Appeals court protects a for-profit religious employer

A federal appeals court in New Orleans last week ruled that a for-profit religious employer is exempt from federal rules that require businesses to hire LGBT employees unwilling to abide by employers’ religious beliefs about sexual conduct.

Braidwood Management, Inc., a Houston-area holding company for health and wellness companies owned by Christian physician Steven Hotze, sued the Equal Employment Opportunity Commission in 2018. The company and its co-plaintiff, Bear Creek Bible Church, asked for relief from rule changes put in place after the U.S. Supreme Court interpreted Title VII’s bar on sex discrimination to include sexual orientation and gender identity.

The three-judge panel’s unanimous June 20 ruling comes just over three years after the Supreme Court’s watershed ruling in Bostock v. Clayton County, which included sexual orientation and gender identity in Title VII protections in the Civil Rights Act of 1964. While Bostock cast a broad net over hiring practices, Justice Neil Gorsuch qualified the ruling, noting possible avenues of relief for those with religious objections to homosexual and transgender conduct.

In a 41-page opinion, Circuit Judge Jerry Smith pointed to a federal law identified in Bostock, the Religious Freedom Restoration Act. He wrote that forcing Braidwood to employ someone who behaves in a manner that violates the company’s convictions “would substantially burden” the employer’s right to practice its beliefs.

Smith found that the Equal Employment Opportunity Commission, a federal agency charged with enforcing Title VII, completely failed to show a compelling reason for denying Braidwood an exemption.

“The [commission’s] euphemistic phrasing that ‘the only action that Braidwood is required to take under Title VII is to refrain from taking adverse employment actions’ is tantamount to saying the only action Braidwood needs to take is to comply wholeheartedly with the guidance it sees as sinful,” wrote Smith. “That is precisely what [the Religious Freedom Restoration Act] is designed to prevent.”

While the court upheld Braidwood’s claim, it declined to go further and rule on its First Amendment arguments. It also ruled that the decision will apply only to Braidwood.

Smith’s opinion also left in place the District Court’s ruling in favor of the second challenger, the nondenominational Bear Creek Bible Church, though it also declined to extend the holding to other similarly situated religious employers. Unlike the for-profit Braidwood, the church fell under a statutory exemption to Title VII for religious organizations.

Hotze, a conservative activist in Katy, Texas, is no stranger to controversy. He was indicted last year by a state grand jury for his role in financing a private investigation into voter fraud in the 2020 election. That investigation ended with an altercation between his investigator and an innocent repairman, reported the Houston Chronicle. Hotze is awaiting trial.

In a statement issued after the ruling, America First Legal Vice President Gene Hamilton, one of the attorneys who represented Braidwood, said the law firm would “continue to fight for the rights of Americans everywhere to be free from radical administrative transgender edicts.”

Liberty Counsel founder Mat Staver welcomed the court’s clarification of post-Bostock law. “Businesses must remain a free space for employers to operate in a manner consistent with their faith and convictions,” Staver said in a statement. “This ruling confirms the broad protection the law gives religious businesses to employ people with aligned beliefs and conduct.”

The Biden administration has not yet indicated whether it will ask the full 17-judge appeals court to reconsider the panel ruling or appeal directly to the U.S. Supreme Court.