Contractor Rule Could Pit Religious Liberties Against LGBT Rights (Corrected)

The Labor Department plans to prioritize religious liberty protections for federal contractors, but the timeline for explaining what that means for LGBT discrimination investigations is unknown.

A spokesman declined to say when the department will release a new rule allowing contractors to use religious beliefs as a shield against job discrimination charges. That regulation would implement an Office of Federal Contract Compliance Programs directive announced Aug. 10.

The directive is an indication that the OFCCP is making religious liberty a priority under the Trump administration. But it’s still unclear how the federal contractor watchdog will thread the needle between religious rights and protections for gay and transgender workers.

“I am perplexed about how they are going to put this into a rulemaking,” Alissa Horvitz, who represents contractors in OFCCP investigations, told Bloomberg Law. She said her clients “clearly understand that they cannot discriminate based on religion,” but they “tend not to have a lot of religious issues cropping up, certainly on the OFCCP’s front.”

“Common Sense Clarification”

The release comes at an uncertain time for the OFCCP, after Ondray Harris recently left his role running the office. The Labor Department’s policy shop, which is expected to have a significant say in what the regulation looks like, is being run by Acting Assistant Secretary Jonathan Berry while nominee Bryan Jarrett awaits confirmation. Jarrett currently serves as acting Wage and Hour administrator.

The move is already being applauded by religious rights groups. Bruce Hausknecht, a judicial analyst with Focus on the Family, a Christian non-profit organization, embraced the directive’s “common sense clarification.”

“The new directive from OFCCP is a welcome return to the Bush-era definition of religious freedom in hiring for religious entities dealing with the federal government,” he told Bloomberg Law in an email.

“The Obama-era interpretation was a confusing and potentially harmful retreat from well-understood religious hiring rights of faith-based organizations,” he said.

A Swat at LGBT Protections

The directive is most likely a swipe on the Obama administration’s ban on bias against gay and transgender workers, which the OFCCP addressed in a 2014 rule. It comes shortly after Attorney General Jeff Sessions reaffirmed the administration’s stance to “defend the rights of people of faith” in remarks at the Alliance Defending Freedom’s Summit on Religious Liberty on Aug. 8.

Former President Barack Obama in 2014 updated two executive orders to ban contractors from discriminating against their workers based on sexual orientation and gender identity.

Pamela Coukos, a former OFCCP senior program adviser during the Obama administration, said the new directive could create conflicts among the executive orders and the enforcement agency’s newly prioritized religious liberties protections.

The directive serves as a warning shot, Coukos said.

“Given the hostility of this administration toward LGBT rights, this is very concerning, especially because it doesn’t clarify whether or how compliance officers should continue to implement existing enforcement practices regarding LGBT discrimination,” Coukos told Bloomberg Law.

The newly minted policy encourages the agency to take into account during enforcement proceedings recent executive orders and U.S. Supreme Court decisions. The policy specifically cites Masterpiece Cakeshop, Ltd. v. Colorado Civil Rights Commission, in which the court sided with a baker who refused on religious grounds to make a wedding cake for a gay couple.

In the Burwell v. Hobby Lobby Stores, Inc. decision, the high court said closely held businesses are protected by the Religious Freedom Restoration Act. The justices ruled that an employer was exempt from an Affordable Care Act contraceptive mandate based on its religious beliefs.

Protecting or Appeasing?

Religious organizations are often the most effective means of reaching some of the most vulnerable Americans, according to Kimberlee Colby, director of the Center for Law and Religious Freedom within the Christian Legal Society.

“The government should not require religious organizations to forfeit what makes them effective and efficient—that is, their religious identities—in order to compete for government contracts,” Colby told Bloomberg Law. “The needs that the government is trying to meet require an ‘all hands on deck’ approach that should include, not exclude, religious organizations’ help.”

Adam Pulver, a former senior attorney in the DOL’s solicitor’s office, told Bloomberg Law that the directive “is a solution without a problem.”

The directive is “an attempt to appease the hard right,” he said. The cases cited in the directive offer no reason for the enforcement agency to alter its policy.

“This is a way for the administration to attempt to modify the EO without doing so,” said Pulver, now with the Public Citizen Litigation Group.