OFCCP Issues Notice of Proposed Rulemaking to Clarify Religious Exemption for Federal Contractors

Last week, the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) issued a Notice of Proposed Rulemaking that proposed regulations to clarify the scope and application of the religious exemption for certain federal contractors. A brief explanation of the applicable religious exemption is helpful to understand the impact of the proposed regulation.

Title VII of the Civil Rights Act of 1964 does not apply “to a religious corporation, association, or society with respect to the employment of individuals of a particular religion to perform work connected with the carrying on by such corporation, association, or society of its religious activities.” Since its incorporation, this religious exemption has expanded to cover all activities of a religious organization, which expansion has been upheld by the courts.

Shortly after the implementation of Title VII, President Johnson signed Executive Order 11246, which requires that all government contracts include a clause stating, “The contractor will not discriminate against any employee or applicant for employment because of race, creed, color, or national origin.” This clause has subsequently expanded to protect employees from discrimination on the bases of sex and religion. In 2002, President Bush amended the order by importing Title VII’s exemption for religious organizations. The U.S. Department of Labor is responsible for enforcing this order.

Because there has been some variation among the courts in interpreting the scope and application of the Title VII religious exemption, the recent proposed regulation seeks to provide clarity for how it will apply for federal contractors’ compliance with Executive Order 11246. Among the proposed changes, the proposed regulation intends to clarify that the “religious exemption covers not just churches but employers that are organized for a religious purpose, hold themselves out to the public as carrying out a religious purpose, and engage in exercise of religion consistent with, and in furtherance of, a religious purpose.” In addition, it also seeks to make clear that “religious employers can condition employment on acceptance of or adherence to religious tenets without sanction by the federal government, provided that they do not discriminate based on other protected bases.”

The response to the proposed rule has been split. Several religious-freedom advocates have supported the rule for the clarity that it provides concerning the religious freedoms of an employer. Conversely, LGBTQ advocates have opposed the rule with concerns that it could result in increased discrimination. The entire text of the notice is available here. The OFCCP has invited the public’s comment on the proposed regulation. The comment period will remain open until September 16, 2019.