A recent case from the U.S. 5^th Circuit Court of Appeals, Braidwood Management, Inc. v. Equal Employment Opportunity Commission, No. 22-10145 (5th Circuit Court of Appeals, 6/20/23), has opened the door for a possible super statute that can override the 1964 Civil Rights Act. In other words, a company who may be a for-profit but with a religious bent, think Hobby Lobby, could discriminate in hiring, for example, against someone of the LGBTQ community, a mother out of wedlock, and more.   Currently, the U.S. 6^th Circuit of Appeals (which includes Michigan) does not permit this, but there is now a split among circuits meaning that the Braidwood case could go to the Supreme Court where a ruling can go either way.

So, what is the issue?  Braidwood is a management company that employs the workers of Hotze Health & Wellness Center, Hotze Vitamins, and Physicians Preference Pharmacy International LLC. Steven Hotze controls or owns the business entities and is the sole trustee and beneficiary of the trust that owns Braidwood. He is also the sole board member of Braidwood, serving as President, Secretary, and Treasurer. Braidwood has close to 70 employees who work at those entities.

Hotze runs his corporations as “Christian” businesses—to-wit, he does not permit Braidwood to employ individuals who engage in behavior he considers sexually immoral or gender non-conforming, nor does he allow Braidwood to recognize homosexual marriage. To Hotze, that would “lend approval to homosexual behavior and make him complicit in sin.” Hotze also gives a nonreligious reason for refusing to recognize same-sex marriage: He will not allow Braidwood to recognize same-sex marriage because Texas continues to define marriage in heterosexual terms.

Braidwood enforces a sex-specific dress code that disallows gender-non-conforming behavior. For example, “biological” men must wear professional attire, including a tie, if they have contact with customers. On the other hand, “biological” women may not wear a tie but may wear skirts, blouses, shoes with heels, and fingernail polish; men are forbidden from wearing those accessories, because “cross-dressing” is strictly forbidden. Hotze also does not allow Braidwood employees to use a restroom opposite their biological sex, regardless of any asserted gender identity. There is no evidence of any job applicant or employee of Braidwood who has claimed discrimination against under these policies.

The U.S. Supreme Court’s Bostock decision that ruled the LGBTQ community is protected under Title VII of the 1964 Civil Rights Act under the definition of “sex” was an irksome decision for Braidwood because of Hotze’s and eventually Braidwood’s “religious beliefs.”

Braidwood then sued the EEOC for a declaratory judgement to determine the following:

1. The Religious Freedom Restoration Act compels exemptions to Bostock's interpretation of Title VII (“RFRA claim”);
2. The Free-Exercise Clause compels exemptions to Bostock's interpretation of Title VII (“free exercise claim”);
3. The First Amendment right of expressive association compels exemptions to Bostock's interpretation of Title VII (“expressive association claim”);
4. Title VII, as interpreted in Bostock, does not prohibit discrimination against bisexual employees (“bisexual orientation claim”); and
5. Title VII, as interpreted in Bostock, does not prohibit employers from establishing sex-neutral rules of conduct that exclude practicing homosexuals and transgender people from employment (“sex-neutral rules of conduct claim”).

Although there were a number of issues that the court had to initially settle, such as standing and whether the issues could be heard by the court, the court ruled in Braidwood’s favor.  Therefore, the crux of the case was able to be determined by the court:  the RFRA is a defense for noncompliance with Title VII’s prohibitions on sex discrimination.

The Fifth Circuit agreed with Braidwood that the RFRA is a defense for noncompliance with Title VII’s prohibitions on sex discrimination. According to Braidwood, employing an individual who engages in same-sex relationships or expresses their transgender identity, even in private, is a tacit endorsement of the individual’s conduct that violates Braidwood’s religious practice.  But there was no discussion whether this is a sincerely held religious belief.   In the end, the Fifth Circuit held that Braidwood’s choice between complying with Title VII’s prohibitions on sex discrimination or violating its religious beliefs substantially burdens Braidwood’s ability to practice its religious beliefs and is exempt from Title VII requirements.

It should be noted that this approach appears to be consistent with the Supreme Court in the ACA case in the Hobby Lobby case concerning the requirement under the ACA and contraception. 

This reasoning, although agreed with by the 5^th Circuit, was not accepted by the 6^th Circuit.  The Harris case (which concerned transexual discrimination at R.G. & G.R. Harris Funeral Homes), which was combined and heard by the U.S. Supreme Court in the Bostock case, held that being at odds with another’s conception of sex and gender identity is not a substantial burden under RFRA. 

Assuming that the Braidwood case is appealed, it will be interesting to see whether the Supreme Court, under its new composition since Bostock, will weaken the Title VII protections.  The recent Supreme Court Creative case, although a public accommodation case which seems to prioritize the 1^st amendment over the 14^th amendment of equal protections, tends to suggest the Supreme Court will rule similar to the Fifth Circuit – with RFRA being a “super” law, even if Justice Gorsuch, the author of the Bostock decision, moves with the liberal justices in the case.

 Source: Seyfarth Shaw 7/17/23