Dive Brief:

• The U.S. Department of Labor's Office of Federal Contract Compliance Programs (OFCCP) published a final rule Dec. 9 that expands the scope of a religious discrimination exemption for federal contractors established in Executive Order No. 11246.
• The executive order, originally issued in 1965 and later amended, prohibits federal contractors and subcontractors from discriminating against employees or job applicants on the basis of certain protected characteristics. This requirement does not apply to a contractor or subcontractor that is a "religious corporation, association, educational institution, or society," an exemption that "springs directly" from Title VII of the 1964 Civil Rights Act, OFCCP said.
• The final rule updates the exemption to define a contractor or subcontractor's "particular religion," which includes "acceptance of or adherence to sincere religious tenets as understood by the employer as a condition of employment, whether or not the particular religion of an individual employee or applicant is the same as the particular religion of his or her employer or prospective employer." The rule further amends the definition of religious corporation, association, educational or society to include for-profit organizations and other organizations whose purpose "is substantially religious."

Dive Insight:

The rule is a long-awaited update to a proposal initially published by the Trump administration in 2019, and it is also the latest action taken by the administration to further expand employment law protections for religious organizations.

Critics of the initial proposal claimed it would weaken federal anti-discrimination protections. For example, a September 2019 letter to OFCCP from the American Civil Liberties Union claimed the initial proposal would "open the door to government contractors seeking to discriminate" while creating "significant harm and confusion for myriad federal contractors, their employees, and the government entities charged with enforcement."

In a statement announcing the final rule, OFCCP said the rule would not exempt religious organizations from all nondiscrimination requirements. Additionally, the regs "do not permit religious organizations to make employment decisions on bases otherwise protected by law, including race, color, sex, sexual orientation, gender identity, national origin, disability, or status as a protected veteran," the agency said.

While the rule provides some clarity for employers, it remains to be seen how OFCCP will evaluate individual cases, attorneys with law firm Wiley said in a Dec. 10 alert. Moreover, the incoming Biden administration may address the rule as part of next year's presidential transition, the attorneys said.

The Trump administration has indicated it will pursue regulatory updates regarding religious discrimination at other federal agencies, including the U.S. Equal Employment Opportunity Commission, which in November proposed new religious discrimination guidance.