Stephen English, who is heterosexual, says he was called a "faggot" and "Mr Franglais" by fellow members of staff at the blind and awning firm where he worked.
He alleges that the barbs began after a sales manager discovered that he went to boarding school and now lived in the Sussex seaside town, which has a large gay population.
Mr English, who has been married for 20 years and has three teenage children, decided to take legal action after his attendance at Brighton's Gay Pride parade wearing "skin-tight Lycra cycling shorts" was mentioned in the Thomas Sanderson Blinds in-house magazine.
His lawyers told the Court of Appeal that Mr English had tried to ignore the innuendos but "over the passage of several years he found it increasingly upsetting."
The court must now decide whether EU employment law designed to outlaw bias on the grounds of sexual orientation covers homophobic abuse of a man whose colleagues knew he was heterosexual.
Mr English's case, which is funded by the Equality and Human Rights Commission, was referred to the Court of Appeal by the Employment Appeal Tribunal, which said that Britain's failure to properly enforce EU employment laws created an "unsatisfactory state of affairs".
Thomas Sanderson denies any wrongdoing.
