It has been ironclad law since the enactment of the Title VII of the Civil Rights Act in 1964 that the Act’s prohibition against discrimination “because of . . . sex” does not include sexual orientation. Federal law does not prohibit employers from terminating someone for being gay or lesbian. For now, at least.

The U.S. Court of Appeals for the Eleventh Circuit (covering Florida, Georgia, and Alabama) confirmed that proposition this month in Evans v. Georgia Regional Hospital. On one hand, the court’s holding reinforced what it and every other federal appellate circuit already had determined. On the other, the court showcased perhaps the most heated internal judiciary battle yet on this issue, which has percolated at high temperatures for the past few years.

The court’s majority opinion in the 2-to-1 decision simply held that the court was bound by precedent in ruling against the lesbian plaintiff. But then rhetorical fisticuffs erupted in the concurring and dissenting opinions, providing artillery for both sides in future court duels.

In one corner is the concurring opinion of Judge William Pryor, a George W. Bush appointee who gave the most thorough reasoning yet – flawed or not – in explaining why “sex” does not include sexual orientation. Taking umbrage is the dissenting opinion of Judge Robin Rosenbaum, a Barack Obama appointee who unloaded on Judge Pryor’s reasoning, then closed with homage to Marlo Thomas’ ’70s era children’s album Free to Be . . . You and Me.

The backdrop was the court’s recognition – shared by many ruling courts – that “sex” under Title VII includes protection against discrimination based on gender non-conformity. In other words, the court followed the general rule making it illegal to terminate a female employee because she acts in ways society stereotypically associates with a man: for example, sporting a crew-cut, riding a Harley, and speaking with a husky voice. And the same goes for a male employee who wears clothes and carries handbags typically associated with the opposite sex. This position has been popular since the 1989 U.S. Supreme Court opinion in Price Waterhouse v. Hopkins.

But does the prohibition against “sex” discrimination based on gender non-conformity extend to sexual orientation? After all, the lesbian plaintiff’s supporters argued that homosexuality is the ultimate form of gender non-conformity.

Judge Pryor answered “no.” He emphasized that gender non-conformity claims concern an employer’s sexually stereotyping someone because of his or her behavior, whereas sexual orientation represents one’s status. The Price Waterhouse case, he wrote, included sexually non-conforming behavior as a protected form of “sex.” He concluded that any category reflecting one’s status, be it race, sex, religion, or sexual orientation, needs to be set forth explicitly within Title VII. Sexual orientation did not make the legislature’s script.

Judge Pryor criticized the dissent for believing that someone who experiences sexual orientation discrimination necessarily suffers discrimination for deviating from gender stereotypes, which would make sexual orientation discrimination illegal. “Although a person who experiences the former will sometimes also experience the latter, the two concepts are legally distinct,” he wrote. “And the insistence otherwise by the . . . dissent relies on false stereotypes of gay individuals.” The message: Not all lesbians act in ways one may associate with being a male.

Judge Rosenbaum labeled this “utter fiction.” She wrote that when one alleges that her employer discriminated against her for being a lesbian, that is just another way of alleging that “she failed to conform to the employer’s image of what women should be – specifically, that women should be sexually attracted to men.”

Judge Rosenbaum ridiculed the concurrence for creating this scenario: A lesbian who masks her sexual preference can be fired for it without recourse; a lesbian who exhibits all the homosexual stereotypes and is fired for her sexual preference has a Title VII claim.

The Pryor-Rosenbaum quarrel has not arrived in vacuum. The Equal Employment Opportunity Commission has formalized its position that homosexuals are per se protected by the “because of . . . sex” language of Title VII. The Commission will investigate all charges of discrimination filed on that basis. One of the EEOC’s commissioners confirmed this month that sexual orientation discrimination will remain a priority within the Commission’s strategic enforcement plan, despite the change in administrations.

Several lower courts also have taken this position despite the universal appellate court precedent. One appellate court, the Seventh (covering Illinois, Indiana, and Wisconsin), reaffirmed last year that sexual orientation discrimination is not prohibited by Title VII, but the panel opinion in Hively v. Ivy Tech Community College was tortured. The court ruled as it did because of binding precedent, then closed with this declaration: “It seems unlikely that our society can continue to condone a legal structure in which employees can be fired, harassed, demeaned, singled out for undesirable tasks, paid lower wages, demoted, passed over for promotions, and otherwise discriminated against solely based on who they date, love, or marry.”

The full complement of Seventh Circuit judges agreed to reconsider the case, and then heard oral argument in November. The court likely will release its opinion soon. Other circuits no doubt will weigh in eventually. And no one will be surprised if the Supreme Court someday resolves the issue.

For employers in 22 states and the District of Columbia, the issue is not as pronounced because those states have laws prohibiting sexual orientation discrimination in the private sector. Those states are California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Iowa, Maine, Maryland, Massachusetts, Minnesota, Nevada, New Hampshire, New Jersey, New Mexico, New York, Oregon, Rhode Island, Utah, Vermont, Washington, and Wisconsin.

Employers in the other states should monitor the momentum carefully.