Federal Contractors, Title VII, and LGBT Employment Discrimination: Can Religious Organizations Continue to Staff on a Religious Basis?

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Fifty-years ago President Johnson signed Executive Order 11246, a venerable civil rights measure prohibiting federal contractors from discriminating in employment on the basis of race, color, religion, sex, or national origin. In July of last year, President Obama signed an executive order adding sexual orientation and gender identity to the list of protected classes that are shielded from such discrimination. An exemption for religious employers appears in the EO at Section 204(c). It was modeled after the two exemptions for religious employers in Title VII of the Civil Rights Act of 1964. Accordingly, the religious exemption in Section 204(c) is expected to be guided by the scope of the two exemptions in Title VII.

The question addressed in this article is whether Section 204(c) exempts religious contractors from the newly protected classes of sexual orientation and gender identity? Because Section 204(c) is tied to the similar exemptions in Title VII, the answer to that question will also impact the many religious organizations that are subject to Title VII even when they have no interest in competing for federal contracts. Accordingly, the issue affects thousands of faith-serving organizations doing ministry in the nature of education, health care, and social services.