They should (and probably do) have “Sex: male/female” on the application, so they could fire her for lying on the job application. Since her sex is in fact female, regardless of her claimed gender, they would then have the right to fire her for a lack of integrity, and it would not be discrimination, not even under the insane standards of gay activists.
The application probably asks for “gender,” rather than sex. Most forms do these days.
Anyway, if they bought her being a man during the interview, maybe they could have just let her work, see how she did with clients.
That is what I've seen some people saying. But the company went further. Instead of just firing her for lying, they tried to get her to sign an agreement to behave as a woman. That's where they screwed up, because they didn't realize this girl was spoiling for a legal fight from the start--in my opinion.