Employment discrimination entails any discrimination based on race, gender, national origin, religion, or any other traditionally protected characteristic that is unrelated to a "bona fide occupational characteristic". It should be noted that it is not illegal to discriminate based on these characteristics per se, but rather only when they are unrelated to a legitimate job function. For example, while racial discrimination is generally illegal, a movie producer could refuse to hire an African American actor if the role in consideration is a white character, or of the opposite sex, etc.

Title VII of the Civil Rights Act of 1964 forbids employment discrimination in all workplace settings. This applies to all "terms and conditions" of employment, ranging from the hiring and interviewing process, all the way through retention, promotion, dismissal, and retirement. Retaliation against employees who allege employment discrimination under the act, or against employees who encourage allegations or participate in the subsequent investigation, is also illegal. Currently, Title VII does not prohibit employment discrimination based on sexual orientation, but many states have enacted their own laws which do.

Sexual harassment is any behavior that subjects another worker to unwelcomed sexual contact, invitations, or innuendo. Any harassment that creates a hostile work environment, or a quid pro quo situation (in which an employee is threatened with negative employment consequences for refusing sexual advances, or offered additional benefits for accepting them) is considered a form of employment discrimination that violates Title VII. Any employee who experiences sexual harassment in the workplace is entitled to damages from the harasser themselves, as well as the company if it fails to put a stop to the harassment or take reasonable steps to prevent it.