Goodness - this came out of nowhere!  I had no idea such an important case was brewing in quiet old Maine.  Here is the news bit from the Bangor Daily News (pronounced - "Bane- gore" NOT "bang 'er")

The short summary is that a 5th grader who identifies as a girl was harassed in the girls washroom (by a boy who followed her in and called her "faggot"), so the school assigned her to the faculty single-user washroom which was at the opposite end of the school from her classroom.  The family didn't approve of this solution and filed a complaint with the Maine Human Rights Commission

The interesting thing about this case is that it sounds as if the school was really trying to walk the fine line of balancing the trans girl's needs along with taking into consideration the (unwarranted and misinformed) fears and concerns of the other parents and chidren in the school. 

The school would have done well to consult with some other schools that have been through this process already (such as Toronto District School Board - see ref below) or read up on other similar cases (such as Doe v. Brockton Sch. Comm). The parents also felt as if they weren't consulted or included in the proposed solutions which is what led them to file the complaint.  Many schools feel as if they are the only ones dealing with these issues and the truth is -- they aren't.  With the advances made by GLBT advocates in the past few decades children are recognizing and "coming out" as transgender at younger ages.  Some universities have been working to better accomodate trans students' needs in the past decade, and now high schools and elementary schools are having to learn about addressing these same issues: names, pronouns, restrooms, gym class.  It only goes to show how sex-segregated our society is.  I'm all for the days of Ally McBeal and non-sex-segregated bathrooms.  If you have stalls, that's all the privacy anyone really needs, right?

We can't keep putting our heads in the sand, folks!  There is gender and sexual diversity all around us and as public institutions schools have a responsibility to provide a safe and inclusive learning environment for all students.  Since an Ally McBeal scenario is unlikely at your local elementary school, some interim measures include: having single-user washrooms centrally available as these can accomodate people in wheelchairs, parents with small children needing assistance, nursing mothers, etc.  Another step that McGill University has taken is adding a "preferred name" in the student database.  This allows students to have a "nickname" that represents who they are and how they identify.  This is important to avoid outing trans students the first day of class.  There are still problems with the system since first names still appear on official documents and class lists (which are viewable on WebCT by other students), but the registrar is slowly moving (being gently nudged)  in a more trans-inclusive direction.

Lesson for teachers and school administrators: you are not alone.  Do your homework.  Engage in dialogues with the main parties involved and take action based on what is in the best interests of that chid, not fear of backlash from others.  Please post questions and comments and forward it along!

References:

Callender, D. R. (2008). When Matt became Jade: Working with a youth who made a gender transition change in high school. In I. Killoran & K. P. Jimenez (Eds.), Unleashing the Unpopular: Talking about sexual orientation and gender diversity in education (pp. 37-52). Olney, MD: Association for Childhood Education International.
 

Doe v. Brockton Sch. Comm (No. 2000-J-638 Mass. App. 2000)