they weren't comfortable around me," she says, "and I wasn't comfortable with them not being comfortable around me." Before long, she quit.

Lots has changed since then. Rose took a job at Dell (Charts, Fortune 500), where she worked happily for four years. She wrote a book about her experiences and made a DVD called "Understanding Transgender Issues" with Eastman Kodak and the Human Rights Campaign, the nation's largest organization of gay, lesbian, bisexual and transgender (GLBT) people. Now she speaks to companies, including J.C. Penney, J.P. Morgan Chase and the America Online unit of Time Warner, about gender identity and diversity.

It's a safe bet that, even today, most Americans have probably never met a transgender person. Many don't know what the term means. But corporate America is learning, fast.

Transgender is a broad term that refers to people who don't conform to traditional genders. It includes transsexuals -- people who change gender through an established process, often using hormone therapy or sex-change surgery -- as well as people who have taken on a gender identity that differs from their biological sex.

A 2007 "State of the Workplace" report just published by the Human Rights Campaign (HRC) says that 125 of the Fortune 500 companies now specifically prohibit job discrimination against transgender employees. Five years ago, only 15 of the Fortune 500 promised to protect transgender people from on-the-job bias.

Just in the last 18 months, defense contractors Honeywell, Boeing (Charts, Fortune 500) and Northrop Grumman (Charts, Fortune 500), automakers Ford and General Motors (Charts, Fortune 500), hotel firms Hilton (Charts, Fortune 500), Starwood and Marriott (Charts, Fortune 500) and Internet giants Yahoo and Google (Charts, Fortune 500) have added protections for transgender workers. About 70 big companies offer comprehensive medical coverage for transgender employees, including those in transition, according to the HRC.

Why the change?

"This is a direct result of the organizing that employees have done on the issue of sexual orientation," says Daryl Herrschaft, who oversees the HRC's workplace project. As gay and lesbian employees form internal networking and lobbying groups, they have been able to persuade their employers to protect transgender rights as well.

Broader social forces are also at work. Movies like "Boys Don't Cry" (1999) and "Transmerica" (2005) exposed transgender characters to audiences. Last spring, Newsweek published a cover story called "The Mystery of Gender," and an L.A. Times sportswriter named Mike Penner told his readers that he would take a vacation and return as a woman, Christine Daniels.

After the city manager in Largo, Florida, disclosed that he planned to have a sex-change operation, he got lots of attention -- and lost his job.

Only a small number of people are thought to be transgender -- no reliable statistics are available -- but for those who are going through a transition, workplace support is essential.

"There is that day where they come in and present as another gender," Herrschaft says. "That's the critical moment, not only for transgender people, but for their managers and their companies."

Companies may need to explain the situation to other workers, devise a restroom policy and decide how to handle such logistical issues as how to remake ID badges. Typically, transgender people must spend at least a year presenting themselves as their preferred sex before undergoing sex-change surgery.

The HRC offers guidelines for employers and the group is releasing Rose's DVD, which tells her story. Rose, who is 48, has joined the board of HRC, as an advocate for transgender people.

She never planned to become an activist, she told me the other day. "All I ever really wanted to be was Donna," she said. Top of page