On June 4, the U.S. Supreme Court held in Masterpiece Cakeshop, Ltd. v. Colorado Civil Rights Commission that the Colorado Civil Rights Commission violated the constitutional right of free exercise of religion of a Christian bakery owner who refused to make a custom-designed wedding cake for a same-sex couple. The Commission had decided that the baker violated Colorado’s law prohibiting public accommodation discrimination based on sexual orientation.

The majority opinion, written by Justice Anthony Kennedy, said that the Commission decision was tainted with “impermissible hostility” against the religious beliefs of Jack Phillips, the bakery owner. But the Supreme Court decision avoided important issues, including whether custom creation of a cake is “artistic expression” protected by the First Amendment’s free speech protections and, more generally, how to resolve the tension between constitutional protections for LGBT rights, on the one hand, and the First Amendment’s protection of the free exercise of religious beliefs and practices, on the other.

In addition to having a relatively narrow holding, the Supreme Court’s decision may not be directly applicable to many employers, similar to its Hobby Lobby decision in 2014 (finding that a privately held company for which the owners had sincere religious objections was not required to offer health care coverage for certain contraceptives under the Affordable Care Act). However, the Masterpiece Cakeshop decision is an indication of support for business owners with devout religious beliefs that may put them at odds with evolving concepts of equality, marriage, and morality. Moreover, it is a sign that employers may need to accommodate employees who have faith-based objections to certain corporate initiatives.

The Masterpiece Cakeshop decision

A gay couple filed a charge of discrimination with the Colorado Civil Rights Commission after Mr. Phillips refused to make a custom wedding cake for them because of his religious beliefs about same-sex marriage. Interestingly, the refusal occurred in 2012, before the Supreme Court’s decision in Obergefell v. Hodges (recognizing same-sex marriage as a constitutional right), and even before the state of Colorado recognized same-sex marriage. An Administrative Law Judge found in favor of the couple, and the Civil Rights Commission affirmed. Mr. Phillips was ordered to “cease and desist” from treating same-sex couples any differently from opposite-sex couples. He was also ordered to have staff training on the state Anti-Discrimination Act, amend his company policies, and submit “quarterly compliance reports” for two years.

During the hearings before the Commission, certain Commissioners expressed open hostility toward Mr. Phillips’ religious beliefs. In one instance, a Commissioner commented that freedom of religion had been used to justify slavery and the Holocaust, and was “one of the most despicable pieces of rhetoric that people can use.”

The Colorado Court of Appeals upheld the Commission’s decision, and the U.S. Supreme Court agreed to review.

The Supreme Court decision

In the majority opinion (joined by Chief Justice John Roberts and Justices Samuel Alito, Stephen Breyer, Neil Gorsuch, and Elena Kagan), Justice Kennedy opined that "[w]hen the Colorado Civil Rights Commission considered this case, it did not do so with the religious neutrality that the Constitution requires." He emphasized that anti-religious bias is inappropriate for a commission that is supposed to fairly and neutrally enforce Colorado's anti-discrimination law.

Justice Kennedy focused on two points in the record before the Court. First, he noted the open hostility to the bakery owner’s religious views described above. Second, he commented on past cases in which the Commission had found in favor of bakers who had refused to bake cakes with anti-gay messages. The Commission’s differential treatment in the two situations, Justice Kennedy said, “elevates one view of what is offensive over another and itself sends [a] signal of official disapproval of the [bakery owner’s] religious beliefs.” As already noted, the majority opinion avoided ruling on the free speech argument. According to Justice Kennedy, “[t]he outcome of cases like this in other circumstances must await further elaboration in the courts, all in the context of recognizing that these disputes must be resolved with tolerance, without undue disrespect to sincere religious beliefs, and without subjecting gay persons to indignities when they seek goods and services in an open market.”

In a concurring opinion, Justice Clarence Thomas (joined by Justice Gorsuch) said that he would have found in favor of the bakery on free speech grounds in addition to the religious ground. Justice Kagan (joined by Justice Breyer) said that she was finding in favor of the bakery only because of the Commission’s expressed anti-religious animus. (Justice Gorsuch wrote a concurrence as well, and was joined by Justice Alito.)

The dissent

Justice Ruth Bader Ginsburg dissented, joined by Justice Sonia Sotomayor. She argued that cake decorating is not “speech” worthy of First Amendment protection. She also said that the cases involving the cakes with anti-gay messages – in which the Commission had found in favor of the bakeries – were not analogous to the Masterpiece situation because in those cases the customer had requested cakes with explicit anti-gay content. The bakeries were willing to bake the cakes for the customer but only if the anti-gay content were not included. Justice Ginsburg contended that the bakeries would have refused to make cakes with those messages for anyone, regardless of religion or sexual orientation. By contrast, in the Masterpiece situation, the gay couple had not requested any messaging at all – just a wedding cake. Mr. Phillips refused to create the cake, “for no reason other than [the couple’s] sexual orientation, a cake of the kind he regularly sold to others.” In addition, Justice Ginsburg argued, the anti-religious comments of the Commissioner were not so severe as to have deprived the bakery of its rights.

What should employers do now?

As some commentators have noted, the majority in Masterpiece Cakeshop “kicked the can down the road,” and that may have been necessary to keep Justices Kennedy, Breyer, and Kagan in the majority. However, it would have been helpful if the Court had provided more concrete guidance on how business owners may lawfully operate when their religious beliefs conflict with applicable human rights laws. If, in the future, a civil rights commission refrains from making anti-religious comments during a hearing but still rules against the business owner with traditional religious beliefs, will the commission decision stand? Employers also need guidance regarding how to promote corporate goals such as diversity and inclusion in the workplace without interfering with the religious rights of employees.

Those reservations aside, the Supreme Court decision is no doubt a positive sign for business owners and employees with traditional religious beliefs, whether they be Christian, Jewish, Muslim, or other. Needless to say, employers should not tolerate discrimination based on sexual orientation, and they should continue to strictly prohibit workplace harassment on that basis. However, they should be wary of mandating employee participation in certain programs, or requiring employees to “affirm” behavior that may conflict with the employees’ religious beliefs. Employers should stay up to date on the employment laws of the jurisdictions where they operate. Respectful dialogue with employees on various issues, including accommodation of religious beliefs and practices and issues related to equal employment opportunity, including sexual orientation issues, generally will pay off in the long run. In the meantime, watch for future decisions from the Supreme Court to further clarify these issues.