OFCCP Week In Review: November 1, 2021

The DE OFCCP Week in Review (WIR) is a simple, fast and direct summary of relevant happenings in the OFCCP regulatory environment, authored by experts John C. Fox, Candee Chambers and Jennifer Polcer. In today’s edition, they discuss:

• EEOC Tackles COVID Religious Accommodation FAQs
• Comment Now on the Remote Document Examination Process for the I-9 Form
• No Surprise: EEO-1 Survey Portal Still Open
• Employers Must Close Cases To Complete the E-Verify Process
• Listen In: The Role of Employers In Employee Mental Health
• Another OFCCP Policy Reversal in The Making as Agency Nears Rescission of its Rule Outlining Executive Order 11246’s Religious Exemption for Federal Contractors
• EEOC Launched Its Artificial Intelligence Initiative Commissioner Sonderling Has Long Championed And Forewarned
• Back-to-the-Future! USDOL Published Final Rule Reinstating “80-20” Policy for Minimum Wages Owed Tipped Employees and Rescinding the Remainder of the Trump Final Rule
• It Starts: Red State Lawsuits Busting Out Big to Stop Biden Vaccination Mandate Seeking to Require Federal Government Contractors/Subcontractors to Fire Unvaxxed Employees
• Trump Administration’s Joint Employer Rule Officially Dead
• Court Exalts SOME Rights of Private For-Profit Companies Over SOME LGBTQ+ Rights in Religious Freedom Treatise in Latest Collision of Rights Case Decision

Monday, October 25, 2021: EEOC Tackles COVID Religious Accommodation FAQs

The Equal Employment Opportunity Commission (EEOC) updated its technical assistance guide by adding a new section “L. Vaccinations – Title VII and Religious Objections to COVID-19 Vaccine Mandates.” This section indicates that “Although other laws, such as the Religious Freedom Restoration Act (RFRA), may also protect religious freedom in some circumstances, this technical assistance only describes employment rights and obligations under Title VII.”

[You may wish to read this story in conjunction with the last story of this WIR reporting Sunday’s federal court “collision of rights” decision which exalted the religious freedom rights of a private for-profit corporation above the rights of LGBTQ+ employees.]

Six New Religious Accommodation FAQs

The six new questions are listed in their entirety; however, we have shortened the answers (not the questions) for this publication. Readers should access the full responses for various exceptions and detailed explanations.

1. Do employees who have a religious objection to receiving a COVID-19 vaccination need to tell their employer? If so, is there specific language that must be used under Title VII?

The short answer is yes, although they don’t need to say any “magic words” like “religious accommodation” or “Title VII.” Interesting here is that the Agency shared its internal document on this process.

“As an example, here is how EEOC designed its own form for its own workplace. Although the EEOC’s internal forms typically are not made public, it is included here given the extraordinary circumstances facing employers and employees due to the COVID-19 pandemic. (Note: Persons not employed by the EEOC should not submit this form to the EEOC to request a religious accommodation.)”

2. Does an employer have to accept an employee’s assertion of a religious objection to a COVID-19 vaccination at face value? May the employer ask for additional information?

The short answers are generally “yes” and “yes.” As stated in the EEOC’s new guidance, “Generally, under Title VII, an employer should assume that a request for religious accommodation is based on sincerely held religious beliefs. However, if an employer has an objective basis for questioning either the religious nature or the sincerity of a particular belief, the employer would be justified in making a limited factual inquiry and seeking additional supporting information.” Additional supporting resources in the full answer include links to the EEOC’s Compliance Manual which was updated in January of 2021.

3. How does an employer show that it would be an “undue hardship” to accommodate an employee’s request for religious accommodation? 

The short answer is that, “An employer will need to assess undue hardship by considering the particular facts of each situation and will need to demonstrate how much cost or disruption the employee’s proposed accommodation would involve. An employer cannot rely on speculative hardships when faced with an employee’s religious objection but, rather, should rely on objective information.”

For a more detailed discussion, see Section 12-IV. B: Religious Discrimination (discussing undue hardship)

4. If an employer grants some employees a religious accommodation from a COVID-19 vaccination requirement because of sincerely held religious beliefs, does it have to grant the requests of all employees who seek an accommodation because of sincerely held religious beliefs? 

No (see full answer for explanation).

5. Must an employer provide the religious accommodation preferred by an employee if there are other possible accommodations that also are effective in eliminating the religious conflict and do not cause an undue hardship under Title VII? 

No (see full answer for explanation).

6. If an employer grants a religious accommodation to an employee, can the employer later reconsider it? 

Yes, however “As a best practice, an employer should discuss with the employee any concerns it has about continuing a religious accommodation before revoking it and consider whether there are alternative accommodations that would not impose an undue hardship.”

Employers should review the entire EEOC technical assistance guide and become familiar with all non-discrimination obligations when implementing policies related to COVID-19. This includes consulting with counsel as to implementing rules or policies. As a start, DE previously conducted a podcast DE Executive Director Candee J. Chambers hosted with Jay J. Wang, Esq of Fox, Wang & Morgan P.C. discussing employer vaccine mandates. The Podcast provides a preliminary introduction for employers that can be found here.

Monday, October 25, 2021: Comment Now on the Remote Document Examination Process for the I-9 Form

The Department of Homeland Security (DHS) opened a 60-day Comment period to gather public input regarding document examination practices when completing the Employment Eligibility Verification Form I-9. DHS seeks comments on alternative options to physical document examination that offer an equivalent or higher level of security for identity and employment eligibility verification purposes.

DHS solicits this input to better understand employers’ and employees’ experiences with this process and to examine the impacts of remote document examinations employers undertook during the COVID-19 pandemic. DHS especially seeks to understand the potential costs and benefits of allowing for future remote document examination flexibilities.

Comment on or before Monday, December 27, 2021.

Tuesday, October 26, 2021: No Surprise: EEO-1 Survey Portal Still Open

The Equal Employment Opportunity Commission updated the EEO-1 Report Survey portal to say,

“The deadline to submit and certify the mandatory 2019 and 2020 EEO-1 Component 1 Reports was Monday, October 25, 2021. If you have not filed your 2019 and/or 2020 EEO-1 Component 1 Report(s), please do so AS SOON AS POSSIBLE.

If you have already requested assistance from the Filer Support Help Desk and have a pending help desk ticket, we are in the process of addressing those requests and will ensure that you are able to file. We ask that filers only contact the EEO-1 Component 1 Help Desk once regarding the same issue.”

Tuesday, October 26, 2021: Employers Must Close Cases To Complete the E-Verify Process

E-Verify released an update on referred Tentative Nonconfirmations (TNCs).

In March 2020, E-Verify extended the timeframe employees had to contest their Tentative Nonconfirmations (TNCs). E-Verify will now begin updating some of the TNCs that have not received final responses.

Closing Cases

Employers are required to close every case to complete the E-Verify process. This includes:

• cases recently updated with final responses,
• cases created in error,
• cases with incorrect information,
• incomplete cases, and
• cases in which an employee is no longer employed.

Cases that are in a status of “Referred,” “Verification In Process,” or “Case in Continuance” cannot be closed until final case results are issued. E-Verify will automatically close cases that receive a result of Employment Authorized.

Resources

• E-Verify User Manual Section 4.1
• E-Verify Quick Reference Guide for Employers
• Send questions or feedback to e-verify@uscis.dhs.gov

Tuesday, October 26, 2021: Listen In: The Role of Employers In Employee Mental Health

Many employers have long recognized the need for mental health support. The COVID-19 pandemic has now pushed this concern to the forefront of all organizations. Now more than ever, employers are looking to break the stigma of mental health care, assess how to make positive strides forward, and how to create an open dialogue about mental health in their workplace.

How can employers create a work culture that supports mental and emotional well-being?

DE Talk: Season Three, Episode Three tackles this tough topic. Tune in as DE Executive Director Candee J. Chambers hosted psychiatrist Dr. Chris Bojrab to discuss the importance of mental health, how it affects the workplace, and the steps needed to prioritize mental health and well-being as a business imperative.

Tuesday, October 26, 2021: Another OFCCP Policy Reversal in The Making as Agency Nears Rescission of its Rule Outlining Executive Order 11246’s Religious Exemption for Federal Contractors

However, OFCCP will now have to pause and re-write in light of Sunday’s decision (reported in our last story, below) enforcing the same religious exemptions at-issue in the OFCCP Rule.

The Office of Management and Budget (OMB) concluded its review of the Office of Federal Contract Compliance Programs (OFCCP) “Rescission of Certain Provisions Related to the Religious Exemption for Federal Contractors and Subcontractors.”

How We Got Here

We broke it down in our story and bonus blog from December 7, 2021, in which we explained the following series of events.

• OFCCP originally published a Notice of Proposed Rulemaking on August 15, 2019.
• OFCCP then received over 109,000 comments from the public. However, over 50,000 of those comments were in the form of a pre-printed digital postcard the ACLU distributed to all of its chapter affiliates with a request that ACLU members submit the postcard in opposition to the Proposed Rule.
• The Final Rule acknowledged the growing tensions between LGBTQ advocates and religious groups, each pressing their respective rights. This competition of rights, colliding in the workplace and in society at large, has now become highly controversial and politicized. We call these court cases “collision of rights” cases.

What’s Next?

OFCCP will propose to rescind the Final Rule, which will include the removal of specific definitions at 41 CFR 60-1.3 related to the religious exemption and 41 CFR 60-1.5(e) and (f). OFCCP has not announced a timeline to publish its Rule, but it is reasonable to assume that OFCCP will publish the reversal this coming week or next. Groups dedicated to religious freedoms have previously announced their intent to sue to set aside the Biden OFCCP’s rescission Rule.

Thursday, October 28, 2021: EEOC Launched Its Artificial Intelligence Initiative Commissioner Sonderling Has Long Championed And Forewarned

The Equal Employment Opportunity Commission (EEOC) announced its new initiative on Artificial Intelligence and Algorithmic Fairness. EEOC Commissioner Keith Sonderling (R) has shown a special interest in the subject and has been the Commission’s public voice on AI. Commissioner Sonderling was first to warn the federal contractor community that the EEOC was readying itself to tackle the AI issue as it affected employment decisions as we previously reported in this August 2, 2021WIR story: EEOC Commissioner Sonderling: Commission To Tackle Artificial Intelligence in Employment Decisions and again earlier this month as we reported in this October 12, 2021 WIR story: EEOC Commissioner Sonderling Hit a Home Run Discussing All Things EEOC With DirectEmployers’ Members.

The EEOC AI project will examine how technology is arguably changing the way employment decisions are made. The Project aims to guide applicants, employees, employers, and technology vendors to ensure that these technologies are used fairly and consistently with federal equal employment opportunity laws.

As part of the new initiative, the EEOC plans to:

• establish an internal working group to coordinate the Agency’s work on the initiative;
• launch a series of listening sessions with key stakeholders about algorithmic tools and their employment ramifications;
• gather information about the adoption, design, and impact of hiring and other employment-related technologies;
• identify promising practices; and
• issue technical assistance to provide guidance on algorithmic fairness and the use of AI in employment decisions.

The Commission has been examining the issue of AI, people analytics, and big data in hiring and other employment decisions since at least 2016. That year, the EEOC held a public meeting on big data’s equal employment opportunity implications in the workplace. Additionally, the EEOC’s systemic investigators received extensive training in 2021 on the use of AI in employment practices.

OFCCP In On the Action, too: At the Arizona Industrial Liaison Group’s (AZilg) annual two-day OFCCP conference commencing last Wednesday, OFCCP Phoenix District Director Marvin Jordan reported that his investigators routinely inquire in audits whether the contractor used AI in any of its selection-for-hire tools. If so, Director Jordan reported that his investigators then determine whether the entire selection process reveals any statistical disparity in the percentage of offers of employment between one or more Protected Groups and the Most Favored Group. If so, Director Jordan reported that his investigators then obtain pass/fail data as to any “gates” through which a Person Expressing Interest must pass to advance in the selection-for-hire process. His teams then “run the numbers” for each pass/fail “step” in the selection process to determine whether that “neutral,” “specific” and “particular” policy or practice causes one or more Protected Groups to be limited from further consideration in proportions which are statistically significant compared to the Most Favored Group. If so, Director Jordan reported that his office then demands evidence from the contractor of its “business necessity” defense to each “step” showing a preliminary finding of “adverse impact” of concern to his office.

Thursday, October 28, 2021: Back-to-the-Future! USDOL Published Final Rule Reinstating “80-20” Policy for Minimum Wages Owed Tipped Employees and Rescinding the Remainder of the Trump Final Rule

Flip-flop. The U.S. Department of Labor (“DOL”) published its Final Rule reinstating the DOL’s longstanding policy related to the minimum wage owed to tipped employees. The Final Rule formalizes for the first-time in a regulation subject to public notice-and-comment the minimum wage for tipped employees engaged in non-customer facing activities. Specifically, employers must pay the federal minimum wage of $7.25 per hour to tipped employees for time spent performing tasks that are not directly related to serving customers if the tipped employee spends more than 20% of their workweek on such activities, or if the employee performs such activities for at least 30 continuous minutes. All customer-facing activities are still subject to the $2.13 per hour minimum wage for tipped employees. The Final Rule will go into effect on December 28, 2021.

How We Got Here

The October 28, 2021 Final Rule is the culmination of the Biden Administration’s dismantling of the Trump Administration’s Rule issued on December 30, 2020 attempting to alter the DOL’s longstanding policy as to the payment of tipped employees. The Final Rule addresses the last aspect of the Trump Administration Rule that still remained, pertaining to employers being able to pay the $2.13 per hour minimum wage to tipped employees for all hours worked as long as: (1) the duties performed are “related to” the employee’s tipped occupation, and (2) the employee performs the related duties contemporaneously with the tip-producing activities or within a reasonable time immediately before or after. The Biden Administration had previously rescinded other portions of the Trump Administration Rule via its September 24, 2021 Final Rule discussed previously. Readers can find the timeline related to the various machinations pertaining to the withdrawal of the Trump Administration’s rule here; but suffice it to say the new Final Rule is another example of the Biden Administration’s efforts to rollback employer-friendly policies the Trump Administration attempted to “shoehorn” in following the 2020 election.

Friday October 29, 2021: It Starts: Red State Lawsuits Busting Out Big to Stop Biden Vaccination Mandate Seeking to Require Federal Government Contractors/Subcontractors to Fire Unvaxxed Employees

Two different collections of states of the United States filed Complaints to stop implementation of President Biden’s vaccine mandate to require federal contractors and subcontractors to cause their employees to be vaccinated by December 8, 2021 or else terminate their employment.

First, Ten Republican-controlled states filed a Complaint against President Biden in Columbia, Missouri on Friday to stop the federal contractor/subcontractor vaccination mandate President Biden purported to order up via Executive Order 14042, as we earlier reported in our September 13, 2021 WIR in a story titled President Biden Mandates COVID-19 Vaccine for Certain Federal Contractors: Exceptions As Interesting As Who is Covered, and in a WIR Blog titled Two of President Biden’s Four Vaccine Mandates are Likely Unlawful, Without Implementing Rules, While the Other Two are Likely Lawful. (The ten states joining in the Missouri Complaint include, thus far: Alaska, Arkansas, Iowa, Missouri, Montana, Nebraska, New Hampshire, North Dakota, South Dakota, and Wyoming.)

The Plaintiffs in this 44-page 12-count “kitchen sink” Complaint allege that President Biden and the heads of several federal agencies have violated federal law in the following 12 ways:

• Violation of the Procurement Act
• Violation of Procurement Policy Act
• Unlawful Usurpation of States’ Police Powers
• Violation of Anti-Commandeering Doctrine
• Procedural Violation of the Administrative Procedure Act (APA)
• Substantive Violation of the APA
• Substantive Violation of the APA Agency Action Not in Accordance with Law and in Excess of Authority
• APA Violations Agency Action That is Not in Accordance with Law and is in Excess of Authority
• APA and Statutory Violations Arbitrary and Capricious Agency Action and Violation of Notice-and-Comment Requirements
• Separation of Powers
• Violation of Tenth Amendment and Federalism
• Unconstitutional Exercise of the Spending Power

These ten Plaintiffs do not thus far seek either an injunction of President Biden’s Executive Order 14042 or seek expedited hearing of their opposition to EO 14042 to beat the December 8, 2021 “vax or fire” deadline.

Seven more Republican-controlled states filed a 57 page Complaint on Friday in a federal District Court in Augusta, Georgia, according to Georgia Governor Brian Kemp who took to social media to report in a tweet almost two-million readers read on Friday that:

.@Georgia_AG & I, joined by other states, are filing a lawsuit today vs. @POTUS’s unlawful vaccine mandate.

We won’t allow the federal gov’t to circumvent the law or force hardworking Georgians to choose between their livelihood or a vaccine.

Read more: https://t.co/doAZBbj897

— Governor Brian P. Kemp (@GovKemp) October 29, 2021

The Plaintiffs in this case allege that President Biden and the heads of several federal agencies have violated federal law in six primary ways:

• Acting in excess of their authority under the Procurement Act
• Failing to conform with the rules for changing federal procurement policy
• Claiming powers that, under the U.S. Constitution, cannot be delegated to them
• Acting in violation of the separation of powers and the 10th Amendment
• Ignoring the requirements of the APA
• Violating the Spending Clause of the U.S. Constitution

These seven Plaintiffs do not thus far seek either an injunction of President Biden’s Executive Order 14042 or seek expedited hearing of their opposition to EO 14042 to beat the December 8, 2021 “vax or fire” deadline.

Finally, no word has yet been heard from the other ten states which Republican Governors control. That silence includes Indiana’s Attorney General who has previously promised to file a lawsuit to stop the coming OSHA Final Emergency Temporary Standard which (when published in Final form) will require OSHA-covered employers with 100 or more employees to terminate the employment of those employees who fail or refuse to be vaccinated, as we reported here last week.

Friday, October 29, 2021: Trump Administration’s Joint Employer Rule Officially Dead

As expected, the Second Circuit U.S. Court of Appeals on Friday dismissed as moot the U.S. Department of Labor’s (“USDOL”) pending appeal of a District Court’s September 8, 2020 decision striking down the USDOL “Joint Employer” Rule under the Fair Labor Standards Act (“FLSA”) issued during the Trump Administration (the “Trump Rule”). The appeal, initially filed by the Trump Administration USDOL, was bound for a Motion to Dismiss once the Biden Administration took over the USDOL and gained control over the USDOL’s regulatory agenda.

The Order on Friday granting the USDOL’s Motion to Dismiss the appeal finally closes the door on attempts to revive the Trump Rule. That Rule had attempted to curtail the circumstances when a business qualified as a joint employer of a worker under the FLSA to require the actual exercise of control or direction by the business. Several business organizations had intervened in the suit in an attempt to keep the appeal alive in an attempt to revive the Trump Rule. However, such efforts faced an insurmountable obstacle given the Biden Administration’s recission of the Trump Rule on July 30, 2021 (thus nullifying the existence of the Trump Rule), and the Biden Administration’s decision to not proceed with the pending appeal.

For now, the Obama Administration’s standard defining which companies are “joint employers” is again controlling. Please note, too, that the Biden Administration has been silent thus far as to whether it will put forward a new “joint employer” Rule. Many USDOL observers at this time believe it is the Biden USDOL’s intent to implement and enforce the Obama-era Rule without further change. The Obama Administration USDOL had expanded the entities that would bear responsibility for FLSA violations as a “joint employer” based on the reserved but unexercised right to control contained in contracts between the worker’s employer and the other businesses which could potentially be a joint employer. As such, employers should follow the Obama standard, and review their contracts with vendors and staffing agencies to determine whether they might qualify as a “joint employer” and be subject to liability under the FLSA as a “joint employer.”

Sunday, October 31, 2021: Court Exalts SOME Rights of Private For-Profit Companies Over SOME LGBTQ+ Rights in Religious Freedom Treatise in Latest Collision of Rights Case Decision

Decision like a box of chocolates (something in it for everybody, and some real surprises) 

            Many Legal Issues of First Impression Now Decided Following Bostock

The case decision is Bear Creek Bible Church & Braidwood Management, Inc. v. Equal Employment Opportunity Commission U.S. Pastor Council et al v. Equal Employment Opportunity Commission et al, Docket No. 4:18-cv-00824 (N.D. Tex. Oct 06, 2018), Court Docket (70 pages)

Five background things to know before you get to the MANY specific case decision holdings bullet-pointed, below:

1. This is the case LGBTQ+ advocates have been fearing: a head-on collision of rights case a small for-profit business has brought seeking a declaration of its rights to discriminate against LGBTQ+ employees based on the owner’s sincerely held belief that religious scripture so requires.

As quoted from Judge O’Connor’s decision: “The woman shall not wear that which pertaineth unto a man, neither shall a man put on a woman’s garment: for all that do so are abomination unto the Lord thy God.” Deuteronomy 22:5 (King James Version)

2. Undoubtedly keenly aware that this case could end up at the SCOTUS, Fort Worth federal District Court Judge Reed O’Connor (the “Go To for Conservatives” Judge who previously struck down Obamacare as unconstitutional) has written a carefully drafted and thorough treatise on the religious freedom rights companies enjoy under both Title VII of the 1964 Civil Rights Act but also under RFRA (the Religious Freedom Restoration Act of 1993). Then U.S. House of Representatives Member Chuck Schumer (D-NY), now the Majority Leader of the U.S. Senate, introduced and sponsored RFRA in 1993. Get to know that acronym. We will see a lot of it in future years as this statute supplements the religious protections both the First Amendment to the U.S. Constitution and Title VII’s religious freedom exception otherwise afford. Here is how SCOTUS has previously described the interplay of Title VII’s religious freedom rights with both the First Amendment to the U.S. Constitution and with those of RFRA:

“We are also deeply concerned with preserving the promise of the free exercise of religion enshrined in our Constitution; that guarantee lies at the heart of our pluralistic society. But worries about how Title VII may intersect with religious liberties are nothing new; they even predate the statute’s passage. As a result of its deliberations in adopting the law, Congress included an express statutory exception for religious organizations. § 2000e–1(a). This Court has also recognized that the First Amendment can bar the application of employment discrimination laws “to claims concerning the employment relationship between a religious institution and its ministers.” [citations omitted] And Congress has gone a step further yet in the Religious Freedom Restoration Act of 1993 (RFRA), 107 Stat. 1488, codified at 42 U.S.C. § 2000bb et seq. That statute prohibits the federal government from substantially burdening a person’s exercise of religion unless it demonstrates that doing so both furthers a compelling governmental interest and represents the least restrictive means of furthering that interest. § 2000bb–1. Because RFRA operates as a kind of super statute, displacing the normal operation of other federal laws, it might supersede Title VII’s commands in appropriate cases. See § 2000bb–3.” Bostock v. Clayton Cnty, 140 S. Ct. 173, 1754 (2020)

3. This case is also one of the few which affords advocates a clear look at the head-on collision of rights over issues which the SCOTUS specifically reserved for future litigation in its groundbreaking 2020 Bostock v. Clayton County case decision:

“The employers worry that our decision will sweep beyond Title VII to other federal or state laws that prohibit sex discrimination. And, under Title VII itself, they say sex-segregated bathrooms, locker rooms, and dress codes will prove unsustainable after our decision today. But none of these other laws are before us; we have not had the benefit of adversarial testing about the meaning of their terms, and we do not prejudge any such question today. Under Title VII, too, we do not purport to address bathrooms, locker rooms, or anything else of the kind. The only question before us is whether an employer who fires someone simply for being homosexual or transgender has discharged or otherwise discriminated against that individual “because of such individual’s sex.” Bostock at p. 1753

4. Procedural Legal Issues (to understand, but ignore: debris on the freeway)

Much of the court’s lengthy decision is consumed with the following three procedural legal issues of great interest to great lawyers, but not other mere mortals.

Declaratory Relief: The Bear Creek Bible Church and Braidwood Management, Inc. sued the EEOC (no EEOC Charge is pending) in federal court in Fort Worth, Texas in a so-called “Declaratory Judgment” action. In an action for “Declaratory Relief,” the Plaintiff (the party suing) seeks a declaration from a Court in advance of any specific dispute about the rights of the Plaintiff fearing that it could otherwise later be prosecuted for failing to comply with a threatened violation of law. In other words, the Plaintiff simply wants a declaration of its rights before it likely gets sued.

Summary Judgment: The parties in this case sought trial by “Summary Judgment,” one of the three primary forms of trial (along with jury trial and bench trial). A Summary Judgment trial may proceed where there are no “material facts” in dispute (thus obviating the need for a fact-finder–like a jury or a judge hearing witnesses to determine what is a true fact: was the traffic light, for example, red or green). Rather, in a Summary Judgment trial, only the applicable law in dispute is at-issue.

Class Action Issues: Plaintiffs brought a class action on behalf of two classes: (1) every employer in the United States that opposes homosexual or transgender behavior for sincere religious reasons (“Religious Employers Class”); and (2) every employer in the United States that opposes homosexual or transgender behavior for religious or nonreligious reasons (“All Opposing Employers Class”).

5. Bear Creek Church is a nondenominational church located in Keller, Texas. Bear Creek Church requires its employees to live according to Biblical teachings on matters of sexuality and gender. In accordance with those teachings, Bear Creek Church does not recognize same-sex marriage. Any church employee who enters into a same-sex marriage will not receive benefits for his or her same-sex partner and faces immediate dismissal. Bear Creek Church also requires its employees to use the restroom designated for their biological sex.

Braidwood Management, Inc. employs approximately seventy individuals, who work at one of the following three businesses, each of which is owned or controlled by Dr. Stephen Hotze: the Hotze Health & Wellness Center, Hotze Vitamins, and Physicians Preference Pharmacy International LLC. Because Hotze operates these entities as Christian businesses, he does not allow Braidwood to employ individuals who are engaged in homosexual behavior or gender non-conforming conduct of any sort. Hotze does not allow Braidwood to recognize same-sex marriage or extend benefits to an employee’s same-sex partner, because he believes that would lend approval to homosexual behavior and make him complicit in sin, violating his sincerely held religious beliefs. Hotze also will not allow Braidwood to recognize same-sex marriage in part because the law of Texas continues to define marriage as the union of one man and one woman. Hotze believes Texas law continues to prohibit private employers such as Braidwood from recognizing same-sex marriage. Hotze does not permit employees of Braidwood to use a restroom designated for members of the opposite biological sex—regardless of the gender identity the employee asserts. Braidwood also enforces a sex-specific dress-and-grooming code that requires men and women to wear professional attire according to their biologically assigned sex. Men are forbidden to wear earrings, but women may. Men who have customer contact must wear a tie; women are not permitted to wear ties. Women can wear skirts, blouses, shoes with heels, and fingernail polish, while men are forbidden to wear any of these items. Id. Cross-dressing of any sort is strictly prohibited. Hotze enforces this sex-specific dress-and-grooming code to maintain the professionalism of his businesses and to carry out his belief that the Bible requires men to dress as men and women to dress as women.

The Court’s Holdings of Law:

1. Title VII does not apply to religious organizations. Courts use a 9-factor test to determine what is a “religious organization.” Bear Creek Church satisfied all nine factors so Title VII does not apply to it and this Church can thus not be found to have violated any of Title VII’s non-discrimination prohibitions. (pp. 42-43)
2. Title VII does apply to Braidwood Management because Braidwood Management did not satisfy the 9-factor test necessary to find it exempt from Title VII (like the Bear Creek Church). (pp. 43-44)
3. Braidwood Management is nonetheless exempt from Title VII’s non-discrimination prohibitions because RFRA protects the company from Title VII’s non-discrimination prohibitions:
   • “Substantial Burden” proof: (you may wish to review SCOTUS’ discussion, above, of proof required to avail oneself of RFRA protections): Braidwood proved that Title VII imposed a “substantial burden” on its sincerely held religious beliefs which violate Title VII’s non-discrimination prohibitions (i.e. that “marriage is limited to a man and a woman,” that “sex is to be reserved for marriage,” and that “men and women are to dress and behave in accordance with distinct and God-ordained, biological sexual identity” and which Braidwood management believes it is “called by God to obey.”) “The Court finds that Title VII substantially burdens Braidwood’s religious exercise in conducting its business. … religious employers are required to choose between two untenable alternatives: either (1) violate Title VII and obey their convictions or (2) obey Title VII and violate their convictions.” The Court also found evidence that Title VII would burden Braidwood because the penalty for non-compliance would be EEOC enforcement, which would subject Braidwood to liability for backpay, compensatory damages, and punitive damages.
   • “Compelling Interest” proof: Once Braidwood has proven that substantial burden exists, the defendant(s) (EEOC and other federal parties in this case) must prove the burden is justified to defeat RFRA’s protection of the religious employer and then must further show that the defendant has chosen the “least restrictive means” of advancing that interest. The Court observed that the EEOC and other Defendants in this case tried to make these two showings of proof in but “a single paragraph” of their brief arguing only that the EEOC and fellow Defendants had a compelling interest “in eradicating workplace discrimination.” Unimpressed, the Court held: “Braidwood has established Title VII places a substantial burden on its religious exercise, and Defendants fail to meet its burden to show a compelling interest. But even if the broad formulation of their interest in “preventing all forms of discrimination” were sufficient, Defendants have not selected the least restrictive means. Forcing a religious employer to hire, retain, and accommodate employees who conduct themselves contrary to the employer’s views regarding homosexuality and gender identity is not the least restrictive means of promoting that interest, especially when Defendants are willing to make exceptions to Title VII for secular purposes. Therefore, Plaintiffs’ Motion for Summary Judgment on its RFRA claim is GRANTED with respect to Braidwood and the Religious Business-Type Employers Class, and Defendants’ Motion for Summary Judgment on the same is DENIED. The Court need not address Bear Creek Church’s RFRA claim, because the Church falls squarely within the Title VII exemption for religious employers. ***. (pp. 44-47)
4. The First Amendment protects Braidwood from Title VII’s non-discrimination prohibitions:
   • Braidwood argues that the Free Exercise clause also supports an exemption from Title VII, because (1) Defendants have infringed on its religious exercise, (2) by means of a regulation that is not neutral, and (3) lacks a compelling governmental interest to justify the infringement.

     Refresher:The First Amendment to the United States Constitution states that “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof.” U.S. Const. amend. I (emphasis added).

   • Judge O’Connor observed that the SCOTUS has previously held that the Free Exercise Clause “does not exempt an individual from complying with a law that places an incidental burden on religious exercise so long as that law is facially neutral and generally applicable. (citation omitted) The Supreme Court also held that such generally applicable and facially neutral laws would not be subjected to strict scrutiny. (citation omitted) Therefore, if the law at issue is generally applicable, then strict scrutiny does not apply, but if the law is not generally applicable, then the strict scrutiny analysis is triggered.” *** Judge O’Connor then held that: “Because Title VII is not a generally applicable statute due to the existence of individualized exemptions, the Court finds that strict scrutiny applies.”
   • Judge O’Connor then rejected the EEOC’s “strict scrutiny” proof with this holding:

     “Courts must ‘scrutinize the asserted harm of granting specific exemptions to particular religious claimants’ and ‘look to the marginal interest in enforcing’ the challenged government action in that particular context. (citation omitted) Defendants have not articulated how granting specific exemptions for employers like Braidwood will harm the asserted interests (citation omitted) in ‘preventing discrimination.’ Further, the Court finds that they have failed to state how their interest, if it is compelling, is narrowly tailored. Therefore, the Court holds that the Free Exercise Clause of the First Amendment compels Defendants to permit the Religious Business-Type Employers Class to make employment decisions consistent with their cited religious beliefs as embodied in their employment policies in the Title VII context.” (pp. 47-51)

5. Plaintiffs also asserted a First Amendment right to association, including the right to not associate:

   HELD: “…Defendants do not have a compelling interest in forcing Religious Business-Type Employers to hire and retain individuals that engage in conduct that is contrary to the employers’ expressive interests. ‘The Government can no more force an association that opposes homosexuality or transgender behavior to hire individuals engaged in that conduct than it can force a gay-rights organization to hire an avowed opponent of homosexuality.” (citation omitted) Therefore, Plaintiffs’ Motion for Summary Judgment on this claim is GRANTED as to the Religious Business-Type Employer Class. (pp. 51-55)

6. Title VII Makes Unlawful Employer Policies Against Bisexual Conduct:

   HELD: “…the Court must also determine, under Bostock, whether a policy against bisexual conduct targets homosexual or transgender individuals or is not “blind” to sex. Either one whose biological sex and gender identity is the same or a transgender individual could be bisexual, but it is not true that either a homosexual or a heterosexual individual could be bisexual. An individual who is bisexual inherently identifies as homosexual to some extent, even if they also identify as heterosexual, because bisexuality is some combination of the two orientations. (citation omitted) Therefore, the Court concludes that a policy that prohibits only bisexual conduct also inherently targets sex and therefore violates Title VII. Accordingly, Plaintiffs’ Motion for Summary Judgment on this ground is DENIED and Defendants’ Motion for Summary Judgment on this ground is GRANTED.” (pp. 55-65)

7. Title VII Allows Employer Policies Regulating the Sexual Conduct of its Employees:

   HELD: “…Plaintiffs contend their policies—which require their employees to refrain from certain sexual activities, including sodomy, premarital sex, adultery, and any other kind of sexual activity that occurs outside the context of a marriage between a man and a woman—are permitted. Because these prohibitions do not apply exclusively to bar homosexual conduct, the Court finds that so long as the prohibitions apply evenly to men and women, the employer does not favor one biological sex over the other, and therefore does not violate Title VII. Bostock does not protect sexual conduct; it protects employees from being treated differently based on their biological sex, which is an immutable characteristic distinct from sexual conduct itself. (citation omitted) (holding that Bostock does not necessarily extend to “sexual activity”) (“Ordinary speakers of English would say an individual possesses ‘sex’ as a characteristic and that multiple ‘individuals’ can ‘have sex.’ But no one would use ‘such individual’s … sex’ to refer to sexual activity between persons without converting sex into an adjective and appending a noun (‘sexual activity’) or creating a compound noun (‘sex act’).”). Policies that enforce a sexual ethic that applies evenly to heterosexual and homosexual sexual activity do not discriminate “because of” sex. Therefore, Plaintiff’s Motion for Summary Judgment on this ground is GRANTED and Defendants’ Motion for Summary Judgment is DENIED.” (pp. 65-66)

8. Title VII Allows Employer Policies Regulating Dress Code Policies Differentiated by Sex:

   HELD: “Under Braidwood’s sex-specific dress code, both men and women must abide by equally professional, but distinct, standards. (citation omitted) Men are forbidden to wear earrings, but women may. Men who have customer contact must wear a tie; women are not permitted (citation omitted) to wear ties. Women can wear skirts, blouses, shoes with heels, and fingernail polish, (citation omitted) while men are forbidden to wear any of these items. (citation omitted) These rules apply evenly to those who identify with their biological sex and to transgender individuals. Since the policy requires men to wear slacks, a male employee who wears jeans and a male-to-female transgender employee who wears dresses are equally in violation of the rule. (citation omitted) Because the dress code is enforced evenhandedly, unlike its policy regarding hormone treatment which targets transgender individuals, Braidwood’s dress code policy does not violate Title VII. Even so, Defendants argue that transgender individuals deserve special protection under Bostock. On one hand, Defendants assert that an employer should be completely blind to sex, and on the other, they assert that employers should give special preference to individuals who identify as the opposite sex. Defendants cannot have it both ways. Transgender individuals are not a protected class, and the “discrimination” must still link to a biological sex. (citation omitted) A biological male who wishes to dress as a female would be placed in the same position as a biological female who wishes to dress as a male. In the same way, a biological man who wishes to pierce his ears would be in the same position as a biological female who wishes to wear a tie. Moreover, Bostock explicitly reserved judgment on the constitutionality of dress codes. (citation omitted) Therefore, the Court determines that Title VII does not prohibit sex-specific dress codes. Accordingly, Plaintiffs’ Motion for Summary Judgment is GRANTED and Defendants’ Motion for Summary Judgment is DENIED.” (pp. 66-69)

9. Title VII Prohibits Restrictions on Hormone Treatments and Genital Surgery:

   HELD: “Plaintiffs seek a declaration that they can prohibit (1) genital modification surgery and (2) the use of hormone treatments, unless required for a medical condition other than gender dysphoria. (citation omitted) The employers’ prohibition of surgery and hormone treatment would apply only to individuals with gender dysphoria, so on their face, the policies explicitly target transgender individuals. Although men and women would be treated evenly under this policy, the reasoning in Bostock extended Title VII protection to both men and women who are transgender. Therefore, since these policies would only function to discriminate against individuals with gender dysphoria, the Court holds that such policies violate Title VII. Therefore, Plaintiffs’ Motion for Summary Judgment on this ground is DENIED and Defendants’ Motion for Summary Judgment on this ground is GRANTED.” (p. 69)

10. Title VII Allows Employer Policies Prohibiting Employees from Using a Restroom Designated for the Opposite Biological Sex:

    HELD: “Plaintiffs seek a declaration that they may prohibit employees from using a restroom designated for the opposite biological sex. (citation omitted) Defendants maintain that if an individual identifies as the opposite sex, the employer must accommodate. (citation omitted) Again, Bostock does not address this issue, but Defendants read the Supreme Court’s reasoning as empowering it to act as though the distinctions between the two biological sexes no longer exist. If anything, Bostock reinforces the distinction between biological sexes and held that treating one sex worse than the other constitutes sex discrimination. The Supreme Court has long (citation omitted) recognized the need for privacy in close quarters, bathrooms, and locker rooms to protect individuals with anatomical differences—differences based on biological sex. (citation omitted) Like sex-specific dress codes, sex-specific bathrooms do not treat one sex worse than the other. The Court finds that employers may have policies that promote privacy, such as requiring the use of separate bathrooms on the basis of biological sex. Accordingly, Plaintiffs’ Motion for Summary Judgment on this ground must be GRANTED and Defendants’ Motion for Summary Judgment must be DENIED.” (pp. 69-70)

THIS COLUMN IS MEANT TO ASSIST IN A GENERAL UNDERSTANDING OF THE CURRENT LAW AND PRACTICE RELATING TO OFCCP. IT IS NOT TO BE REGARDED AS LEGAL ADVICE. COMPANIES OR INDIVIDUALS WITH PARTICULAR QUESTIONS SHOULD SEEK ADVICE OF COUNSEL.