The Obama administration has allowed the deadline to appeal a transgender ruling to pass, signaling it will not fight the lawsuit, the AP reported.

Tuesday was the last day the Department of Justice could file an appeal in the half-million dollar judgment for Diane Schroer, a transgender woman who sued the Library of Congress after it rescinded a job offer.

“I applied for a job at the Library of Congress as an international terrorism analyst to advise them on our nation's counter terrorism operations. I was selected as the top pick for the job,” Schroer says in a video. “When I told them I would begin work as Diane, the offer was immediately rescinded. The Library of Congress wanted David for the job, not Diane.”

Schroer spent twenty-five years in the Army Special Forces as a man, retiring in 2004 a colonel. Once retired, she began her transition to a woman, and told the Library of Congress she would begin work as Diane. The next day the offer was canceled, and she filed her lawsuit in 2005. A federal judge awarded her $491,190 in back pay and damages because of sex discrimination two months ago.

Bush administration officials had argued that transgender discrimination was not covered under the Civil Rights Act.

Schroer told the AP that the decision to drop the appeal “gives me hope and restores some of my shaken faith in what our country stands for.”

Last year, Schroer testified before Congress in its first serious look at the varied issues involved in transgender job discrimination. Openly gay Massachusetts Representative Barney Frank is sponsoring an employment protections bill that includes both sexual orientation and gender identity.

Schroer said Tuesday that transgender discrimination in the workplace was “rampant” and urged Congress to pass the bill.