Steve Stanton trans bias case shows need for education among Largo city officials. (http://www.washblade.com/2007/3-29/view/columns/10297.cfm)
What's happening is that these officials lack an understanding of a psychiatric classification known as gender identity disorder. Those with GID, more commonly referred to as transgender, believe they were born into the wrong gender. Their goal is to reconcile the incongruence by becoming who they were born to be instead of "adapting" to what will make society feel comfortable.
In the case of someone like Stanton, reconciling his inner feelings and outward appearance is not something that will necessarily affect job performance. Any disruption will not come from Steve, or even Susan for that matter. It will come from uninformed co-workers and citizens. It's important to stay focused on who here is really confused, or at least uninformed.
The really bad part there is for others that thought they would transition at work having seen what happened with the department head might hold back now waiting to see the fall out.