Call it a victory for fairness in Margaritaville.

Khadijah Farmer, the lesbian patron who alleged that Caliente Cab Company ejected her from the restaurant because she appeared too masculine to use the women’s restroom, has settled her lawsuit against the West Village establishment.

As part of the settlement to Farmer v. Caliente Cab Restaurant Company, Inc., the lawsuit she and the Transgender Legal Defense and Education Fund filed in State Supreme Court in October, Caliente has agreed to add gender, including gender identity and expression, to its corporate non-discrimination policy; amend its employee handbook to state "persons patronizing or employed at Caliente have the right to use the bathroom facilities consistent with their gender identity and expression”; adopt a gender-neutral dress code for its employees; institute personnel training programs regarding its new policies; and pay $35,000 in damages to plaintiff Farmer.

The settlement was announced today at 11:30 am during a press conference on the steps of the State Supreme Court in Manhattan, where Farmer was joined by her family, Transgender Legal Defense and Education Fund Executive Director Michael Silverman, and community leaders and activists.

According to her complaint, Farmer patronized the Caliente Cab Company on Seventh Avenue South in Greenwich Village after attending the annual LGBT Pride Parade on June 24, 2007. She claimed that while she was in the women's restroom, a male bouncer entered and pounded on her stall door, insisting that she was a man. He refused to examine the identification she offered, and then ejected her from the bathroom. He threw her, her girlfriend and the rest of their group from the restaurant, after he demanded they pay the bill for their appetizers.

Caliente Cab Company denies the facts of the complaint.

Farmer, a Hell’s Kitchen resident, was born a woman and has identified as female throughout her life, although she has a masculine appearance.

"I'm very happy that the restaurant has taken appropriate steps to ensure that all patrons, regardless of how masculine or feminine they appear, are treated with dignity and respect," Farmer said in a statement released this morning by the Transgender Legal Defense and Education Fund. "People come in all shapes and sizes, and they shouldn't be discriminated against because they don't match someone's expectations of how masculine or feminine they should be."