In Braidwood Mgt. v. EEOC, No. 22-10145 (5th Cir. June 20, 2023), the Fifth Circuit holds that a for-profit “Christian” business and a non-denominational Christian church suffered a concrete injury from prospective enforcement of a guidance by the federal Equal Employment Opportunity Commission (EEOC) sufficient to support Article III standing.
The guidance at issue is the EEOC’s June 2021 technical assistance document on LGBTQ workplace discrimination protections under Title VII of the Civil Rights Act. It is the EEOC’s interpretation of the recent Supreme Court decision in Bostock v. Clayton Cnty, Ga., 140 S. Ct. 1731 (2020), holding that the Title VII prohibition of sex discrimination includes discrimination against gay, lesbian, and transgender persons. The guidance has been met with vociferous opposition by religious conservatives and is the subject of multiple federal lawsuits.
Plaintiff Braidwood Management is a for-profit, closely-held business, operated as a trust and headed by an avowedly Christian trustee. It employs some seventy people. (Braidwood, in addition to challenge the EEOC guidance in this case, is also a litigant in another current Fifth Circuit case challenging the Affordable Care Act.) Bear Creek Bible Church employs at least fifteen people. Both are thereby employers covered by Title VII. Braidwood and Bear Creek have hiring and personnel policies that are hostile to LGBTQ individuals, including prohibitions against hiring persons in same-sex marriages, sex-specific wardrobe standards, rules about which bathrooms one may use, and heteronormative codes of sexual conduct.
“As per their closely held religious beliefs, Braidwood and Bear Creek assert that Title VII, as interpreted in the EEOC’s guidance and Bostock, prevents them from operating their places of employment in a way compatible with their Christian beliefs. These two plaintiffs have implicitly asserted that they will not alter or discontinue their employment practices. And all parties admitted in district court that numerous policies promulgated by plaintiffs (such as those about dress codes and segregating bathroom usage by solely biological sex) already clearly violate EEOC guidance.”
The employers filed a putative class action for declaratory judgment on behalf of religious employers, seeking a decree establishing broad limits and exemptions from Title VII regarding LGBTQ employees:
“1. The Religious Freedom Restoration Act compels exemptions to Bostock’s interpretation of Title VII (‘RFRA claim’);
“2. The Free-Exercise Clause compels exemptions to Bostock’s interpretation of Title VII (‘free exercise claim’);
“3. The First Amendment right of expressive association compels exemptions to Bostock’s interpretation of Title VII (‘expressive association claim’);
“4. Title VII, as interpreted in Bostock, does not prohibit discrimination against bisexual employees (‘bisexual orientation claim’);
“5. Title VII, as interpreted in Bostock, does not prohibit employers from establishing sex-neutral rules of conduct that exclude practicing homosexuals and transgender people from employment (‘sex-neutral rules of conduct claim’).”
The district court held that it had jurisdiction over the case and certified a class of Christian employers. It dismissed Bear Creek’s claims (an order that the Fifth Circuit upholds on appeal) on the ground that Title VII already granted religious institutions an exemption under 42 U.S.C. § 2000e-1(a), and thus declaratory relief was unwarranted. As to Braidwood and the class of Christian employers, though, the district court granted classwide relief on claims 1-3 listed above. It held that the EEOC lacked a compelling interest and did not consider less restrictive means under RFRA to enforce LGBTQ employment rights against religious business owners without exemptions.
The Fifth Circuit holds that the plaintiff employers have Article III standing to seek declaratory relief against the EEOC’s technical assistance document.
The EEOC argued that any injury to the employers was speculative because of the number of hoops that the agency would need to jump to take action against them: “It notes that before an EEOC enforcement action can proceed, (1) a plaintiff must employ or receive an application from an individual against whom it would subject to what the EEOC considers an adverse employment action; (2) the plaintiff must subject the employee to an adverse employment action; (3) the employee would have to file a charge with the EEOC, and finally, (4) the EEOC would have to exercise its discretion to pursue said action.” It underscored that the agency historically “takes religious defenses seriously.” It notes that the plaintiffs identified only one case where the agency had ever filed an action against a Christian employer to enforce LGBTQ rights, EEOC v. R.G. & G.R. Harris Funeral Homes, Inc., 884 F.3d 560 (6th Cir. 2018), aff’d sub nom. Bostock v. Clayton County, 140 S. Ct. 1731 (2020) (Harris).
But the panel holds that the EEOC’s guidance has present effects on the employers. “First, [the plaintiff employers] admit they are breaking EEOC guidance, which the EEOC does not seriously contest. They posit statutory and constitutional issues with the laws under which they are at risk of being prosecuted: Those issues, they allege, are already forcing plaintiffs to choose either to restrict their religious practices or to risk potential penalties. And the EEOC’s actions in Harris, which the EEOC won under a less violative set of facts, indicate that plaintiffs, too, have a legitimate fear of prosecution, chilling their rights . . . . Plaintiffs’ policies mirror and, in many respects, go further than those of the employer in Harris. Thus, Harris shows that the EEOC may actively enforce Title VII in situations like plaintiffs’.”
Ultimately, the Fifth Circuit holds, the record contains all of the facts necessary to adjudicate the claims. “We know what the EEOC says violates its guidance and the law; we know what Braidwood’s exact policies are; and we have admissions from the EEOC that Braidwood’s current practices violate Title VII. Per Harris, we have evidence that the EEOC has brought an enforcement action against a similar violator. No party contests the facts or requests additional information to be presented to the court. There is remarkably little else needed to adjudicate the issue.” (For similar reasons, the panel also holds that the plaintiffs’ claims are ripe under Article III.)
On the merits, the panel vacates the class certification, holding that classes were “impermissibly vague” and subjective, and that there were no common questions of law or fact. It nevertheless “decide[s] that RFRA requires that Braidwood, on an individual level, be exempted from Title VII because compliance with Title VII post-Bostock would substantially burden its ability to operate per its religious beliefs about homosexual and transgender conduct.”
The panel finally holds under the RFRA rubric that the agency “does not show a compelling interest in denying Braidwood, individually, an exemption. The agency does not even attempt to argue the point outside of gesturing to a generalized interest in prohibiting all forms of sex discrimination in every potential case. Moreover, even if we accepted the EEOC’s formulation of its compelling interest, refusing to exempt Braidwood, and forcing it to hire and endorse the views of employees with opposing religious and moral views is not the least restrictive means of promoting that interest.” It thus affirms summary judgment in favor of Braidwood.
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