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New Legal Standard for Religious Accommodations Raises Questions Over Non-Economic Impacts of Requests

    Client Alerts
  • July 07, 2023

Last week, the U.S. Supreme Court’s decision in Groff v. DeJoy upended long-held assumptions over the legal standard used to review employers’ responses to employees’ requests for religious accommodations under Title VII. Instead of the former de minimus rule used to review these requests, the court instead applied a test that determines whether the accommodation would impose substantial additional costs on the company in relation to its size and resources.

The court specifically rejected the use of non-economic factors such as the impact of the request on co-workers, absent a demonstration of actual financial loss. This opinion raises questions over how employers respond to accommodation requests that potentially disrupt business operations but do not appear to have a direct economic cost. For example, an employee asks for an exemption from attending mandatory diversity and inclusion training because his religious beliefs are incompatible with acceptance of LGBTQ co-workers or customers. The employer views this training and its diversity efforts as crucial to its business philosophy and long-term success.

May the employer deny the accommodation request in this circumstance? How does excusing the employee from the training result in substantial additional costs to the company? The employer may be able to come up with some estimate of the economic cost of failure of its diversity efforts, but how does it quantify the specific costs associated with the accommodation request? Regulations issued under the Americans with Disabilities Act allow an employer to deny an accommodation based on either excessive cost or the impact of the accommodation on the operation of the business. Groff said that the ADA standard does not apply to Title VII religious accommodation decisions, and limits the review to purely economic terms.

Lower courts will likely be faced with new litigation seeking to define the boundaries of this accommodation test. Until there is additional judicial clarification or EEOC regulations explaining employers’ obligations, companies may take a cautious approach, agreeing to employee religious accommodation requests absent a clear demonstrable economic cost.

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