DOL Finalizes Rule Undoing Trump-Era Religious Contractor Policy

The US Department of Labor finalized a regulation rescinding a Trump-era rule that broadened religious exemptions federal contractors can raise to shield themselves from liability for discrimination.

The DOL’s Office of Federal Contract Compliance Programs published the regulation (RIN: 1250-AA09) in the Federal Register on Tuesday. The rule had been under review by the White House’s Office of Information and Regulatory Affairs since July.

The Trump administration rule, which took effect in January 2021, has been subject to lawsuits from states and unions, who say the regulation would weaponize religious liberties and weaken anti-bias laws. Supporters of the Trump rule argue that a contractor has a First Amendment right to make employment decisions based on faith.

That litigation was paused when the DOL announced in November 2021 that it would begin the process of rescinding the rule. OFCCP Director Jenny Yang said in a statement at the time that undoing the rule “would protect against discrimination and safeguard principles of religious freedom.”

“With this proposal, OFCCP would simply return to our policy and practice of considering the facts of each case and applying Title VII principles and case law and other applicable law,” Yang said.

The Trump-era rule codified for federal contractors the same kinds of exemptions from discrimination liability under Title VII of the 1964 Civil Rights Act that “religion-exercising organizations” such as churches or temples have for employment decisions motivated by religious beliefs. The rule also extended those exemptions to “closely held” corporations owned and operated by a small number of people.