The religious organization exemption provides:
This subchapter shall not apply . . . to a religious corporation, association, educational institution, or society with respect to the employment of individuals of a particular religion to perform work connected with the carrying on by such corporation, association, educational institution, or society of its activities.Courts have interpreted this provision to permit a religious employer to discriminate in favor of co-religionists, meaning workers sharing the employer's religious beliefs. For example, a Catholic employer could hire Catholics exclusively, though it could not hire Catholics and Jews exclusively. In addition, courts have interpreted the provision to allow religious employers to discriminate not only against individuals who do not share their religious beliefs but also against individuals whose conduct violates employers' religious beliefs. For example, in Little v. Wuerl, the Third Circuit concluded that the religious organization exception permitted a Catholic employer to fire an employee because her remarriage violated the employer's religious views.
Not surprisingly, because the exception merely allows a religious employer to discriminate based on religion, it does not sanction other forms of discrimination, such as sex discrimination. Thus, in EEOC v. Fremont Christian School, the court held that the exception did not authorize the defendant to provide a benefit to heads of households, which, based on the defendant's religious beliefs, could only be single persons and married men.
Relying on the interpretation of Title VII in cases like Fremont Christian School, some courts have concluded that a religious organization is not permitted to favor co-religionists if that means also discriminating on a prohibited basis other than religion. For example, in Richardson v. Northwest Christian University, Federal District Court Judge Ann Aiken relied on the interpretation of Title VII in Fremont Christian School to conclude that a similar religious organization exception under Oregon law did not permit the employer to discriminate against an employee for engaging in premarital sex, because doing so violated the state law's prohibition against marital status discrimination.
Similarly, in a 2015 law review article, George Washington University Law Professor Ira Lupu argues that Title VII's religious organization exception does not permit a religious employer to discriminate against gay men and lesbians. As an analogy, Lupu notes that an Orthodox Jewish employer would not be permitted to fire women who broke the Sabbath while overlooking the same conduct by male employees.
Although the ultimate conclusion that Title VII prohibits religious organizations from discriminating based on sexual orientation may be a viable interpretation of Title VII, the reasoning followed by Judge Aiken and Professor Lupu in reaching that conclusion is flawed. At bottom, it is correct that the religious organization exception does not authorize discrimination on a basis other than religion, and that is reflected in Fremont Christian School and Lupu's example of the Orthodox Jewish employer. Crucially, however, those cases merely involve sex discrimination and do not also involve religious favoritism. Thus, the question that must be answered is, Does Title VII permit an employer to engage in religious favoritism if, in so doing, it also engages in another form of prohibited discrimination under the statue, such as sex discrimination?
Considering the language and structure of Title VII, I think the better argument is that a religious organization is permitted to discriminate based on sexual orientation if the discrimination is based on religious objections to homosexuality. The exception states that Title VII does not apply when a religious organization engages in religious favoritism. An action that falls within the exception would therefore seem to be outside the bounds of Title VII, regardless of whether it would otherwise be prohibited by other provisions. Thus, once the exception applies, that's the end of the story, and there is no need to consider whether the action would simultaneously violate another provision since the exception has already established that Title VII does not apply.
On the other hand, if religious favoritism entails discrimination on a basis other than religion, then arguably the employer's right to engage in religious favoritism must be weighed against an employee's right to be protected against sex discrimination. In my view, however, the balance was struck by Congress when it provided that Title VII does not apply to instances of religious favoritism.
This blog reflects the views solely of its author. It is not intended, and should not be regarded, as legal advice on how to analyze any particular set of facts.