The Office of Federal Contract Compliance Programs (OFCCP) issued Directive (DIR) 2018-03 which became effective August 10th, 2018. While various sections of the regulations already address the provision and insurance of equal employment opportunities to applicants and employees without regard to religion or national origin (41 CFR §§ 60-50.1 to 50.5) ; as well as clarified the obligations of employers in the accommodation of religious observances and practices of employees and applicants (41 CFR § 60-50.1[c]), the new directive incorporates recent developments in the law on religion-exercising organizations and individuals.
Three important and recent court decisions became the impetus for Directive 2018-03. (Note: To fully understand the impact of these court decisions to the development of DIR 2018-03, the author included brief summaries of the cases at the end of this blog):
- Trinity Lutheran Church of Columbia, Inc. v. Comer, 137. S. Ct. 2012, 2022 (2017) – the government violates the Free Exercise clause when it requires an entity to give up its religious character to gain access to a generally available public benefit(s). (See additional resources section for a summary of the court case.)
- Masterpiece Cakeshop, Ltd. V. Colo. Civil Rights Comm’n. 138 S. Ct. 1719, 1731 (2018) – the government violates the Free Exercise clause when decisions are made with hostility to religion or religious beliefs. (See additional resources section for a summary of the court case.)
- Burwell v. Hobby Lobby Stores, Inc. 134 S. Ct. 2751, 2775 (2014) – the Religious Freedom Restoration Act applied to federal regulation of the activities of for-profit organizations. (See additional resources section for a summary of the court case.)
As a result, the following guidance in OFCCP’s enforcement, compliance assistance, and investigation activities were incorporated in the new directive:
- The government must permit individuals and organizations, to participate in a government program “without having to disavow their religious character.”
- OFCCP staff “cannot act in a manner that passes judgement…” and must proceed in a neutral and tolerant manner towards religious beliefs.
- OFCCP staff “cannot condition the availability of opportunities upon recipient’s willingness to surrender his (or her) religiously impelled status.”
- OFCCP staff must bear in mind that restrictions set by federal regulations on activities of a for-profit corporation must comply with the Religious Freedom Restoration Act.
- OFCCP staff must permit faith-based organizations to compete on a level playing field for federal contracts.
- OFCCP staff must respect the right of religious people and institutions to practice their faith without fear of discrimination or retaliation by the federal government.
At this time, it is hard to determine the immediate impact of the Directive to contractors’ compliance obligations and whether it will ever come in conflict with other non-discrimination provisions of the law.
Additional Resources: Court Case Summaries
Burwell v. Hobby Lobby Stores, Inc. 134 S. Ct. 2751, 2775 (2014)
Background: In 1993, Congress passed the Religious Freedom Restoration Act (RFRA), requiring strict scrutiny when a law “substantially burdens a person’s exercise of religion.” Strict Scrutiny requires a law to be the least restrictive means of furthering a compelling government interest. The RFRA was amended in 2000 by the Religious Land Use and Institutionalized Persons Act (RLUIPA) to redefine exercise of religion as any exercise of religion.
Case Summary: Hobby Lobby Stores, Inc. challenged the United States Department of Health and Human Services’ (HHS) federal mandate requiring employers to cover contraceptives for their female employees. The plaintiffs believed that life began at conception or at the fertilization of an egg. The plaintiff therefore objected to their businesses to provide health insurance coverage to their female employees on the use of four contraceptives believed to prevent implantation of a fertilized egg and hence, represent an abortion.
Decision: In its review of the case, the United States Supreme Court noted that the HHS treats nonprofit corporations as persons under the RFRA and therefore, the same treatment should be extended to for-profit corporations. The Court decided in favor of Hobby Lobby Stores, Inc. allowing closely held for-profit corporations to be exempt from a regulation its owners religiously object to, if there is a less restrictive means of furthering the law’s interest. The HHS’ regulations enforcing the contraceptive mandate on Hobby Lobby Stores, Inc. violates the RFRA by substantially burdening Hobby Lobby Store’s exercise of religion. While the Court assumed that guaranteeing cost-free access to the four challenged contraceptive methods serve as a compelling governmental interest, the Government unfortunately failed to show that the mandate is the least restrictive means of furthering that interest.
The decision marked the first time that the court recognized a for-profit corporation’s claim of religious belief. The decision did not address whether such corporations are protected by the free-exercise of religion clause of the First Amendment of the United States Constitution.
Trinity Lutheran Church of Columbia, Inc. v. Comer, 137. S. Ct. 2012, 2022 (2017)
Background: In 1875, Missouri adopted a new constitution that declared “no money shall ever be taken from the public treasury, directly or indirectly, in aid of any church, sect or denomination of religion.”
Case Summary: Trinity Lutheran Church of Columbia, Inc. operates a licensed preschool and daycare in Columbia, Missouri. The Missouri Department of Natural Resources offers grants that provide funds for qualifying organizations to purchase recycled tires to resurface playgrounds. Trinity applied for a grant and was graded the fifth highest application score. The state of Missouri gave out fourteen grants that year, however the state denied Trinity a grant citing the 1875 provision of the Missouri Constitution requiring no state aid to churches.
Decision: The United States Supreme Court found that Missouri’s policy violated the rights of Trinity Lutheran under the Free Exercise Clause by denying the church an otherwise available public benefit based on its religious status.
The Court’s decision marked the first time the Constitution required the government to provide public funds directly to a church.
Masterpiece Cakeshop, Ltd. V. Colo. Civil Rights Comm’n. 138 S. Ct. 1719, 1731 (2018)
Background: Under Colorado’s public accommodations law, the Colorado Anti-Discrimination Act, businesses open to the public are prohibited from discriminating against their customers on the basis of race, religion, gender, or sexual orientation.
Case Summary: In 2012, a same-sex couple visited Masterpiece Cakeshop in Lakewood, Colorado to order a wedding cake for their marriage. Masterpiece Cakeshop’s owner denied the same-sex couple’s request claiming that creating a wedding cake for same-sex marriage would go against the owner’s religious beliefs, although the same-sex couple could purchase other items in the store. The couple eventually purchased a cake from another bakery and filed a complaint with the Colorado Civil Rights Commission. The Colorado Civil Rights Commission ruled in favor of the same-sex couple and Masterpiece Cakeshop was ordered to provide cakes for same-sex marriages, change its company policies, provide staff training regarding public accommodations, discrimination, and provide quarterly reports for the next two years.
Masterpiece Cakeshop petitioned the United States Supreme Court for review, questioning whether applying Colorado’s public accommodations law to compel the owner of Masterpiece Cakeshop to create expression that violates his sincerely held religious beliefs about marriage, violates the Free Speech or Free Exercise Clauses of the First Amendment.
Decision: The United States Supreme Court ruled in favor of the Masterpiece Cakeshop this time, citing that by failing to act in a manner neutral to religion, the Colorado Civil Rights Commission violated the First Amendment to the United States Constitution.
 E.O. 13831 § 1.
 E.O. 13898 § 1.
Contributing author: Marife Ramos, PHR, SHRM-CP, Director of EEO/AA Operations at Biddle Consulting Group, Inc.