American Eagle Outfitters said it will revise its employee clothing policy to accommodate transgender workers.
The clothing company came to a settlement with New York Attorney General Andrew Cuomo after he sided with activists who complained that the retailer discriminated against transgender job applicants.
"To avoid further expense and the distraction of a prolonged argument, [we have] agreed to a compromise settlement in this case, with the understanding that AEO is not admitting to the findings," the company said in a statement, the New York Daily News reported this week.
"We wholeheartedly believe that transgender individuals should be treated equally."
Prior to the settlement, AEO's policy barred male employees from wearing women's clothing and women workers from wearing men's clothes. In the settlement, which took place in April, AEO agreed to change its policies and to train its employees on transgender issue.
Tony Perkins, president of Family Research Council, said in a statement Thursday, "Every American who believes in the right of employers to set dress and grooming standards for their employees should be alarmed by how this attorney general has used bullying tactics and litigations to impose cross-dressing polices on American Eagle Outfitters."
The conservative pro-family organization warned that the American Eagle incident could happen nationwide if Congress passes the Employment Non-Discrimination Act, a bill that would make it illegal for employers to hire, fire, promote or pay an employee based on their sexual orientation.
"Family Research Council and the families we represent are committed to defeating this bill which will trample on the Constitutional freedoms of religion and speech of both employers and employees," Perkins said.
The AEO incident is reportedly the first time the state of New York has used the provision in the Human Rights Law that prohibits employers from discriminating against job seekers based on gender identity against a retailer.