The 2-to-1 decision by a U.S. Court of Appeals panel in San Francisco has little effect in California, where state law forbids job discrimination or harassment based on sexual orientation.

But only 10 other states and the District of Columbia have such laws, and some of those offer limited remedies. Nevada, where yesterday's case arose, banned job discrimination against gays and lesbians in 1999, but victims can sue only for back pay and no other damages, said the plaintiff's lawyer in the case.

Gay rights advocates have been trying to persuade Congress to pass an anti- discrimination law for 20 years and have little hope of immediate success in light of President Bush's stated opposition. But the U.S. Supreme Court has allowed suits for same-sex harassment, in some circumstances, as a form of discrimination based on gender -- the issue in yesterday's case.

Medina Rene, a gay man who worked as a butler at the MGM Grand Hotel in Las Vegas, said his supervisor and co-workers, all of them men, subjected him to crude harassment on nearly every workday between February 1994 and February 1996.

He said they grabbed his crotch, poked him, made him look at pictures of naked men having sex, whistled and blew kisses at him and called him "sweetheart," among other things. Rene said he complained to higher-ups to no avail.

After leaving the job, Rene sued the hotel in 1997 under a section of the federal Civil Rights Act that provides damages of up to $300,000 for employment discrimination based on sex.

A year later, the Supreme Court ruled in a separate case that the law applied to some instances of same-sex harassment: if, for example, it was motivated by sexual desire or sexual hostility, or if the harasser treated men and women differently. The San Francisco-based appeals court, which oversees federal courts in nine Western states, has also ruled that abuse of an employee for failing to fit sexual stereotypes is sex discrimination.

But in upholding a federal judge's dismissal of Rene's suit, the appellate panel said his claim that he was harassed solely because of his sexual orientation is not covered by federal law.

"The degrading and humiliating treatment Rene contends that he received from his fellow workers is appalling," said the majority opinion by Chief Judge Procter Hug. "However, this type of discrimination, based on sexual orientation, does not fall within the prohibitions" of the ban on sex discrimination.

Dissenting Judge Dorothy Nelson argued that same-sex harassment amounts to sex discrimination "when the abuse is physical and sexual." The effect of the alleged attacks was "to humiliate Rene as a man," and the motives, gender or sexual orientation of his assailants should not affect his ability to sue, Nelson said.

Rene's lawyer, Richard Segerblom, said he would ask the full court for a rehearing, arguing that his client was the victim of sexual assaults that should be considered sex harassment.

©2001 San Francisco Chronicle

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