While Congress has not yet passed an amendment to Title VII of the Civil Rights Act that outlaws employment discrimination based on sexual orientation, public employers are increasingly being sued under Section 1983, which prohibits government from denying citizens their constitutional rights to equal protection of the law.
Employees who use this section essentially argue that someone who suffers anti-gay discrimination is being denied equal protection of the law because of his or her sexual orientation.
Fortunately, making this claim against a government unit is hard unless the employer is foolish enough to establish a policy against hiring based on sexual orientation or openly declares it is terminating someone based on orientation.
Recent case: William sued his former employer, a school district, alleging he had been terminated because of his sexual orientation. But the court tossed out the case because he couldn’t show he was fired pursuant to a policy or custom singling out sexual orientation. The court concluded that “[t]o hold a … local government entity liable for a constitutional violation under §1983, the plaintiff must show that the execution of a policy or custom of the [local government entity] caused the violation.”
William had no evidence that this was the case and therefore lost the case. (Dawkins v. Porter, et al., No. 1:12-CV-414, MD NC, 2013)