As Paul Secunda (Workplace Prof Blog) points out, the First and Ninth Circuit’s have an important effect beyond “Don’t Ask, Don’t Tell”: Because they hold that Lawrence v. Texas recognizes a right to sexual autonomy (subject to a balancing test), they mean that government employers’ discrimination against gays, lesbians, people engaged in premarital sex, and possibly even adulterers (though that’s not clear) would also be subject to constitutional challenge.
The government may be able to justify such discrimination, if it can show that the employee’s or applicant’s sexual activity seemed likely to sufficiently interfere with the government employer’s operations. (After all, such restrictions are allowed even as to expressly secured rights, such as the freedom of speech.) But it would now have to justify such discrimination — at least in the First and Ninth Circuits — rather than having a free hand to discriminate based on sexual conduct.