On August 15, 2019, the Office of Federal Compliance Contract Programs (OFCCP) proposed a new rule broadening the religious exemption that applies to its equal employment opportunity regulations.  The proposed rule is based on recent Supreme Court opinions addressing religious protections and OFCCP’s stated perception that religious organizations are “reluctant to participate as federal contractors because of uncertainty regarding the scope of the religious exemption contained in section 204(c) of Executive Order 11246.”

The proposed rule states that it should be construed to provide the broadest protection of religious exercise permitted by the Constitution and other laws.  The proposed rule clarifies that:

• The exemption applies to “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”

• 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”

• To find a violation of Executive Order 11246, OFCCP must find by “a preponderance of the evidence that a protected characteristic other than religion was a but-for cause of the adverse action”

Religious organizations will continue to be required to comply with OFCCP’s prohibitions on discriminating based on race, color, sex, disability, protected veteran status, and other characteristics as well as the requirement to maintain affirmative action programs.  Contractors covered by the exemption should also note that it may not protect them from liability under Title VII or applicable state or local anti-discrimination laws if those laws do not have similarly broad religious exemptions.

Acting U.S. Secretary of Labor Patrick Pizzella stated in a press release that the proposed rule “helps to ensure the civil rights of religious employers are protected.”  “As people of faith with deeply held religious beliefs are making decisions on whether to participate in federal contracting, they deserve clear understanding of their obligations and protections under the law.”  OFCCP will accept public comments on the rule for 30 days, until September 16, 2019.  Polsinelli will continue to monitor this issue and provide updates on the new developments.