Seyfarth Synopsis: After the past few years of favorable policy changes and court decisions, religious employers have to navigate the realities of a different presidential administration with its unique set of policy preferences. The Department of Labor recently filed notices in two Court actions suggesting that it will be rescinding its prior faith-based organization-friendly regulations. Although these entities may be concerned as to how the new Administration will approach religious rights, it is important to remember that the Supreme Court’s recent decisions on religious rights remain an independent anchor in law that these groups may rely upon in addressing such concerns.

In many respects, religious-minded employers are not that different from their secular counterparts. Both are concerned with running their respective workplaces more efficiently, and both are usually subject to the same sets of rules and regulations. Still, the one critical difference between the two is the additional availability of First Amendment protections. As we have documented here, here, and here, the First Amendment’s protections are not parchment barriers, but can provide valuable protection.

Rulemaking

With command of the White House and the Congress, the Biden Administration will have an easier time nominating and confirming individuals with the Biden Administration’s interests and agendas in mind to lead key administrative agencies (e.g. National Labor Relations Board, Equal Employment Opportunity Commission) and executive agencies (e.g. Department of Labor, Department of Health and Human Services, and Department of Education) to effectuate its policies that will directly impact employers across the nation. The new Administration will no doubt consider how it will deal with the prior Administration’s “midnight regulations” issued at the end of the Trump Administration, two of which in particular are of significant importance to faith-based organizations.

First, in December 2020, the Department of Health and Human Services announced a joint final rule with eight other agencies to ensure that faith-based and secular organizations are treated equally in federally-supported programs, and it clarifies that faith-based organizations do not lose their religious protections and rights just because they participate in federal programs and activities.

Second, and also in December 2020, the Department of Labor’s Office of Federal Contract Compliance Programs codified the religious exemption to the equal opportunity clause in federal government contracting.

Both rules brought clarity long-sought by many religious-minded organizations and significantly support those organizations in protecting their religious missions, and their rescission would not be welcomed by these groups. At the same time, both new rules were met with immediate resistance from some states and employee groups. On January 21, 2021, a group of states led by New York filed a lawsuit seeking to block the latter rule in the Southern District of New York. That same day, a group of unions filed a similar lawsuit in the District of Oregon. Because President Biden had been inaugurated, there was some question whether his Department of Justice would even defend the rule in court.

In fact, on February 9, 2021 and February 10, 2021, the Biden Administration made clear in filings in both of those litigations that “The Department of Labor intends to propose rescission of the December 2020 rule through notice-and-comment rulemaking, a process that is expected to take several months.” Both District Courts granted stays of the action for 90 days. At least for the federal contracting rule, the Biden Administration will follow the Administrative Procedure Act’s rulemaking requirements. As such, many faith-based organizations have reason to worry what this process will bring in its place.

Supreme Court Considerations

Despite the changes happening in the Executive Branch, it is far from clear that the change in Administration necessarily means that the Biden administration will look to create a less accepting environment for religious organizations. Furthermore, in any action the new Administration will take, it will have to be cognizant of the Supreme Court’s jurisprudence on religious protection. Just this past term, the Court expanded the ministerial exception in Our Lady of Guadalupe School v. Morrissey-Berru, further signaling that any proposed policy changes by the Executive Branch will eventually have to meet the scrutiny of the Judicial branch. (See Seyfarth summary of this case here.) This upcoming term, the Court is considering Fulton v. City of Philadelphia, a case where a religious adoption agency refused to certify same-sex couples as fit parents for children in Philadelphia’s foster care system based on its religious beliefs. Although not an employment case, a ruling in favor of the religious agency could allow employers to read the tea leaves of the Court.