PHILADELPHIA—A gay man is not necessarily barred from filing a sex discrimination claim under Title VII of the Civil Rights Act of 1964, even if there is no federal law banning discrimination based on sexual orientation per se, a federal appeals court has ruled.

According to the Friday decision by the 3rd U.S. Circuit Court of Appeals in Philadelphia in Brian D. Prowel vs. Wise Business Forms Inc., Mr. Prowel was told when he was terminated from his job at Butler, Pa.-based Wise after 13 years that it was because of a lack of work. He had operated a nale encoder, which is a machine that encodes numbers and organizes business forms.

Mr. Prowel, who is homosexual, contended he was the victim of sex discrimination and retaliation. Unlike the “genuine stereotypical male” at his plant, he said he “had a high voice and did not curse; was very well-groomed; wore what others would consider dressy clothes; was neat” and “filed his nails instead of ripping them off with a utility knife,” among other characteristics. He said he was called “princess,” “rosebud” and “faggot” by his co-workers, among other incidents. He said he was terminated several months after his employer learned he had asked co-workers to testify on his behalf in a lawsuit against the company.

In its decision that overturned a lower court ruling dismissing the case, the unanimous three-judge panel said Congress has rejected legislation that would have extended Title VII to cover sexual orientation. “This does not mean, however, that a homosexual individual is barred from bringing a sex discrimination claim under Title VII, which plainly prohibits discrimination ‘because of sex,’” the court said.

“The line between sexual orientation discrimination and discrimination ‘because of sex’ can be difficult to draw,” and the record here “is ambiguous on this dispositive question. Accordingly, Prowel’s gender stereotyping claim must be submitted to a jury,” the court ruled.

When the facts “are considered in the light most favorable to Prowel, they constitute sufficient evidence of gender stereotyping harassment—namely, Prowel was harassed because he did not conform to Wise’s vision of how a man should look, speak and act—rather than harassment based solely on his sexual orientation,” said the court, which remanded the case for further proceedings.

The court did, however, uphold the lower court’s dismissal of Mr. Prowel’s religious discrimination claim. It said Mr. Prowel, who said he had received anonymous prayer notes among other incidents, failed to show he had been intentionally harassed because of religion.

Mr. Prowel’s attorney, Katie R. Eyer, an associate with Salmanson Goldshaw P.C. in Philadelphia, said the decision will be “highly significant and influential.”

Wise’s attorney, Kurt A. Miller, a partner with Thorp Reed & Armstrong L.L.P. in Pittsburgh, had no comment.