U.S. court leery of blocking LGBT bias claims against religious employers

An LGBT activist attends a rally against Homophobia and Transphobia in Kiev
REUTERS/Gleb Garanich
  • Judge blocked agency from suing any employer with religious objections
  • Appeals court seemed to struggle with scope of order

(Reuters) - A U.S. appeals court panel expressed concern on Tuesday about offering private businesses a blanket religious exemption from claims of workplace LGBT bias by a federal anti-discrimination agency.

A three-judge panel of the New Orleans-based 5th U.S. Circuit Court of Appeals did so as it weighed whether to reverse a Texas judge's order barring the U.S. Equal Employment Opportunity Commission from pursuing LGBT bias claims against employers with sincere religious objections.

The ruling came in a class action against the EEOC by Braidwood Management Inc, a Texas-based management services company with about 70 employees whose owner says he would not employ gay or transgender people on religious grounds.

Braidwood's lawyer, Jonathan Mitchell, argued the nationwide injunction was necessary to prevent the EEOC from violating employers' rights under the federal Religious Freedom Restoration Act, which bars the government from burdening the exercise of religion.

His client sued after the EEOC updated its enforcement guidance in 2021 to reflect the U.S. Supreme Court's ruling in Bostock v. Clayton County, which said bias against gay and transgender workers is a form of unlawful sex discrimination under Title VII of the Civil Rights Act of 1964.

Mitchell, a former Texas solicitor general and well-known conservative lawyer, argued that absent court intervention, businesses could be forced to act in a "manner contrary to their religious faith."

But U.S. Circuit Judge Cory Wilson, one of three Republican appointees on Tuesday's panel, told Mitchell that without some limiting principle, his argument amounted to "reading Bostock out of existence."

"So basically anyone who says 'I'm opposed to this' can opt out of what the Supreme Court has said," said Wilson, an appointee of former President Donald Trump. "How do we do that?"

Ashley Cheung Honold of the U.S. Department of Justice, who argued for the EEOC, told the panel that it was improper for U.S. District Judge Reed O'Connor to certify a class and issue an order that applied to religious employers nationwide.

Businesses may be able to show on a case-by-case that EEOC enforcement burdens their exercise of religion, "but it cannot be true at this level of generality for every employer in this broad class," Honold said.

She also argued that Braidwood lacked standing to sue because it is not facing any EEOC enforcement action.

Mitchell said the EEOC's history of suing religious employers on behalf of LGBT workers, such as in a landmark case involving a Michigan funeral home, was sufficient to show that Braidwood could expect to be targeted by the agency.

The case is Braidwood Management v. U.S. Equal Employment Opportunity Commission, 5th U.S. Circuit Court of Appeals, No. 22-10145.

For the plaintiffs: Jonathan Mitchell of Mitchell Law; and Gene Hamilton of America First Legal Foundation

For the EEOC: Ashley Cheung Honold of the U.S. Department of Justice

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Dan Wiessner (@danwiessner) reports on labor and employment and immigration law, including litigation and policy making. He can be reached at daniel.wiessner@thomsonreuters.com.