Appeals court rules religious employer exemption does not cover sex bias, in Catholic Relief Services spouse benefits case
A divided Fourth Circuit panel held Oct. 16 that Title VII's exemption lets religious employers favor members of their faith but not discriminate by sex, and that the agency broke the law by ending coverage for an employee's husband.
Richmond. A divided federal appeals court ruled Oct. 16 that the religious employer exemption in Title VII of the Civil Rights Act covers only religious discrimination claims, not sex discrimination claims, and that Catholic Relief Services broke the law when it ended health coverage for an employee's husband.
The 2-1 decision of the U.S. Court of Appeals for the Fourth Circuit binds federal courts in Maryland, Virginia, West Virginia, North Carolina and South Carolina. Catholic Relief Services is an overseas relief agency governed by the U.S. Conference of Catholic Bishops.
What the court decided
The employee, a data analyst who sued as John Doe, told a recruiter at a 2016 job fair that he was gay and married and was told his husband would be covered. Five months later, the agency said the enrollment was a mistake because covering his husband was contrary to its religious values. He declined another pay arrangement and the coverage ended. The parties agreed on $60,000 in damages if the agency lost.
Section 702 of Title VII says the law does not apply to a religious organization "with respect to the employment of individuals of a particular religion." Senior Judge Henry F. Floyd, joined by Judge James Andrew Wynn, wrote that it lets such employers prefer members of their faith but does not reach discrimination based on sex, race or national origin, even when religious belief also drives the decision. Ending a man's coverage for his husband, the court held, is sex discrimination.
The majority rejected a broader reading set out by Judge Frank Easterbrook concurring in Starkey v. Roman Catholic Archdiocese of Indianapolis, a 2022 Seventh Circuit case, and adopted in a concurrence in Fitzgerald v. Roncalli High School in 2023. Both cases were decided under the ministerial exception, which the agency did not invoke here.
The court also rejected defenses under the First Amendment and the Religious Freedom Restoration Act, which it held does not apply in suits between private parties, and held that the employee's data work fell outside Maryland's religious employer exemption. It affirmed U.S. District Judge Julie R. Rubin's judgment and dismissed as moot the appeal on an Equal Pay Act claim.
The dissent
Judge A. Marvin Quattlebaum Jr. wrote that courts may not review a religious organization's conduct based on its faith and that Title VII "expressly excludes employment decisions based on religion."
“In a decision stunningly restrictive of religious freedom, the majority sides with Doe.”
The majority answered that religious organizations keep "complete autonomy" over employees who communicate their religious teachings and may require others to follow religious doctrine so long as the requirements do not discriminate on the basis of race, sex or national origin.
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