DOL Proposes New Rule on Discrimination by Religious Organizations

The Department of Labor's Office of Federal Compliance Programs announced today that it will be issuing a proposed rule tomorrow on discrimination by religious organizations. The OFCCP enforces antidiscrimination rules (pursuant to Executive Order 11246) against federal contractors and has more affirmative power, by, for example doing audits, than the EEOC. 

The proposed rule will come as no surprise to those who have had a chance to keep up with things like the DOJ's memo on religious liberty, issued in late 2017, or the DOJ's positions on whether Title VII prohibits discrimination on the basis of sexual orientation and gender identity. The proposed rule currently posted addresses a number of things related to religious organizations.

First, it makes clear that religious organizations can discriminate on the basis of religion and that religion is not just belief but also religious practices. So religious organizations can require employees to conform their behavior to the organization's religiously motivated rules. In defining religion, the proposed rule draws on Title VII and adopts definitions from the Religious Freedom Restoration Act and Religious Land Use and Institutionalized Persons Act.

Second, it defines what counts as a "religious corporation, association, educational institution, or society." The key changes are to what counts as a religious corporation. The EEOC's guidance has long provided that for-profit entities cannot be religious organizations for purposes of Title VII, taking the definition from court decisions. The proposed rule removes that limitation, citing the Hobby Lobby case and suggesting that Hobby Lobby would be considered a religious corporation--despite the fact that the question in Hobby Lobby was whether corporations were persons for purposes of the Religious Freedom Restoration Act. Title VII does not use "person," so the logic does not necessarily apply. Now, a religious organization will be any entity including a for-profit corporation that:

1. is organized for a religious purpose;
2. holds itself out to the public as carrying out a religious purpose; and
3. exercises religion consistent with and in furtherance of a religious purpose.

One limitation in the proposed rule is this sentence: "With that said, OFCCP does not see a scenario in which an entity’s single religiously motivated employment action, standing alone, would be sufficient to satisfy [the third] element of the definition, if that were the only religiously motivated action the entity could identify. "

The proposed rule states that this does not allow federal contractors to discriminate on bases other than religion, but then says "where a contractor that is entitled to the religious exemption claims that its challenged employment action was based on religion, OFCCP will find a violation of Executive Order 11246 only if it can prove by a preponderance of the evidence that a protected characteristic other than religion was a but-for cause of the adverse action," citing Nassar and Gross.

This certainly tees up conflicts with protection against sex discrimination versus religious beliefs of employers, particularly when it comes to pregnancy and sexual minorities.

MM