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A New York State trial judge has rejected a challenge to a New York City law banning gender identity discrimination in places of public accomodation.

In a decision released Friday, Judge Kenneth Sherman said that the City Transit Authority–or TA–could NOT move forward with its claim that the city’s Human Rights Law violated the First Amendment rights of one of its employees. But Sherman DID say that the city could step in to defend the anti-bias law’s constitutionality, which the TA also questioned. That law added provisions prohibiting transgender discrimination in 2003.

It’s a part of the case brought on by transgender plaintiff Tracy Bumpus and the advocacy group Housing Works. Bumpus claims a transit worker repeatedly shouted transphobic remarks at her back in 2006.

The TA argued that the worker could not be held accountable under the anti-discrimination law because she wasn’t a supervisor–a claim that Judge Sherman struck down, saying, “there’s no authority” for limiting who must adhere to the Human Rights Law. Sherman also didn’t buy that the transit worker was being denied her right to free speech during the verbal attack.

Housing Works Senior Staff Attorney Armen Merjian says he and his team are still “basking in the afterglow” of what they consider to be a landmark decision.

MERJIAN: “It’s sad that we have to be joyous about something that should have been granted yesterday, right–that should have always been there. It’s sad that we’re glad to be accorded rights that folks should have had from the very beginning. But because we know the way the world works and that they hadn’t, and haven’t heretofor had those rights, we’re still ecstatic to see this come down.”

Merjian says a settlement conference is scheduled for February. But, if the two parties cannot reach a mutual decision, the case may go to trial.