KHVPF Insight

Employee LGBT Rights v. Employer Religious Rights

Employee LGBT Rights v. Employer Religious Rights

Two legal trends are colliding at the U.S. Supreme Court. For decades, claims of religious freedom that have made it to the High Court have prevailed in every case but one. See, Trump v. Hawaii, 138 S.Ct. 2392 (2018) (rejecting claim that banning travel from mostly predominant Muslim-populated countries violates religious freedom). Over this time, the Supreme Court has expanded government funding of religious organizations, see, e.g., Carson v. Makin, 142 S.Ct. 1987 (2022) (holding Maine had a mandatory obligation to fund religious education), enlarged the freedom to express religion, see, e.g., Kennedy v. Bremerton School District, 142 S.Ct. 2407 (2022) (holding high school football coach had right to pray at the 50-yard line following each game), and suggested that the protection of religious liberty demands broad exemptions from neutral laws that infringe on religious beliefs, see, e.g., Fulton v. City of Philadelphia, 141 S.Ct. 1868 (2021) (five justices called for applying a heightened standard of review).

Over the same time, the Supreme Court has consistently recognized and expanded LGBT rights. During his 30-year tenure on the Court, Justice Anthony Kennedy wrote several landmark decisions that recognized sexual orientation as a constitutionally protected class, Romer v. Evans, 517 U.S. 620 (1996) (holding gays and lesbians are protected by the Equal Protection Clause), struck down state laws that criminalized same-sex consensual sexual conduct, Lawrence v. Texas, 539 U.S. 558 (2003) (ruling Texas’s so-called “sodomy” criminal law unconstitutional), and held unconstitutional a federal law that defined marriage as a “legal union between one man and one woman,” United States v. Windsor, 570 U.S. 744 (2013) (holding the Defense of Marriage Act unconstitutional).

In the first LGBT rights case after Justice Kennedy’s retirement, the Court, in Bostock v. Clayton County, 140 S.Ct. 1731 (2020), expanded the protections of Title VII of the 1964 Civil Rights Act to LGBT employees—holding it is impossible to discriminate against someone because of their sexual orientation or gender identity without discriminating against them based on sex. Most recently, the Michigan Supreme Court, in Rouch World v. Dep’t of Civil Rights, Docket No. 162482, 2022 WL 3007805 (Mich. July 28, 2022), adopted Bostock’s reasoning and held that the Elliott-Larsen Civil Rights Act also prohibits discrimination based on sexual orientation.
The tension inherent in these cases has been recognized by the U.S. Supreme Court. Lately, when the Court has ruled in favor of one group, it had made a point to note the legitimacy of the other. In finding a constitutional right to same-sex marriage, for instance, the Court praised religious communities that continue to teach the “principles that are so fulfilling and so central to their lives and faiths.” Obergefell v. Hodges, 576 U.S. 644, 679 (2015). When the Court ruled that a state agency violated the constitutional rights of a business owner by showing hostility toward his religious objection to LGBT rights, it also noted how “our society has come to the recognition that gay persons and gay couples cannot be treated as social outcasts or as inferior in dignity and worth.” Masterpiece Cakeshop v. Colorado Civ. Rights Comm’n, 138 S.Ct. 1719, 1727 (2018). And in Bostock, the Court stressed it was “deeply concerned” about the religious rights of “some employers” and said those rights might “supersede Title VII’s commands in appropriate cases.” 140 S.Ct. at 1753-4.

Today, two cases are making their way through the federal courts that directly confront employers’ claims of religious liberty with Bostock’s central holding that Title VII protects LGBT individuals from discrimination. In Braidwood Mgt. v. EEOC, 571 F.Supp.3d 571 (N.D. Tex. 2021), the Northern District of Texas held that a Christian-owned for-profit business was exempt from Title VII’s prohibition of LGBT discrimination under the Religious Freedom Restoration Act, 42 U.S.C. § 2000bb, and the First Amendment. And in Billard v. Charlotte Catholic High School, Case No. 3:17-cv-00011, 2021 WL 4037431 (W.D.N.C. Sept. 3, 2021), the Western District of North Carolina came to the opposite conclusion, holding that a Catholic school violated Title VII by terminating the employment of a gay teacher who publicly announced his intention to marry.

This article gives a brief overview of the religion-based defenses employers are raising in these cases. It then explains the facts, trial court rulings, and pending appeals in the two cases. It concludes by identifying questions that must be addressed by the U.S. Supreme Court to bring clarity to this colliding area of the law.

An Employer’s “Religious” Defenses

In addition to the normal defenses available in any employment discrimination case, religious employers accused of LGBT discrimination are raising defenses based on their religious beliefs. Here are four examples:

Title VII’s Religious Exemptions. Sections 702(a) and 703(e) of Title VII exempt certain religious organizations from Title VII lawsuits. 42 U.S.C. §§ 2000e-1(a), 2000e-2(e). These provisions, however, exempt religious organizations from only religious discrimination; the provisions merely allow a religious organization to employ members of their own religion without fear of being sued. See, e.g., Boyd v. Harding Academy of Memphis, Inc., 88 F.3d 410 (6th Cir. 1996).
Employers, however, are arguing that courts should take an expansive reading of what constitutes a religious organization under these provisions. They also argue that since their issues with the LGBT community are based in their religious tenets, terminating the employment of someone who, for instance, marries someone of the same sex should be thought of as religious discrimination, not sex discrimination like Bostock commands.

The courts to consider these arguments have rejected them. Even if the arguments were to prevail, Michigan’s religious employers would still be prohibited from LGBT discrimination. ELCRA does not contain religious exemptions like Title VII’s. It thus would still be illegal, under Rouch World, for a religious employer to discriminate against an LGBT employee.

Church Autonomy Doctrine. The U.S. Supreme Court has recognized that the First Amendment’s Establishment Clause prohibits excessive government entanglement with religion, and that the Free Exercise Clause protects a religious organization’s right to decide important matters of faith, governance, and religious doctrine. Accordingly, in some cases, a church or other religious entity has autonomy from defending against legal claims relating to employment decisions.
The ministerial exemption is one example. If an employee qualifies as a “minister,” then the employer is exempt from Title VII and ELCRA liability for employment decisions related to that individual. See, e.g., Our Lady of Guadalupe Sch. v. Morrissey-Berry, 140 S.Ct. 2049 (2020). The church autonomy doctrine and ministerial exemption, however, do not shield employers from Title VII or ELCRA liability for employment claims by employees other than ministers.

The Religious Freedom Restoration Act. RFRA was passed by Congress in reaction to the Court’s decision in Employment Division v. Smith, 494 U.S. 872 (1990). In Smith, the Court upheld the state’s denial of unemployment benefits to a person who was fired for using peyote, even though the use of the drug was part of a religious ritual. The Smith Court created the rule that a facially neutral law—like the peyote ban—could never violate the First Amendment’s Free Exercise Clause no matter how much the law burdened religious exercise.

Fearing how Smith might limit other religious practices, Congress passed RFRA to bolster religious liberty protections. RFRA essentially operates as a “super statute” over all federal government actions that infringe on religious rights. Under RFRA, if a court finds that a law “substantially burdens” a party’s sincerely held religious belief, the party is entitled to an exception from the law unless the government can satisfy strict scrutiny—i.e., the government must show the law has a compelling interest and is the least restrictive means of furthering that interest.

The Supreme Court has held that closely held for-profit corporations are “persons” entitled to the protections of RFRA. See, Burwell v. Hobby Lobby Stores, 573 U.S. 682 (2014) (holding closely held corporations are entitled to a religious exemption from the Affordable Care Act’s contraception requirements). In other words, if a federal law or regulation has a substantial impact on a corporation’s owner’s religious beliefs, the corporation is entitled to an exemption unless the government satisfies strict scrutiny.

For-profit employers are now arguing their religious beliefs are substantially burdened by Bostock’s interpretation of Title VII. To defeat this claim, the federal government must show that Title VII serves a compelling interest and it is the least restrictive means of meeting that interest. If the government fails to make that showing, RFRA entitles employers to a religious exemption from Title VII. But RFRA does not apply to state laws and regulations. See, City of Boerne v. Flores, 521 U.S. 507 (1997). So even if employers have an exemption under RFRA, Michigan employers would still be prohibited from discriminating against LGBT employees under Rouch World’s interpretation of ELCRA.

First Amendment. Employers finally make a series of arguments that their First Amendment rights are violated by Bostock’s interpretation of Title VII. These arguments take several forms. They claim, for instance, that Title VII discriminates against religious employers, because the statute contains several “secular” exemptions but not an exemption for religious beliefs opposed to LGBT rights. They also claim they have a constitutional right not to be associated with LGBT individuals that engage in conduct that is contrary to their expressive interests. And they claim the prohibition against LGBT discrimination violates their right to freely exercise their religious beliefs through the operation of their businesses.

If employers were to succeed at having one of these constitutional rights recognized, it would likely prevent enforcement of Bostock, Rouch World, and possibly other parts of Title VII and ELCRA against these religious employers. Of the two employment cases decided in the district courts so far, one has found Title VII imposes a RFRA and First Amendment violation against religious employers and the other has not.

The Current Pending Cases

In Braidwood Mgt. v. EEOC a for-profit business brought a class action lawsuit seeking a declaratory judgment that all “religious employers” nationwide were entitled to a religious exemption from Title VII. Braidwood employs 70 employees across a health and wellness center, a vitamin business, and a pharmacy. Its sole owner is a devout Christian who does not allow Braidwood to employ LGBT individuals because he believes to do so would make him “complicit in sin.” Braidwood’s lawsuit was filed to protect religious employers’ “ability to require their employees [to] live by the teachings of the Bible on matters of sexuality and gender.” Braidwood sued the EEOC seeking a declaration that the First Amendment and RFRA gave it and all similarly situated religious businesses the right to operate their businesses “in accordance with their sincerely held religious beliefs that homosexual behavior is immoral.”

In November 2021, Judge Reed O’Connor, a George W. Bush appointee to the Northern District of Texas, certified Braidwood’s class of religious employers and granted, in part, Braidwood’s motion for summary judgment. The court held that (1) RFRA compels a religious exemption to Title VII for religious employers as it relates to LGBT discrimination, and (2) Title VII violates the First Amendment’s Free Exercise Clause and Freedom of Association doctrine.

The first step in the District Court’s analysis was to determine whether strict scrutiny applied to the legal issues. The court determined it did for three separate reasons. First, the court found RFRA applied because Title VII, as interpreted in Bostock, “substantially burdened” Braidwood’s and similar employers’ religious exercise—the owners were “required to choose between two untenable alternatives: either (1) violate Title VII and obey their convictions or (2) obey Title VII and violate their convictions.” Second, the court found that Title VII was not a religiously neutral law because it allowed “secular” exemptions but not “religious” exemptions. Third, the court held that Braidwood was engaged in “overt expression regarding its religious views of homosexuality and transgender behavior” and therefore had the constitutional right not to associate with LGBT individuals.

These rulings, the court reasoned, meant that Braidwood was entitled to an exemption from Title VII unless the EEOC could show Title VII serves a compelling interest and was the least restrictive means to achieve that interest. The EEOC argued that Title VII’s compelling interest was to eradicate workplace discrimination. The court found this to be an “overly broad formulation” that was “undercut” by Title VII’s “secular” exemptions.

To the court, “preventing all forms of discrimination” simply could not be the goal of Title VII, because the statute allows employers to discriminate if they employ less than 15 employees (§ 2000e), if the employee is a member of the Communist Party (§ 2000e-2(f)), or in favor of Native Americans if the employer is on or near an Indian reservation (§ 2000e-2(i)). The court questioned how these exemptions with “secular” purposes met Title VII’s goal, but an exemption with a “religious” purpose did not. The court held the EEOC failed to offer a satisfactory answer to this question and hence ruled that Title VII violated RFRA and the First Amendment.

On January 12, 2022, the District Court enjoined the EEOC from enforcing Title VII against Braidwood and similar for-profit religious employers in a manner that limits their right to establish employment policies in accordance with their sincerely held religious beliefs. The EEOC has appealed the ruling to the Fifth Circuit.

In Billard v. Charlotte Catholic High School the plaintiff, a gay man, was a former teacher at a Catholic school in North Carolina. For 12 years, the plaintiff taught English and drama classes on a full-time basis. When he retired, he stayed on as a part-time substitute English teacher. There was evidence in the record that the school had known for several years about the plaintiff’s sexual orientation and his long-term romantic relationship with his partner.
Although the plaintiff taught at a Catholic school, the school discouraged teachers from instructing

students on religious matters. And the school did not require its teachers to undergo religious training or even be Catholic or Christian. But teachers were expected not to publicly engage in conduct or advocacy that contradicts the moral tenets of the Catholic Church—including the Church’s belief that marriage should be between a man and a woman. So when the plaintiff announced on Facebook that he intended to marry his partner, the school terminated his employment.

The plaintiff filed suit for sexual orientation discrimination under Title VII. In September 2021, Judge Max O. Cogburn Jr., an Obama appointee to the Western District of North Carolina, held the plaintiff’s termination violated Title VII. By ruling in favor of the plaintiff, the District Court rejected the employer’s attempt to raise four “religious” defenses to the lawsuit.

First, the court held Title VII’s religious exemptions did not apply to the case, because those only allowed the Catholic employer to discriminate against non-Catholics. The employer’s argument that it was motivated by religious beliefs was unavailing because it was inescapable that the plaintiff’s sex was the deciding factor in the termination decision.

Second, the court held that the ministerial exemption did not apply to the plaintiff. The school did not allow the plaintiff to teach religion or require that he be Catholic or Christian. The plaintiff played very little to no role in the religious mission of the school.

Third, the court held that under the plain language of RFRA, it did not apply to suits between purely private parties. To support this argument, the court cited “nearly uniform precedent” from multiple jurisdictions that concluded that RFRA does not apply when the government is not a party. See, e.g., General Conf. Corp. of Seventh-Day Adventists v. McGill, 617 F.3d 402, 410 (6th Cir. 2010).

Finally, the court rejected the employer’s First Amendment claims to freedom of expression and freedom from association. Those rights, the court held, were inapplicable in the commercial context.

And even if strict scrutiny applied to the RFRA or the constitutional issues, the court found that Title VII’s goal of protecting employees from discrimination to “easily satisfy the compelling interest test.” Unlike the Texas District Court, this court balanced the Title VII goals against the Catholic School’s interest is not associating with a gay teacher. The plaintiff’s right to be free from discrimination in employment was “a compelling interest of the highest order” that could not be achieved through less restrictive means. On the other hand, the court found the Catholic school’s interest to be minimal, considering the school’s mission was clearly not carried out by its teachers who were told to refrain from teaching religious topics and were not required to be Catholic.

On March 18, 2022, the North Carolina District Court entered judgment in favor of the plaintiff for $55,000 plus fees, costs, and interest. The employer has appealed to the Fourth Circuit.

Looking Ahead

Both Billard and Braidwood are currently scheduled to complete briefing this fall. The appeals courts’ rulings, therefore, can be expected in late fall or, more likely, early winter. And as this article was going to the press, the U.S. District Court for the District of Maryland ruled that a Catholic employer violated Title VII by terminating the spousal health insurance benefits of a gay man’s husband. See, Doe v. Catholic Relief Services, Case No. 20-1815, 2022 WL 3083439 (D. Maryland Aug. 3, 2022). The District Court rejected the employer’s religious defenses for the same reasons they were rejected in Billard. If any of these courts ultimately rule in favor of religious expression over LGBT anti-discrimination laws, there are numerous questions that will need to be addressed in the employment context.

How far, for instance, do religious rights extend to corporate employers? Do only closely held entities share the religious rights of their owners? What percentage of ownership of a closely held entity must share a particular belief to confer the religious rights of the owners to the entity?

And how will these rulings affect state anti-discrimination constitutional provisions, statutes, regulations, or cases like Rouch World that do not contain federal statutory exemptions for religious employers?

Can religious employers discriminate beyond LGBT employees based on their sincerely held religious beliefs? What if an employer believes interracial marriage, inter-religious marriage, or specific gender roles are immoral? It’s hard to imagine the Supreme Court in the 1960s carving out a religious exemption from Title VII for employers to discriminate like that. Yet the Court today seems poised to do something similar. What makes this situation different?

Over the last 30 years in these two lines of cases, the Supreme Court attempted to simultaneously uphold traditional religious values and LGBT rights as equal constitutional principles. But most organized religions have not yet fully accepted LGBT rights in the way they have accepted other forms of diversity. Something must give.

Eventually, the Supreme Court will have to resolve these issues and explain its reasoning. Next Term, the Court will consider the Tenth Circuit’s ruling in 303 Creative LLC v. Elenis, 6 F.4th 1160 (10th Cir. 2021), which raises the question whether a wedding website designer has a First Amendment exemption to a state anti-discrimination law to decline to provide services for same-sex marriages. The ruling may provide insight as to how the Supreme Court will decide employment cases.

Ryan D. Bohannon