"They used it as a benchmark," he said.
At Citigroup, this year's 100 percent rating on the Human Rights Campaign list will be included in the company's annual diversity report, which goes to employees, shareholders and community partners. The company will also use it as a recruiting tool. "It's something we felt would help to reaffirm ourselves as employer of choice," said McCarthy.
Many companies that added the term to their policies were approached by Human Rights Campaign or GenderPAC, officials said.
"This is almost a freebie" because it doesn't cost a company anything, unlike providing same-sex partner benefits, said Riki Wilchins , executive director of Washington-based GenderPAC, which spends much of its time training organizations on gender expression.
Larger companies are more likely to offer health care benefits for same-sex partners, according to recent figures. They show 42 percent of the Fortune 500 companies offer same-sex benefits, while a Society for Human Resource Management survey this year found 27 percent of 456 respondents offering domestic-partner benefits.
Ten years ago, "we couldn't even get corporations to talk to us" on the gender identity issue, Wilchins said.
The nation's courts already have ruled on a number of cases in which workers claimed discrimination based on how they expressed their gender.
In 1989, the Supreme Court ruled Pricewaterhouse discriminated because it enforced a sex stereotype when a top female accountant was terminated after senior managers told her she was too aggressive and too masculine. In 1998, the Supreme Court ruled in favor of an oil rig worker who said he was harassed and threatened at work for being effeminate. The Court declared same-sex harassment illegal under the Civil Rights Act.
In 2000, a truck driver for Winn-Dixie was fired after trying to squelch a rumor that he was gay by telling his manager he sometimes dressed as a woman outside of work. When he sued, a federal judge declared that Winn-Dixie had done nothing wrong because there was no law banning discrimination because of gender or sexual identity. That same year, a woman who had worked at Harrah's Reno for 21 years was fired because she refused to wear high heels and makeup. She sued, the courts ruled in favor of Harrah's, and an appeal is now pending.
Organizations that include gender identity and expression on their discrimination policies protect themselves from such lawsuits, Wilchins said. "Companies do this because it's the right thing. But it helps prevent them from also getting whacked with suits because employees are getting training."
But Chad A. Shultz, an employment attorney with Ford and Harrison based in Atlanta, said adding gender expression to a discrimination policy would create a protected class and potentially leave an employer susceptible to more lawsuits. "Now you're giving them a potential claim they didn't have last week," he said.
Joan C. Williams, director of American University's WorkLife Law program, thinks the addition to a policy is "a smart business practice because I think it's a very conventional belief that you should select and promote employees based on their work."
That is a large reason Citigroup added the definition to its policy in April, after some input from employees who wanted a larger and more specific discrimination protection, McCarthy said.
"Over the years," she said, "we've had feedback from employees not only in GLBT and transitioning, but also on the broader issue that the idea of gender identity is important to clearly articulate what we would not tolerate discrimination about."