Wow, that is a pickle. My husband worked at a place where a man underwent a sex change and there was a small uproar when he bagan to use the ladies room, but it turned out OK, once he announced what he was planing. These people never had to work with the public though, as nurses do.
I think you are really between a rock and a hard spot. I am betting you have no policies that say Men may not wear make-up, so no way can anyone really touch him there. As long as he is neat and professional and does his job, I don't think anyone can touch him. Now, if he is not doing his job, that is another story. Then again, how to deal with the pt's who are disturbed by this, I have no idea. I guess the only thing the manager can do is re-assign him, which would inconvenience another nurse/pt assignment. Since he is doing nothing wrong, how can they reprimand him?? I would be interested to hear how this one turns out, I have never heard of anyone in this kind of situation before. I once worked with a nurse who transferred to another unit, when I caught up w her again several months later, her hair was purple and spiked. I asked what unit she worked on, she said psych. Now frankly, I felt her hair, make-up, and attire (they could wear street clothes) were the stuff delusions and hallucinations are made of, but no one said didly to her.