Via Andrew Sullivan, for whom I'll grant a few cheers after previously dunning him for his attitude regarding trans issues, Kate Sheppard explains why ENDA has to include protections for gender identity in order to really have any effect on anyone.
But when it comes down to it, most of the discrimination directed at the LGBT community is based not on actual knowledge that someone’s sexual orientation is something other than heterosexual, or seeing direct evidence thereof, but on the suspicion that one might be. That suspicion comes from assumptions about how men and women should speak, interact with others, groom themselves, or dress—all of which falls solidly in the gender identity and expression realm. If gender identity is excluded from ENDA, the protections for gays, lesbians, and bisexuals aren’t actually guaranteed, as a detailed examination of the legislation conducted by Lambda Legal concluded. The original version of the bill defined "gender identity" as "gender-related identity, appearance, or mannerisms or other gender-related characteristics of an individual." Without that protection, employees can still be fired for not conforming to an employer’s ideas about how men or women should present themselves. For a lot of gay men and lesbians, that protection is key. To be effective, the bill needs to be about protecting everyone—women who don’t wear heels, men who do, anyone who doesn’t fit their gender stereotype, and those who actually identify with a gender other than their biological sex.
I confess to still being uncertain about employment nondiscrimination laws, not because I think discrimination is in any way a good thing (particularly as, in this case, I have a great deal to gain or lose from the inclusion of gender identity in the bill), but because it's easy for government to protect popular freedoms. But the real purpose of government, as far as I am concerned, is to protect less popular rights. See, for example, the right for Nazis to march in Skokie. Freedoms only really mean anything if people can do things that the majority prefers they did not.
On the other hand, the freedom to discriminate in employment doesn't strike me as a particularly fundamental right, slippery slope arguments aside. More importantly, I'm a practical woman, and this particular dam long since burst. As long as the government is going to protect people from employment discrimination, there is absolutely no reason why everyone shouldn't benefit from those protections, including those of us whose expression of gender identity doesn't fit neatly into the two boxes society provides.