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Federal Appeals Court Upholds Bostock Exemption for Religious Nonprofits

    Client Alerts
  • June 22, 2023

The U.S. Supreme Court’s Bostock v. Clayton County decision recognized discrimination on the basis of sexual orientation and gender identity as forms of sex discrimination, essentially incorporating such claims into Title VII’s protected classifications. Subsequent to this decision, the Equal Employment Opportunity Commission (EEOC) issued guidance on the scope of the Bostock decision, but it did not address the impact of the case on employment decisions made by religious organizations. Several of those organizations filed suit in federal court in Texas, seeking a declaration that they are not required to amend their employment practices to remove exclusions of LGBTQ+ people. The district court agreed, and the EEOC appealed the decision to the Fifth Circuit Court of Appeals.

In its appeal of Braidwood Management v. EEOC, the EEOC argued that because it had not initiated any enforcement action against the plaintiffs, there was no legal standing for them to pursue their claims. The Fifth Circuit disagreed, leaving most of the lower court’s order in place. The court ruled that the EEOC’s failure to provide a specific exemption from Bostock for religious employers contradicts the Religious Freedom Restoration Act, as the lack of an exemption could lead the employers to conclude they must violate their religious beliefs to avoid Title VII claims.

The Fifth Circuit affirmed this order as it applies to the plaintiffs: a religious nonprofit and a for-profit organization with a faith-based mission statement. The Fifth Circuit denied the plaintiffs’ request for class action certification that would apply this ruling to a broad group of for-profit businesses. Unless the Supreme Court agrees to review this decision, it will likely result in additional legal action by privately held companies to assert the owners' religious beliefs as grounds for exemption from Title VII claims based on LGBTQ+ status.

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