As previewed in the Spring regulatory agenda, the Office of Federal Compliance Contract Programs (OFCCP) has proposed a new rule to clarify aspects of a religious exemption available to federal contractors. In the proposed rule, the agency said it intends to address concerns from religious organizations that ambiguity in the exemption left them reluctant to participate in federal contracts.

The proposed rule was published August 15 in the Federal Register. OFCCP will accept public comments on the rule for 30 days, until September 16, 2019.

The rule would clarify the religious exemption in Executive Order 11246, which includes anti-discrimination obligations for federal contractors. The exemption allows religious organizations to prefer individuals of a particular religion, while still requiring adherence to other anti-discrimination provisions. The rule comes one year after OFCCP issued a Directive reminding its staff to tread lightly when dealing with religious contractors and “proceed in a manner neutral toward and tolerant of . . . religious beliefs.”

As proposed, the rule would clarify that:

• The exemption covers “not just churches but employers that are organized for a religious purpose, hold themselves out to the public as carrying out a religious purpose, and engage in exercise of religion consistent with, and in furtherance of, a religious purpose.”
• Religious employers can condition employment upon acceptance of, or adherence to, a religious tenet, provided that they do not discriminate based on other protected bases.
• Define terms such as “Religion,” “Particular Religion,” and religion “As understood by the employer.”

The rule does not explicitly mention sexual orientation or LGBTQ protections. However, it does cite Masterpiece Cakeshop, the recent U.S. Supreme Court decision involving a business owner’s decision to deny service to gay customers based on the owner’s religious beliefs.  In a news release, OFCCP said it considered that case while drafting the rule, in addition to other Supreme Court cases, statutes, and executive orders.

Today’s proposed rule helps to ensure the civil rights of religious employers are protected,

said Patrick Pizzella, acting U.S. Secretary of Labor.

“As people of faith with deeply held religious beliefs are making decisions on whether to participate in federal contracting, they deserve clear understanding of their obligations and protections under the law.”

The proposed rule also comes at the same time it has been reported by Bloomberg Law that the Department of Justice and EEOC are seemingly taking differing positions on LGBTQ rights before the Supreme Court.

Jackson Lewis will continue to monitor developments related to the proposed rule.