At the time of the June 30, 2014 Burwell v. Hobby Lobby, Inc. decision from the United States Supreme Court, many employment law experts and practitioners recognized that the Court’s decision to let Hobby Lobby opt out of portions of the Affordable Care Act (aka Obamacare) on religious grounds could lead to a litany of lower court decisions addressing employers’ desires to opt out of other employment laws on religious grounds. We now have such a case. Yesterday, August 18, 2016, in a decision out of the U.S. District Court for the Eastern District of Michigan, a judge held that the employer in the case was exempt from a law prohibiting gender discrimination based on the employer’s religious beliefs. What further makes this case interesting is that it was brought by the EEOC as one of its first lawsuits on behalf of a transgender employee.
The employer in the case was a funeral home that on its website stated its “highest priority is to honor God in all that we do as a company and as individuals…” There were numerous other religious comments and significant testimony regarding the owners’ religious beliefs. The employee was a transgender employee who was biologically born a male but wished to dress as a woman. The EEOC sued under Title VII of the Civil Rights Act of 1964, which prohibits discrimination based on gender stereotyping (Note: We will have a post out soon about the EEOC’s efforts to include LGBTQ protection under traditional gender discrimination protection). The Court held that the 1993 Religious Freedom Restoration Act, as interpreted by the Hobby Lobby decision, permitted the employer to discriminate against the employee due to the closely held company’s sincere religious beliefs.
This is just a single decision from a lower court in Michigan but it could be the start of further decisions and the start of further appeals back to the Supreme Court. For now, at least, it appears that closely-held companies with sincerely-held religious beliefs may have grounds for exemption from various discrimination and harassment protections currently available to employees. We will keep you updated.