Many states have statutes prohibiting discrimination against employees on the basis of sexual orientation or gender identity. Not all states have such prohibition, and since there is no broad federal prohibition on discrimination by private employers based on either category, that leaves local ordinances to address the issue. A look at what is happening in Texas can offer insight into these trends across the country. 
Local ordinances across Texas
Virtually all the largest cities in Texas either already have or recently passed some sort of ordinance prohibiting sexual orientation and gender identity discrimination. The scope of the ordinances vary, but they generally aren’t yet as broad as the existing antidiscrimination prohibitions in the Texas Labor Code or the main federal antidiscrimination laws―i.e., Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, and the Age Discrimination in Employment Act.
El Paso’s ordinance, for example, prohibits gender identity or sexual orientation discrimination regarding “any of the accommodations, facilities or services offered to the general public by [a] place of public accommodation.” So a restaurant or hotel would be prohibited from denying a patron food or lodging on the basis of her sexual orientation or gender identity, but the ordinance doesn’t really address employment decisions.
Last September, the San Antonio City Council adopted a similar ordinance. Along with prohibiting workers in public accommodation jobs from refusing to serve customers based on their sexual orientation or gender identity, it prohibits council members from discriminating in their official capacity.
Houston’s city policy prohibits discrimination in municipal employment. It already prohibited sexual orientation discrimination when the mayor expanded it by executive order in 2010 to explicitly prohibit discrimination or retaliation “based on . . . a person’s gender identity and gender expression.”
Austin seemingly goes further than other cities in Texas. For example, the city itself offers healthcare benefits for same-sex couples. Austin’s “Unlawful Employment Practices” ordinance also prohibits discrimination against employees or applicants on the basis of their sexual orientation or gender identity (and doesn’t expressly limit its application to public employees or contractors).
The city’s Equal Employment and Fair Housing Office (EE/FHO) can investigate charges of sexual orientation or gender identity discrimination. If the agency believes there has been a violation of the ordinance, it will attempt to conciliate the matter, with the goal of having the parties enter into a settlement. If the conciliation process doesn’t work, the EE/FHO may refer the matter to the city attorney for “prosecution in municipal court.”
While that possibility sounds ominous, there’s one problem: No remedy is spelled out in the ordinance. Thus, even though sexual orientation and gender identity discrimination is clearly prohibited in Austin and there’s a process for investigating allegations, it isn’t clear if the ordinance ultimately has the teeth to punish private employers.
The situation is slightly different for contractors with the city of Austin. They must submit a certification stating they will comply with nondiscrimination obligations, including advertising, posting notices, and taking affirmative action steps. The remedy for noncompliance by contractors is more obvious: They can lose or be denied city contracts.
Bottom line
Does all of that mean sexual orientation and gender identity discrimination claims ultimately cannot be filed by private-sector employees in Texas and states like it? Not necessarily. Both administrative agencies and legal counsel can be adept at blurring the lines to fit claims into covered categories. Thus, a sexual orientation or gender identity claim may be characterized as simply a “gender” discrimination claim. With rapidly evolving federal and state laws (and court rulings) dealing with same-sex marriage, issues involving employees’ sexual orientation or gender identity are likely to trend toward stricter employer obligations.