Executive Order 11246 requires affirmative action and prohibits federal contractors from discriminating on the basis of race, color, religion, sex, sexual orientation, gender identity, or national origin. (Contractors also are prohibited from discriminating against applicants or employees because they inquire about, discuss, or disclose their compensation or that of others, subject to certain limitations.) Title VII of the Civil Rights Act of 1964, prohibits employment discrimination based on race, color, religion, sex and national origin.
There is a limited exemption in Title VII for religious organizations to give hiring preference to members of their own religion. This exemption was carried over to E.O. 11246.
Despite the exemptions for religious organizations in Title VII and E.O. 11246 and the myriad court cases that developed related standards, the U.S. Department of Labor in December 2020 adopted a rule “Implementing Legal Requirements Regarding the Equal Opportunity Clause’s Religious Exemption,” which was billed as an effort to clarify the applicable rules.
The U.S. Department of Labor has now rescinded the December 2020 rule. As the Labor Department put it in their press release, “The rescission ensures a return to the department’s prior policy and practice in place during the presidencies of George W. Bush and Barack Obama – of interpreting and applying the religious exemption in Executive Order 11246 consistent with Title VII principles and case law.” The Office of Federal Contract Compliance Programs (OFCCP) explained in their FAQ on the subject that there was a need to return to prior standards, because the December 2020 rule “resulted in increased uncertainty about the religious exemption because of its divergence from the approach to the Title VII religious exemption taken by courts and the Equal Employment Opportunity Commission, as well as from OFCCP’s past practice.”
As the Agency noted, “OFCCP is rescinding the entire rule to return to the agency’s prior approach of aligning the Executive Order 11246 religious exemption with Title VII case law as applied to the facts and circumstances of each case. The rescission preserves the Executive Order 11246 religious exemption and does not change religious entities’ ability to pursue federal contracts.:
This firm frequently represents organizations across a range of affiliations and denominations that qualify for the religious exemption in Title VII, federal contractors that qualify for the religious exemption in the regulations implementing E.O. 11246, and organizations with activities that fit within the “ministerial exception” to the First Amendment. If your organization would benefit from additional information or assistance about any of these topics, please contact us.