Cleanaway was last week ordered to pay £35,000 damages to gay employee Robert Whitfield after his bosses taunted him over his sexuality until he quit.
The waste management firm was found guilty of constructive dismissal and unlawful harassment on grounds of sexual orientation.
Whitfield was reportedly the first person to win a case under the new Employment Equality (Sexual Orientation) Act.
And gay rights organisation Stonewall believes the high-profile case was just the tip of the iceberg.
"Many companies are at risk of such legal action," said Stonewall director of public affairs Alan Wardle. "Awareness of the law is low so there is quite a lot of work to be done. Unless employers get their houses in order, such cases will continue to be brought."
Stonewall last month produced a list of its Top 100 Employers for gay rights - and believes it did not include a single waste firm.
There are an estimated 1.7 million gay people in the UK workforce yet firms are often ignorant of how the law requires them to treat these people.
Cleanaway's human resources department was found by the tribunal to have been understaffed, acted inappropriately at times and to have given "muddled evidence".
But it is easy to get confused by the deluge of employment law that has flooded the UK in the past few years, according to Denton Wilde Sapte partner Pauline McArdle.
"The recent avalanche of new employment legislation has created a complex regime of regulation which can leave the unwary employer exposed to expensive claims," she said.
"The law now protects employees against discrimination on grounds of sex, race, disability, sexual orientation and religion or belief. Legislation covers all stages of the employment relationship, including job applications, contractual terms, employment, termination and post-employment duties such as the giving of references.
"Employers will be liable for any discriminatory policies they operate - for example, unequal pay for men and women or refusal to employ pregnant women - and vicariously liable for the actions of their employees, such as with harassment. Lengthy campaigns of harassment, whether on grounds of sex, race, sexual orientation, disability, religion or belief, can give rise to expensive claims for injury to feelings and financial loss.
"An employer's lack of knowledge of the harassment is no defence. Employers should provide a harassment-free workplace and make employees aware of their responsibilities."
McArdle added that not all discrimination is based on overt treatment. Indirect discrimination is also outlawed. For example, a woman returning from maternity leave may wish to reduce her hours. Unless an employer can justify why the job needs to be done on a full-time basis, a refusal to allow part-time working can be indirect sex discrimination.
"Victimisation is also unlawful. An employee who has in the past complained of discrimination, or assisted another in making a complaint, cannot be treated unfairly as a result of bringing that claim.
"Dismissing employees can also be tricky, particularly since new statutory procedures were introduced in October 2004. These apply to most dismissals and require a written statement, a meeting and an appeal before a dismissal can be effected.
"If they are not followed, a