A woman who was fired while preparing to undergo sex-change surgery was let go in violation of state anti-discrimination law, the head of Colorado's civil rights agency has ruled.

Advocates praised the ruling, saying it was the first of its kind in Colorado and a sign that society has begun to better understand transgender people.

Danielle Cornwell, 54, claimed in a complaint filed in April with the Civil Rights Division that she was fired in July 2005 because she was a woman and because she had recently told the company she planned to undergo gender-reassignment surgery.

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Originally known as David Michael Cornwell, she had realized while working for Intermountain Testing Co. that she was a transgender woman, according to the ruling. She began assuming a feminine appearance, and also told her employer she planned to change her name and dress in women's clothing.

The company, which uses X-rays and other methods to test materials for the construction and manufacturing industries, argued Cornwell was fired because of a decline in business and because she had a low performance rating.

In his Aug. 21 decision, Civil Rights Division Director Wendell Pryor agreed Cornwell was fired because she was a woman said the evidence did not support the company's claims. He said no other employees doing similar work were fired.

"Given this, it appears that the (company's) decision to discharge (Cornwell) was based on her gender — female," Pryor wrote.

Intermountain Testing President Gary Bollerud did not return a call. His attorney, John Husband, declined to comment.

The ruling means Cornwell and representatives of her former employer will meet in October to try to agree on a resolution, her attorney, John Hummel, said Thursday. Cornwell said she would not seek her job back. Hummel said such cases typically are resolved with a cash settlement.

"The well's been poisoned," Cornwell said.

Hummel, who works for the Legal Initiatives Project of the Gay, Lesbian, Bisexual & Transgender Community Center of Colorado, said it was gratifying that the agency did not find the case controversial.

"Maybe that's a sign of progress in society in beginning to understand transgender people more than they had before," he said.