A woman has taken the Library of Congress to court, alleging a job offer there was withdrawn one day after she informed an official that she was making the transition from being a man to a woman.
Diane Schroer, 52, has sued for sex discrimination under the Civil Rights Act.
Schroer is a former Army Special Forces commander and applied in 2004 for a job as a terrorism research analyst.
She testified on Tuesday that she was shocked when the job offer was rescinded.
The Library of Congress has argued that Schroer cannot sue because the Civil Rights Act does not protect transsexuals or prohibit discrimination on the basis of gender identity.
The trial is being heard without a jury and testimony is expected to last about a week.
The Library of Congress is the de facto national library of the United States and the research arm of the United States Congress.
It is the largest library in the world by shelf space and holds the largest number of books.