In August, OFCCP issued a proposed new rule to clarify aspects of a religious exemption available to federal contractors.  According to OFCCP, the rule is intended to provide clarity regarding the scope and application of the existing religious exemption consistent with the evolving landscape of religious freedom- based legal developments, including Masterpiece Cakeshop, Ltd. v. Colo. Civil Rights Comm’n, 138 S. Ct. 1719, 1731 (2018), Trinity Lutheran Church of Columbia, Inc. v. Comer, 137 S. Ct. 2012, 2022 (2017), Burwell v. Hobby Lobby Stores, Inc., 134 S. Ct. 2751, 2775 (2014), Hosanna-Tabor Evangelical Lutheran Church & Sch. v. EEOC, 565 U.S. 171, 196 (2012). OFCCP stated the holdings of these recent Supreme Court decisions

have reminded the federal government of its duty to protect religious exercise – and not to impede it.

During the recent public comment period, OFCCP received  more than 100,000 comments on the proposed rule, including comments from industry groups and the United States Senate Committee on Health, Education, Labor, and Pensions.  As might be expected, comments both support the additional religious protections and voice concerns regarding its appropriateness and certainty of application.  The most developed criticisms of OFCCP’s proposed new rule focus on the potential expansion of applicability and the proof standard required to show unlawful discrimination.

Who does the proposed rule cover?

Under the proposed rule, any contractor that is “organized for a religious purpose” (even if it is not the contractor’s only purpose), holds itself out to the public as carrying out a religious purpose (even if the employer only does so in response to an inquiry from OFCCP), and “exercises religion consistent with, and in furtherance of, a religious purpose” can claim the proposed religious exemption.  According to critics, this is a burdensome, fact intensive, and complicated legal analyses of areas of law with which judges often struggle.  Yet, OFCCP’s proposed rule would charge field personnel with such nuanced assessments.

Critics also point out that this test goes beyond the current Supreme Court precedent on the interplay between the (potentially competing) Constitutional rights of (1) free exercise of religion and (2) to be free from discrimination.  Once commentator suggested that OFCCP should delay any new rule on a religious exemption until the Supreme Court decides three cases this term that address whether sexual orientation and gender identity are protected classes under Title VII.

However, advocates cite to the many “critical services” provided by faith-based organizations, such as aid for the homeless and victims of abuse and praise the proposed rule’s efforts to level the playing field and increase participation in essential sectors of American life. Others point to freedom of religion as “America’s backbone,” and commend the commitment to allow employers to operate their businesses consistent with sincerely held religious tenets.  Still others simply “appreciate the clarity” of the exemption.

How would OFCCP establish unlawful discrimination?

Currently, any employment decision in which discrimination is “a motivating factor” is prohibited.  But under the new rule, OFCCP would have to establish that discrimination on a protected basis other than religion was the “but for” cause of the employment action.  According to critics, this distinction would make it substantially more difficult to establish that employment discrimination occurred and would enable employers claiming the exemption to use religion as a pretext for unlawful decisions.

What would the new rule protect?

Comments also requested additional clarity on the scope of the exemption.  The OFCCP expressed in the proposed rule’s executive summary that many faith-based organizations have apparently been reluctant to, or historically entirely refrained from, contracting with the federal government out of concern surrounding uncertainty of the scope of the existing exemption. As discussed above, the revised language is intended to capture employers well beyond houses of worship in an effort to encourage participation in their respective industries.

While much of the ire drawn by the proposed rule is the risk at which it places protection due to sexual orientation and gender identity at risk, its impact may not end there.  For example, the National Industry Liaison Group asks:

[W]ill it permit allegedly ‘illegal’ questions during an interview process and allow an employer to decline to hire a woman who has been divorced, had an abortion, or is living with another in an unmarried state?  In the normal operation of a business, will a male be promoted over a female because males in the organization refuse to be alone with the female for training and mentoring purposes, denying females developmental opportunities?  Simply stated, will ‘sincerely’ held religious beliefs overcome anti-discrimination protections afforded female employees?

*             *             *

The public is divided on the issue, and some serious questions remain.  The ball is back in OFCCP’s court to consider this swell of public feedback.  When it does, we’ll keep you posted.