As we reported last week, in light of three Supreme Court cases addressing religious freedoms, OFCCP has issued a new Directive 2018-3 and a press release regarding “religion-exercising” organizations and individuals. The Directive cites three recent Supreme Court cases as well as Executive Orders issued by President Trump. With respect to the court cases, the Directive notes:

Recent court decisions have addressed the broad freedoms and anti-discrimination protections that must be afforded religion-exercising organizations and individuals under the United States Constitution and federal law.

The Directive also acknowledges

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

The Directive notes federal contractors and subcontractors have non –discrimination obligations as set forth in Executive Order 11246, which include prohibitions on discrimination on the basis of religion as well as sexual orientation and gender identity. The Directive also reiterates a religious exemption contained in the Order that exempts certain contractors and sub-contractors from compliance with this section of the Executive Order. The religious exemption is limited to “a religious corporation, association, educational institution, or society, with respect to the employment of individuals of a particular religion to perform work connected with the carrying on of such [entity’s] activities.” 41 C.F.R. § 60-1.5(a)(5).

The Directive neither overturns President Obama’s Executive Order, which expanded Executive Order 11246 and its regulations to cover “sexual orientation” or “gender identity,” nor directly expands the religious exemption in the Order and regulations. Additionally, EEOC has taken the position that Title VII offers protection on the basis of gender identity and sexual orientation.

However, the Directive states it “supersedes” the Frequently Asked Questions regarding the religious freedom exemption to the extent they are inconsistent with these Supreme Court cases and President Trump’s Executive Orders. Thus, the Directive essentially modifies the FAQ guidance and instructs OFCCP to account for these legal developments in its enforcement and other efforts. Specifically, the Directive states OFCCP staff “should bear in mind” that:

• They “cannot act in a manner that passes judgment upon or presupposes the illegitimacy of religious beliefs and practices” and must “proceed in a manner neutral toward and tolerant of … religious beliefs.”
• They cannot “condition the availability of [opportunities] upon a recipient’s willingness to surrender his [or her] religiously impelled status.”
• “[A] federal regulation’s restriction on the activities of a for-profit closely held corporation must comply with [the Religious Freedom Restoration Act].”
• They must permit “faith-based and community organizations, to the fullest opportunity permitted by law, to compete on a level playing field for … [Federal] contracts.”6
• They must respect the right of “religious people and institutions … to practice their faith without fear of discrimination or retaliation by the Federal Government.”

What Does This Mean for Contractors?

It would seem contractors are caught in a difficult situation. However, it’s important to keep in mind OFCCP’s FAQs and Directives are guidance documents that do not have the same authority as Executive Orders or the regulations.  The Directive states that OFCCP may pursue regulatory modifications to implement these cases. Until then, contractors should continue to comply with the regulations prohibiting discrimination on the basis of “sexual orientation” and “gender identity” as they have been, unless the contractor has a specific need to apply the principles of these Supreme Court cases to a particular situation.