How Not to Protect Religious Freedom: The Strange Case of the Department of Labor’s Proposed Rule on the Religious Exemption

By Richard T. Foltin

A proposed rule issued by the Office of Federal Contractor Compliance Programs (OFCCP) of the U.S. Department of Labor, slated soon to be issued in its final form, has been billed by the administration as an enhancement of religious freedom. But, in fact, the rule would diminish protections of employees’ religious freedom and civil rights.

On Sept. 24, 1965, building on actions taken by previous chief executives, President Lyndon B. Johnson signed Executive Order (EO) 11246, which established requirements for non-discriminatory practices in hiring and employment on the part of U.S. government contractors. As subsequently amended, the order prohibits discrimination by federal contractors based on race, color, religion, sex, sexual orientation, gender identity or national origin. OFCCP is the agency responsible for assuring that federal contractors comply with these non-discrimination obligations.

In December 2002, President George W. Bush amended EO 11246 to allow an exemption for contracting religious organizations that permits them to discriminate “with respect to the employment of individuals of a particular religion to perform work connected with the carrying on by such corporation, association, educational institution or society of its activities.” This latter language closely tracks the religious exemption provision of Title VII of the Civil Rights Act of 1964 (the section of the Civil Rights Act dealing with employment discrimination). And, following the fashion in which Title VII has been applied, the exemption does not excuse contractors from complying with the other requirements of EO 11246, even on the basis of religious belief.

Adoption of the Bush amendment was not without controversy. Rather, it raised concerns over whether or not faith-based organizations that are awarded government contracts should be allowed to engage in religious discrimination, notwithstanding that these organizations would otherwise have the benefit of Title VII’s religious exemption. In contrast, proponents of the amendment maintained that the need to protect the autonomy of religious organizations with Title VII religious exemptions isn’t diminished simply because those organizations are government contractors.

At first glance, debate over the Bush amendment parallels debate over whether or not faith-based organizations that receive government grants to provide social services should have the benefit of religious exemptions from anti-employment discrimination provisions covering those grants. That parallel between federal contractors and grantees is complicated, however, by two key differences between government contracts and government grants, each of which alters the calculation in a different direction. On the one hand, the contractual relationship is more likely to be ongoing and intertwined with government in contrast to what may be a one-off grant, leading to the conclusion that it is more problematic to provide religious contractors with religious exemptions. On the other hand, the provisions of EO 11246 have more sweeping implications for religious contractors in that the executive order’s antidiscrimination provisions apply to the entire organization, not just, as is the case with many grants, the project for which funding is provided.

Whatever the merits of the underlying Bush amendment, the proposed rule constitutes a broad and ill-advised expansion — in the name of protecting religious freedom “to the maximum extent permitted” — of the fashion in which the Bush amendment has been applied[1]:

• The proposed rule cannot actually change EO 11246; that would require another executive order. So in theory, workers remain entitled to the full protections EO 11246 provides (i.e., even an employer entitled to invoke the religious exemption cannot, by claiming a religious basis for doing so, engage in discrimination directed at members of another protected category). Nevertheless, through the manner in which it expands the scope and availability of the religious exemption, the proposed rule raises real questions regarding the extent to which employees of federal contractors will be adequately protected from religious discrimination, as well as from other forms of discrimination, most notably when discrimination is directed at LGBTQ people. The proposed rule is, in essence, an initiative about protecting the prerogatives of employers at the expense of employees;
• The term “religious corporation, association, educational institution or society” is newly defined to encompass significantly more employers than under Title VII case law or the current EO 11246 — notwithstanding that OFCCP acknowledges that the religious exemption in EO 11246 should be understood to have the same meaning as in Title VII. Under the proposed rule, federal contractors would be able to invoke the exemption so long as they can pinpoint a religious purpose that is a public part of their mission and demonstrate that they engage in religious exercise to further that purpose. This interpretation, which allows for-profit corporations and nominally religious entities to claim the religious exemption, is without basis in Title VII case law, sends the wrong message to employers and may put employers at risk of civil rights lawsuits under federal and state law, even as they retain their status as federal contractors;
• Even as the proposed rule purports to interpret EO 11246’s limitation of the religious exemption to allow a newly broadened category of organizations to prefer members of a particular faith, it adopts a more lenient standard for evaluating whether or not a claim of employment discrimination is based on religion or on another protected category. This makes it more difficult for employees to challenge discrimination on the grounds that religion has been used as a pretext for discrimination on other bases. Further, by incorporating a test that is more lenient for employers, the proposed rule signals to employers that so long as they can articulate what looks like a legitimate non-discriminatory basis for an otherwise discriminatory decision, they will be able to retain their federal contracts — a situation with particularly dire implications for LGBTQ people;
• The proposed rule misappropriates the Title VII definition of “religion,” intended to protect workers against religious discrimination, enabling companies to discriminate against employees. Title VII defines religion broadly to protect both the beliefs and practices of employees and to require employers to provide religious accommodations. Unfortunately, and perversely, the proposed rule would use this definition of religion to protect employers, not their workers, by granting a wide range of employers who contract with the federal government broad authority to engage in discriminatory practices on the basis of religion against their employees. In one notable case, an employer was found to have violated Title VII when it required its employees to attend prayer services over their objections. Because it would allow for-profit or nominally religious employers to make employment decisions on the basis of religion, the proposed rule could open the door for employers to require employees to participate in such prayer services or Bible studies, i.e., the religious practice of the employer. At the least, the proposed rule would set up a conflict as to the applicable law on this issue;
• The proposed rule relies on an exaggerated claim that OFCCP cannot even inquire about whether or not an employer’s assertion that it has made an employment decision on the basis of religion was instead an act of discrimination on the basis of race, color, national origin or sex, including sexual orientation or gender identity. While the government must avoid taking sides on questions of religious doctrine, it is not prohibited from deciding what is and is not “religion” for purposes of deciding when religious freedom protections come into play. The proposed rule’s approach undermines the very structure of the protections of religious freedom that are part of the Constitution and federal and state statutes.

In sum, OFCCP’s proposed rule’s harmful and unnecessary expansion of the existing religious exemption for employers endangers the religious freedom and civil rights of employees across the nation. Hopefully, OFCCP will take heed of the many comments urging that it reject the proposal.

[1] The following points draw on comments filed by the American Bar Association (ABA), opposing adoption of the proposed rule. The ABA was one of thousands of organizations and individuals to weigh in, pro and con. The author played a role in drafting the ABA’s comments.

Richard T. Foltin is a senior scholar of the Religious Freedom Center of the Freedom Forum Institute. Contact him via email at rfoltin@gmail.com, or follow him on Twitter at @rfoltin.