A federal appeals court on Wednesday ruled that a Michigan funeral home broke federal law when it fired a transgender woman, while tossing out the employer's claim that a religious objection created a legal loophole to terminate her.

The decision builds on a tide of federal court rulings that have found workers are protected from anti-LGBT discrimination, even though there is no federal law explicitly barring discrimination on the basis of sexual orientation or gender identity.

It is the first time in such a case that a federal appellate court considered an employer’s claim for a religious recusal under the Religious Freedom Restoration Act, a 1993 federal law known as RFRA — siding here with the transgender worker.

"The significance of this decision is hard to overstate," Sharon McGowan, a lawyer for Lambda Legal, which filed a brief supporting the woman's claim, told BuzzFeed News.

The decision builds on "the overwhelming consensus" emerging from the judiciary, which contrasts with Trump administration's efforts to narrow the meaning to Title VII to omit LGBT people, she said.

In ruling for Aimee Stephens and the Equal Employment Opportunity Commission, a federal agency that brought the case, the US Court of Appeals for the 6th Circuit found anti-transgender discrimination is prohibited by Title VII of the Civil Rights Act of 1964, which bans discrimination on the basis of sex, and that employing a transgender person posed no substantial burden on the employer’s religious exercise.

"Discrimination against employees, either because of their failure to conform to sex stereotypes or their transgender and transitioning status, is illegal under Title VII," said a 49-page opinion led by Judge Karen Nelson Moore.