In a 6–3 decision, the United States Supreme Court on June 15, 2020, ruled that an employer who fires an individual for being homosexual or transgender engages in “sex” discrimination in violation of Title VII of the Civil Rights Act of 1964.

This article will review the facts of the case, summarize the Court’s decision, and assess its significance to churches and other religious organizations.

The case involved three plaintiffs.

One plaintiff worked for a Georgia county as a child welfare advocate. Under his leadership, the county won national awards for its work. After a decade with the county, he began participating in a gay recreational softball league. Not long after that, influential members of the community allegedly made disparaging comments about his sexual orientation and participation in the league. Soon, he was fired for conduct “unbecoming” a county employee.

The second plaintiff worked as a skydiving instructor in New York. After several seasons with the company, he mentioned that he was gay and, days later, was fired.

The third plaintiff worked for a funeral home. When she got the job, she presented as a male. But two years into her service with the company, she began treatment for despair and loneliness. Ultimately, clinicians diagnosed her with gender dysphoria and recommended that she begin living as a woman. In her sixth year with the company, she wrote a letter to her employer explaining that she planned to “live and work fulltime as a woman” after she returned from an upcoming vacation. The funeral home fired her before she left, telling her “this is not going to work out.”

Each plaintiff brought suit under Title VII, which prohibits employers with at least 15 employees from discriminating in any employment decision on the basis of race, color, national origin, sex, or religion. A federal appeals court dismissed the first plaintiff’s case on the ground that Title VII’s ban on “sex” discrimination did not extend to sexual orientation. But another federal appeals court ruled that the second plaintiff could pursue his discrimination claim since Title VII’s ban on sex discrimination in employment did encompass sexual orientation. And a third federal appeals court allowed the third plaintiff’s discrimination claim to proceed for the same reason. All three cases were appealed to the United States Supreme Court.

The Supreme Court sided with the two appeals courts that interpreted Title VII’s ban on sex discrimination to include sexual orientation and gender identity. Title VII states that it is “unlawful . . . for an employer to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s race, color, religion, sex, or national origin.”

The Court concluded that an employer that fires an employee merely for being gay or transgender violates Title VII’s ban on sex discrimination.

What is the relevance of the Court’s ruling to churches and other religious organizations, including schools? Consider the following points.

Title VII section 702 contains the following exemption for religious organizations:

This provision permits religious corporations and educational institutions to discriminate on the basis of religion in the employment of any person for any position.

As originally enacted, section 702 permitted religious employers to discriminate on the basis of religion only in employment decisions pertaining to their “religious activities.” Congress amended section 702 in 1972 to enable religious organizations to discriminate on the basis of religion in all employment decisions. In the years following the 1972 amendment, a number of federal courts suggested that the amendment violated the First Amendment’s nonestablishment of religion clause. But in 1987, the United States Supreme Court resolved the controversy by ruling unanimously that section 702 did not violate the First Amendment’s nonestablishment of religion clause. Corporation of the Presiding Bishop of the Church of Jesus Christ of Latter-Day Saints v. Amos, 483 U.S. 327 (1987).

Note that religious organizations are exempt only from the ban on religious discrimination in employment. They remain subject to Title VII’s ban on employment discrimination based on race, color, national origin, or sex—except with respect to employment decisions involving clergy.

Churches that take an adverse action against an employee or applicant for employment based on religious considerations should describe their action appropriately. Refer to the religious or doctrinal principle at issue, and avoid generic labels like “sex” or other gender- or sexuality-based labels.

Title VII only applies to employers engaged in interstate commerce and having 15 or more employees. The courts have defined “commerce” very broadly, and so most churches will be deemed to be engaged in commerce. Note that most states have also enacted their own employment discrimination laws that eliminate the commerce requirement and generally apply to employers with fewer than 15 employees.

In 2012, a unanimous United States Supreme Court affirmed the so-called “ministerial exception” which bars the civil courts from resolving employment discrimination disputes between churches and ministers. The Court concluded:

This means that all discrimination disputes involving clergy are off limits to the civil courts, not just those involving religious discrimination, including those alleging discrimination based on sexual orientation or transgender status.

Title VII contains three religious exemptions for religious schools. The first, quoted above, is section 702. In addition, Title VII, Section 703(e)(2), of the Civil Rights Act of 1964 specifies:

A federal appeals court interpreted this language as follows in a case involving a discrimination lawsuit brought against Samford University by a theology professor:

The court quoted from another federal court ruling construing section 703(e)(2), Pime v. Loyola University of Chicago, 803 F.2d 351, 357 (7th Cir.1986):

The court concluded that Samford is “in substantial part” “supported” by the Convention:

A federal appeals court concluded that Title VII’s exemption of “religious institutions” from the ban on religious discrimination in employment applied to the school. It based this conclusion on the following considerations: (1) the university was established as a “theological” institution. (2) The university’s trustees are all Baptists. (3) Nearly 7 percent ($4 million) of the university’s budget comes from the Alabama Baptist Convention (the “Convention”)—representing the university’s largest single course of funding. (4) The university submits financial reports to the Convention, and its audited financial statements are made available to all Baptist churches in Alabama. (5) All university professors who teach religious courses must subscribe to the Baptist “statement of faith,” and this requirement is clearly set forth in the faculty handbook and in faculty contracts. (6) The university’s charter states that its chief purpose is “the promotion of the Christian religion.” (7) The university is exempt from federal income taxes as a “religious educational institution.”

Responding to concerns the Court’s June 15, 2020, decision “will sweep beyond Title VII to other federal or state laws that prohibit sex discrimination. And, under Title VII itself, they say sex-segregated bathrooms, locker rooms, and dress codes will prove unsustainable after our decision today.” The Court responded:

The employers also expressed concern that the Court’s decision may require some employers to violate their religious convictions. The Court responded:

Justice Alito issued a dissenting opinion in which he noted, in part:

The November 2019 Church Law & Tax Advantage Member article previewed the cases before the United States Supreme Court and included five steps that churches and religious organizations holding traditionally orthodox views of human sexuality could take if the Court decided to expand the definition of “sex” under Title VII.

This article was adapted exclusively for Church Law & Tax Advantage Members from the 50-State Religious Freedom Laws Report, a downloadable resource available on ChurchLawAndTaxStore.com. Advantage Members who log in to the store receive 20-percent off of their purchase.

The First Amendment to the United States Constitution says, “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof.” This language has been foundational to the religious liberty that millions of people have enjoyed in this country for nearly 250 years.

In those nearly 250 years, though, two key developments have unfolded through numerous decisions made in our nation’s courts.

First, the protection of religious belief is considered absolute. The government cannot make an individual or church believe—or not believe—something, nor can it create or enforce a law attempting to do so.

But second, the protection of religious exercise has limitations. Individuals and churches are free to believe whatever they wish, but when actions associated with those beliefs begin to clash with the rights and interests of others, courts say the government has more power to regulate.

This latter point—the limitations on religious exercise—has been a source of much debate and disagreement in American society, especially throughout the second half of the 20th century and the early part of the 21st century. For many, religious belief and religious exercise are inseparable, and the ability for the government to regulate religious exercise constitutes an attack on their constitutionally protected beliefs. For others, religious exercise left unchecked represents threats to the rights of others who do not share those same beliefs.

This clash has led to a maze of laws and court decisions across the country that raise a number of questions regarding how far religious freedoms extend. Understanding these developments—and their ramifications—is the purpose of this article, adapted from the 50-State Religious Freedom Laws Report.

When a government law or action intentionally targets religious exercise, courts apply a high standard of judicial review known as “strict scrutiny.” This means when a party’s free exercise rights have been burdened by such intentional targeting, the government bears the burden of showing the law or action is both necessary to advance a compelling government interest and was crafted in the least-restrictive manner possible. This high standard makes it challenging for the law or action to be upheld, making it a significantly valuable protection to the free exercise rights of individuals, churches, and organizations.

For years, this high standard also was used by courts to evaluate neutral laws of general applicability when they happened to burden religious exercise. In other words, when a neutral law incidentally (not intentionally) interfered with an individual or party’s free exercise rights, the government still had to meet the burden of showing the law possessed a compelling government interest and was advanced in the least-restrictive way. Again, this same high standard offered significant protection to the free exercise rights of individuals, churches, and organizations.

However, in 1990, the US Supreme Court issued a controversial decision in a case called Employment Division v. Smith, 494 U.S. 872 (1990). Through this decision, the Court’s majority held that neutral laws—and the application of these laws—did not need to be justified by a compelling government interest and in the least-restrictive way possible whenever religious exercise was burdened. This conclusion made it more likely that a neutral law (or an action related to that law) could remain constitutionally valid, even when it burdened a party’s religious exercise.

The ensuing controversy from this decision prompted federal legislators to act. In 1993, a near-unanimous Congress responded to Smith by passing the Religious Freedom Restoration Act (RFRA), which aimed to restore the compelling government interest/least-restrictive means standard for evaluating neutral laws, and their application, when their effects on religious exercise came into question.

The passage of RFRA, hailed as a victory by religious liberty advocates, stabilized the situation—but only temporarily. Confusion and concern returned in 1997 when the Supreme Court decided a case called City of Boerne v. Flores, 521 U.S. 507 (1997). The Court’s majority concluded Congress overstepped its legislative powers with RFRA when it attempted to apply it both at the federal level and to the local and state levels. The Constitution, the Court’s majority noted, only gives Congress the power to make laws addressing federal laws and activities.

As a result, City of Boerne rendered the federal RFRA moot when it comes to laws and actions at the local and state levels.

Following this decision, some states—but not all—began adopting their own versions of RFRA, each designed to establish a compelling government interest/least-restrictive means standard for evaluating substantial burdens incidentally placed on religious exercise by neutral laws or actions. In some states where a RFRA has not been adopted, a high-level court has issued a decision mirroring the federal RFRA’s standards. In other states, though, a high-level court has decided the standard announced through the 1990 Smith decision should be used. And in about a dozen other states, no law or court decision announces a specific standard to follow, making it difficult to predict whether a church, organization, or individual can prevail in a religious exercise claim against a local or state government.

Also in 1993, a separate Supreme Court decision in a different case—Church of the Lukumi Babalu Aye v. City of Hialeah, 508 U.S. 520 (1993)—further defined the standards with which all courts should evaluate attempts by the government to regulate religious exercise. The Court’s decision acknowledged there still can be times when a law or regulation appears on the surface to be neutral, but in actuality still intentionally targets religious activity—and thus still deserves “strict scrutiny.”

In Lukumi, the Court determined the city’s ordinance, though described on the surface to be a neutral law of general applicability, was really designed to halt the animal sacrifice practices of a local church. The Court reached this conclusion by noting the city ordinance exempted other, similar types of conduct carried on by secular entities (e.g., butchers), and by noting the notes and transcripts recorded during the adoption of the ordinance showed city councilmembers intended to specifically address the church’s activities.

Because the ordinance was not truly neutral, and targeted religious activity, the Court said the strict scrutiny standard of review applied. It then deemed the ordinance unconstitutional, finding the ordinance did not advance a compelling government interest in the least-restrictive manner possible.

For churches, the First Amendment—or their state’s constitutional equivalent—should be the first line of defense when government laws or actions intersect with their activities.

But the presence of the federal RFRA, a state RFRA, or a judicially created RFRA-like protection is important to note. When a RFRA or RFRA-like protection exists, it may offer a church additional protections if it faces a claim arguing it falls under a neutral law of general applicability at the local, state, or federal level and violated it—and the applicability of the First Amendment or state constitution is unclear.

Church leaders always should consult with qualified local counsel in the event it potentially faces any local, state, or federal actions, or a civil lawsuit by a private party.

The 50-State Religious Freedom Laws Report is designed to help individuals and churches understand the protections available to them based upon where they live and operate. Below is a chart, based on information from the resource, detailing which states have a RFRA or a high-level court decision addressing religious exercise. The remainder of the resource provides individual state reports containing additional insights. This additional information is useful for churches and church leaders as they seek to understand how legal protections for their religious exercise operate based upon where they are located.

Of note: