The Justice Department is now interpreting federal law to explicitly prohibit workplace discrimination against transgender people, according to a memo released Thursday by Attorney General Eric Holder.

That means the Justice Department will be able to bring legal claims on behalf of people who say they've been discriminated against by state and local public employers based on sex identity.  In defending lawsuits, the federal government also will no longer take the position that Title VII of the Civil Rights Act, which bans sex discrimination, does not protect against workplace discrimination on the basis of gender status.

The memo released Thursday is part of a broader Obama administration effort to afford workplace protection for transgender employees. In July, President Barack Obama ordered employment protection for gay and transgender employees who work for the U.S. government or for companies holding federal contracts.

The new position is a reversal in position for the Justice Department, which in 2006 stated that Title VII did not cover discrimination based on transgender status.

"The federal government's approach to this issue has also evolved over time," Holder wrote in the memo, saying his position was based on the "most straightforward reading" of the law.

The memo covers all components of the Justice Department as well as all U.S. Attorneys' offices. The Justice Department does not have authority to sue private employers, and the new memo does not affect that.