Religious Shields in Contractor Bias Probes Set for DOL Agenda (1)

Oct. 17, 2018, 12:34 PM; Updated: Oct. 17, 2018, 7:31 PM

The Labor Department plans to update its rules to reflect current religious exemptions that federal contractors can use as a defense against accusations of workplace discrimination.

The move may add to growing tensions between religious liberty rights for businesses and anti-bias protections for lesbian, gay, bisexual, and transgender individuals.

The DOL’s Office of Federal Contractor Compliance Programs could issue the proposed rule as early as December (RIN:1250-AA09), according to the Trump administration’s regulatory agenda released Oct. 17. The rulemaking was expected, following the agency’s release of “religious freedom” guidance in August.

Religious rights groups applauded that guidance as “common sense clarification,” while opponents viewed it as an attempt to turn religious liberty into a “weapon for discrimination.”

The OFCCP regularly audits companies that do business with the federal government for compliance with anti-discrimination laws. It’s the only federal agency that has express authority—via an Obama-era executive order—to prohibit workplace bias based on sexual orientation and gender identity.

The agency already recognizes several religious exemptions. One allows religious corporations, associations, educational institutions, or societies to favor workers and applicants of a particular religion in employment decisions, such as in hiring. Another bars government interference with a religious organization’s decisions regarding its ministers.

Its August guidance memorialized already-existing protections under the federal Religious Freedom Restoration Act, which allows certain employers with no religious affiliations to avoid discrimination liability because of an owner’s religious beliefs. It also cited to the U.S. Supreme Court’s ruling in Masterpiece Cakeshop Ltd. v. Colorado Civil Rights Commission, which requires a government enforcement agency to neutrally explain why it’s rejecting a business’s religious defense in a discrimination case.

Threat to Protections?

Former Obama administration officials and LGBT advocates said the slated updates could further threaten existing protections.

“We won’t know from this what the regulation will do, just that it will address the religious exemption,” Pamela Coukos, a former OFCCP senior program adviser during the Obama administration, told Bloomberg Law. “Of course there is no real reason to do that unless you wanted to make it easier to grant exemptions and given the Administration’s record that’s what I assume they intend to do.”

She said she’s unsure how it will impact enforcement discrimination on the basis of sexual orientation and gender identity.

Twenty-one Jewish organizations, including the Anti-Defamation League and the Jewish Alliance for Law and Social Action, called for the rescission of the OFCCP’s “radical” August directive in a Sept. 12 letter.

“The directive, and any future rule making that follows, will sanction publicly funded employment discrimination in each and every federal contract,” the letter stated.

Religious advocacy groups cheered the recognition of a core component of their identities.

“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,” Kimberlee Colby, director of the Center for Law and Religious Freedom within the Christian Legal Society, told Bloomberg Law when the original directive was released.

Alissa Horvitz, a management attorney with experience representing employers during OFCCP audits, previously said employers “tend not to have a lot of religious issues cropping up, certainly on the OFCCP’s front.”

(Updated with additional reporting.)

To contact the reporters on this story: Jay-Anne B. Casuga in Washington at jcasuga@bloomberglaw.com; Paige Smith in Washington at psmith@bloomberglaw.com

To contact the editors responsible for this story: Martha Mueller Neff at mmuellerneff@bloomberglaw.com; Phil Kushin at pkushin@bloomberglaw.com

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