Oct 5 (Reuters) - The U.S. Department of Justice has reversed course on whether federal law banning sex discrimination in the workplace provides protections for transgender employees, saying in a memo that it does not.

The memo sent to U.S. Attorneys' offices on Wednesday by Attorney General Jeff Sessions says Title VII of the Civil Rights Act of 1964 only prohibits discrimination on the basis of a worker's biological sex, and not their gender identity.

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Sessions rescinded an Obama administration memo from 2014 that said Title VII does protect transgender people, a position also taken by several federal appeals courts in recent years.

Department spokesman Devin O'Malley said in a statement the government cannot expand the law beyond what Congress had intended.

"Unfortunately, the last administration abandoned that fundamental principle, which necessitated today's action," he said. (Reporting by Daniel Wiessner in Albany, New York and Sarah N. Lynch in Washington; Editing by James Dalgleish)