The Equal Employment Opportunity Commission (EEOC) voted on January 15, 2021, to finalize long-awaited revisions to its Compliance Manual chapter covering religious discrimination in the workplace and addressing exemptions for religious employers. The revised guidance—last updated in 2008—takes into account recent court decisions and flags a handful of emerging issues.

Title VII’s Religious Employers’ Exemption

The revised Compliance Manual features an expanded section discussing Title VII’s codified exemption for religious organizations, sometimes called the “702” exemption because of its section number in the Civil Rights Act of 1964. The new guidance lays out nine factors for evaluating whether an organization qualifies for the exemption but notes that the EEOC will apply a case-by-case, “all the facts” analysis whenever the exemption is invoked. Notably, the manual explicitly leaves open the possibility that some for-profit organizations could fall within the exemption’s scope.

The guidance explains that, while qualifying religious organizations remain subject to Title VII’s prohibitions against discrimination on the basis of race, color, sex, and national origin, they may raise the exemption as an affirmative defense—that is, the organization may assert that it made the challenged employment decision on the basis of religion. The new guidance clarifies that “the exemption allows religious organizations to prefer to employ individuals who share their religion, defined not by the self-identified religious affiliation of the employee, but broadly by the employer’s religious observances, practices, and beliefs.” According to the EEOC, this permits religious organizations to terminate or refuse to hire a worker “whose conduct or religious beliefs are inconsistent with those of its employer.” It remains to be seen how the commission will apply this language to situations where, for instance, religious organizations prohibit employees from engaging in sexual conduct outside the confines of traditional marriage.

Ministerial Exception

The revised manual includes a lengthy treatment of the so-called “ministerial exception,” incorporating the Supreme Court’s decisions in Hosanna-Tabor Evangelical Lutheran Church and School v. EEOC (2012) and Our Lady of Guadalupe v. Morrissey-Berru (2020). The ministerial exception is a constitutional doctrine that prohibits the government from interfering in disputes between a religious institution and certain employees who perform vital religious duties at the core of the institution’s mission.

The guidance points out that, unlike the statutory exemption described above, “the ministerial exception applies regardless of whether the challenged employment decision was for ‘religious’ reasons.” Moreover, “[t]he ministerial exception is not limited to the head of a religious congregation, leaders, ministers, or members of the clergy, and can apply to ‘lay’ employees and even non-‘co-religionists’ or those not ‘practicing’ the faith.” Embracing the Supreme Court’s broad interpretation of the exception, the revisions state that “what matters, at bottom, is what an employee does” and that a religious institution’s “definition and explanation” of the employee’s religious role is important.

Additional Changes

A completely new section in the Compliance Manual flags the interaction between Title VII and the Religious Freedom Restoration Act (RFRA) as an “evolving area of the law,” stressing the need for “nuanced balancing” of religious burdens and government interests.

Turning to Title VII’s prohibition on religious discrimination—i.e., for employers not covered by the religious exemption—the new guidance gives special attention to the issue of religious expression in the workplace, advising employers to “allow religious expression among employees at least to the same extent that they allow other types of personal expression that are not harassing or disruptive to the operation of the business.” As a limiting principle, an employer need not tolerate religious expression “that is unwelcome potential harassment based on race, color, sex, national origin, religion, age, disability, or genetic information, or based on its own internal anti-harassment policy.” Consistent with recent guidance from the OFCCP, however, the manual now explains that “[m]ere subjective offense or disagreement with unpopular religious views or practices by coworkers is not sufficient to rise to the level of unlawful harassment.”

Conclusion

All told, the revised Compliance Manual—which governs EEOC operations but lacks the force of law— appears to offer broad protections for religious employers and employees. While the new administration may have reservations about the breadth of some of these protections, the finalized guidance is likely to remain in place until at least mid-2022, when President Biden will have his first opportunity to replace a Republican member of the commission.