LGBTQ+ Worker Rights Battle to Heat Up Post-Fifth Circuit Ruling

A federal appeals court’s decision this week finding that religious employers can skirt liability for LGBTQ+ workers’ discrimination claims has created additional uncertainty and opened the door to more litigation.

The US Court of Appeals for the Fifth Circuit largely affirmed a lower court order that the Religious Freedom Restoration Act shields businesses like plaintiff Braidwood Management Inc., a Christian-run health-care provider, from gender identity and sexual orientation bias claims under Title VII of the 1964 Civil Rights Act. Another plaintiff, religious nonprofit Bear Creek Bible Church, could also refuse to hire and can fire LGBTQ+ employees under Title VII’s religious exemptions, it said.

The US Supreme Court’s Bostock v. Clayton County decision, which expanded civil rights protections for LGBTQ+ workers, doesn’t apply to these religious groups, the appeals court found. Affirmatively complying with Title VII as interpreted by Bostock and US Equal Employment Opportunity Commission guidance would “substantially burden” these organizations’ ability to operate in accordance with their “religious beliefs about homosexual and transgender conduct,” it said.

The Fifth Circuit sought to answer questions Bostock left unaddressed, including whether sincerely held religious beliefs could circumvent Title VII protections, attorneys say. But in doing so, the court generated even more questions.

Challenges like Braidwood’s “were inevitable because Bostock left the door open,” said Victoria Lipnic, a former acting EEOC chair. “I don’t think this is the last of them by any means,” she said.

“Of course, this is one circuit court decision and we would have to see what happens in other circuits,” said Lipnic, now a partner at consulting firm Resolution Economics LLC.

Suits to Follow?

Among the questions left open in the case are what a private, for-profit business must show to be considered a religious employer protected by the RFRA, and whether a company could establish discriminatory sex-neutral codes of conduct, said Corey Devine, a partner at labor and employment firm Muskat, Mahony & Devine LLP.

The Fifth Circuit’s religious carveout to LGBTQ+ rights “was poorly sketched out” and doesn’t leave employers with much guidance, Devine said.

“This decision, even though in fleshing out what Bostock means, leaves so much open that I’m not sure it advances the ball on helping employers understand what the rules of the road are,” he said.

But the ruling allows faith-based companies to challenge Title VII interpretations before they’re enforced, likely emboldening other employers with religious objections to LGBTQ+ rights to go to court, attorneys said.

“I think this makes it easier for more lawsuits to move forward on this issue,” said Margo Wolf O’Donnell, co-chair of Benesch Friedlander Coplan & Aronoff LLP’s labor and employment practice.

A pre-enforcement action rather than presenting a defense to a bias lawsuit might now be seen as an easier “tactic” for businesses to achieve their desired outcome, she said.

A representative for the EEOC said the agency is reviewing the decision and referred inquiries to the Justice Department, which didn’t immediately respond to a request for comment.

The panel’s determination that the employers had standing despite the EEOC not yet bringing any action against them will force the agency to rethink its Title VII enforcement strategy, attorneys said.

“The EEOC obviously has to give a lot of consideration to any kind of enforcement actions in other jurisdictions,” not just the Fifth Circuit, Lipnic said.

Conservative group America First Legal Foundation, which filed the case along with Mitchell Law PLLC, in a statement vowed to continue to fight against “the Biden administration’s radical, illegal, and overreaching transgender edicts.”

Supreme Court Return

The Fifth Circuit’s ruling is less sweeping than that of the federal district court below.

Vacating two certified classes of religious employers, the appeals court limited its decision to the individual claims brought by Braidwood and Bear Creek. But it affirmed the district judge’s ruling that because Title VII’s religious exemptions shield Bear Creek from LGBTQ+ discrimination liability, the organization doesn’t need a court judgment granting it separate protections under the RFRA.

That’s a “positive” for the EEOC and LGBTQ+ advocates, said John L. Shahdanian II, chair of Trenk Isabel Siddiqi & Shahdanian PC’s labor and employment group.

“But this case is setting up a future battle” at the Supreme Court over the interplay between Title VII and the RFRA, he said.

“There’s certainly more exposition on this issue that’s required by a higher court,” Shahdanian said. “I see this as a stopping point for refueling until we get a definitive ruling.”

Until there’s greater clarity on the issue, tensions over religious and LGBTQ+ rights in the workplace will remain, attorneys said. But the issue is both legal and philosophical.

“This decision is focused on an employer who’s extreme with its views. I think the average employer has employees on both sides of the spectrum, so figuring out how to manage workplace tension and keep people working together productively is a tough problem to solve,” Devine said. “There’s no easy answer.”