?The 5th U.S. Circuit Court of Appeals recently ruled that private businesses with religious convictions can be exempt from antidiscrimination laws that protect LGBTQ+ workers.
On June 20, the court ruled in favor of Braidwood Management in Katy, Texas, and Bear Creek Bible Church in Keller, Texas, which sued the U.S. Equal Employment Opportunity Commission (EEOC) for allegedly infringing on their religious liberties.
Braidwood is a management company that employs about 70 workers at Hotze Health & Wellness Center, Hotze Vitamins, and Physicians Preference Pharmacy International. Steven Hotze owns Braidwood and does not permit the company to hire people who exhibit homosexual or gender-nonconforming behavior.
Bear Creek is a nondenominational Christian church that opposes same-sex marriage and also does not hire people who exhibit homosexual or gender-nonconforming behavior, according to court documents.
Braidwood enforces a dress code that disallows gender-nonconforming styles. Braidwood and Bear Creek also require workers’ bathroom usage to be determined “by solely biological sex,” according to court documents.
Both policies violate current EEOC guidance. The two organizations asked the court to affirm their workplace policies and confirm that federal law does not prohibit employers from establishing sex-neutral codes of conduct that effectively exclude LGBTQ+ people from employment.
The EEOC said Braidwood and Bear Creek didn’t have standing to bring the case because no one had sued them for discrimination in workplace policies. However, the two organizations argued that they faced the threat of EEOC enforcement action.
[SHRM Online member-only toolkit: Navigating Religious Beliefs in the Workplace.]
Background
In 2020, the U.S. Supreme Court ruled in Bostock v. Clayton County, Ga. that Title VII of the Civil Rights Act of 1964 prohibits discrimination based on sexual orientation or gender identity. In June 2021, the EEOC released guidance instructing employers to permit LGBTQ employees to use the restrooms and clothing that correspond with their gender identity.
However, religious institutions with employees in ministerial roles, such as pastors and rabbis, do not have to comply with the federal antidiscrimination statutes. This is called the ministerial exception. Other employees at religious institutions, such as janitors or office administrators, don’t qualify under the ministerial exception.
In Braidwood, the circuit court examined how the antidiscrimination provisions in Title VII intersect with the federal Religious Freedom Restoration Act of 1993 (RFRA), which prevents the government from substantially burdening a person’s free exercise of religion.
Under RFRA, the government must demonstrate a “compelling interest in applying its challenged rule to the particular claimant whose sincere exercise of religion is being substantially burdened,” the 5th Circuit said. Furthermore, the government must use the least restrictive method to further its compelling interest.
In this case, the EEOC failed to show a compelling government interest, and forcing Braidwood “to hire and endorse the views of employees with opposing religious and moral views is not the least restrictive means of promoting that interest,” the court said.
However, the court denied a motion to certify a class action in the case, which means the ruling is limited to the individual claims brought by Braidwood and Bear Creek. The court also declined to rule on whether companies can legally enforce sex-specific dress codes, sex-segregated bathroom use and sex-neutral codes of conduct that exclude LGBTQ+ people from employment.
“In Braidwood, the 5th Circuit faced the tough task of reconciling two conflicting laws passed by Congress and deciding which of the two laws would prevail. In this case, the 5th Circuit decided the RFRA prevailed,” said Andrew Burnside, an attorney with Ogletree Deakins in New Orleans.
However, this case “has to be understood as having a very narrow application in the workplace,” he noted. “Braidwood will only apply to nonreligious employers with sincerely held religious beliefs informing their workplace policies. If sincerity is challenged or not established, Title VII’s protections will remain in place. For a religious employer, such as a church or mosque, Title VII’s religious exemption will apply, not RFRA.”
Alyesha Dotson, an attorney with Littler in Seattle, agreed, saying the case “doesn’t necessarily have overarching impact right now. It’s limited to the 5th Circuit. A different circuit might look at it differently.”
Whether a private company qualifies as an organization with sincerely held religious beliefs must be determined on a case-by-case basis. “If this case tells us anything, it’s that it might well be interpreted more broadly,” she said.
Tips for Employers
The Braidwood decision “should not be mistaken as a sign that employers can freely discriminate against individuals based on sexual orientation,” said Katharine Weber, an attorney with Jackson Lewis in Cincinnati. “Rather, it simply shows that Christian employers who cannot comply with the Supreme Court’s interpretation of Title VII post-Bostock without violating their religious beliefs may be able to use RFRA to defend against an EEOC enforcement action.”
Dotson said that before making any policy changes based on the court’s decision, HR should meet with the leadership of their organization and determine what its values are. “Good messaging and informing supervisors why something might be changing … is an essential element of avoiding confusion and potentially avoiding pushback,” she said.
The issue of religious freedoms conflicting with workplace protections for LGBTQ workers is likely to come up in more court cases and legislation in the future, Dotson noted: “I don’t think this is settled by any means.”
Sam Schwartz-Fenwick, an attorney with Seyfarth in Chicago, agreed.
“While Braidwood certainly supports the rights of religious employers not to follow Title VII as it relates to sexual orientation and gender identity, until the Supreme Court or Congress formally addresses this issue, the lower courts will continue to reach different results on this issue,” he said.
