The Trump administration on Wednesday formally proposed a new rule to let businesses with federal contracts cite religious objections as a valid reason to discriminate against their workers on the basis of LGBTQ status, sex, race, ethnicity, national origin, and other characteristics — thereby skirting worker protections created by past presidents.
The move marks President Donald Trump’s latest effort to weaken the civil rights of minorities with ambiguous rules that grant agencies wide discretion to let companies off the hook when accused of discrimination.
The 46-page draft rule from the Labor Department would apply to a range of so-called religious organizations — including corporations, schools, and societies — provided that they claim a “religious purpose.”
Labor Department spokesperson Megan Sweeney confirmed to BuzzFeed News on Wednesday that the rule would apply to for-profit corporations with federal contracts. This would allow those companies discriminate and keep their contract, given that they obtain a religious exemption.
The Trump administration makes clear that a corporation needn’t focus entirely on religion to qualify, saying, “The contractor must be organized for a religious purpose, meaning that it was conceived with a self-identified religious purpose. This need not be the contractor’s only purpose.”
“A religious purpose can be shown by articles of incorporation or other founding documents, but that is not the only type of evidence that can be used,” says the rule, which grants companies many opportunities to claim that faith or morals guide their intent.
The National Center for Transgender Equality said in a statement the rule could allow “firing or refusing to hire someone because of their sexual orientation or gender identity. It could also lead to federal contractors refusing to hire women or unmarried workers who are pregnant or parents, or even discrimination on the basis of race.”
Workers could still take employers to court, but there is no federal law explicitly protecting LGBTQ workers. And under the proposed rule, the Labor Department wouldn’t need to take enforcement action or cancel lucrative contracts with businesses that make religious claims as the basis for bias.
Echoing a sentiment from a Labor Department press release, Sweeney tried to downplay that fact that the plan would allow discrimination, saying in a statement, “The proposed regulation does not exempt or excuse a contractor from complying with other applicable requirements outside of the religious employer exemption.”
But this ignores the heart of the plan: The draft rule exists to create a carveout that protects businesses that raise a religious motive. The Labor Department, according to the proposal, “will find a violation of [the nondiscrimination order] only if it can prove by a preponderance of the evidence that a protected characteristic other than religion was a but-for cause of the adverse action.”
The proposal could apply to up to 420,000 contractors, according to the draft to be published in the Federal Register. “While only a subset of contractors and would-be contractors may wish to seek this exemption, the Supreme Court, Congress, and the President have each affirmed the importance of protecting religious liberty for those organizations who wish to exercise it,” it reads.
The Labor Department’s Office of Federal Contract Compliance Programs says the rule is necessary to “clarify” existing rules because recent Supreme Court decisions and executive orders have expanded the rights of religious employers with federal contracts.
But none of the three central court cases cited by the agency concern discrimination by religious organizations with federal contracts. Instead, it leans heavily on the case of Hobby Lobby, a for-profit corporation that sought to deny reproductive health insurance coverage to women by claiming a religious excuse.
LGBTQ advocates were alarmed when the draft rule was pending, saying it was being designed to create a loophole in former president Obama’s 2014 executive order that banned contractors from discriminating on the basis of their sexual orientation or gender identity.
The Trump administration issued a directive with similar aims in August 2018, saying that the Labor Department would grant a broader “religious exemption” for contractors. At the time, officials declined to say in what circumstances it would apply. However, none of the court decisions cited by the agency at the time dealt with employment discrimination, and two of the cases involve for-profit corporations, not religious groups.
The proposed regulation would carry more legal force than the directive and could be difficult for future presidents to undo. The draft regulation will also be subject to a 30-day public comment period.
The Trump administration has steadily expanded its argument that constitutional rights to religious exercise allow employers, shopkeepers, and medical professionals to ignore laws and policies that ban discrimination.
This year, Department of Health and Human Services finalized regulations to protect religious health care providers that deny contraception, while creating a Conscience and Religious Freedom Division, which endeavors to let care providers recuse themselves from providing certain services. The agency also started forming a regulation to protect those workers, but stopped the process after the Office of Management and Budget said HHS had to disclose feedback it got from a comment period.
Before he was forced out of office, then–attorney general Jeff Sessions had been particularly bullish in protecting religious employers, saying in a guidance memo they may hire workers “whose beliefs and conduct are consistent with the employers’ religious precepts” and that “the federal government may not condition receipt of a federal grant or contract on the effective relinquishment of a religious organization’s hiring exemptions.”
Sessions then directed the Justice Department’s Religious Liberty Task Force this fall to find examples of religious entities being denied government funds, saying the practice “must, and will, stop.”
In that vein, the Office of Management and Budget said on its website in October that the Labor Department “plans to update its regulations to comply with current law regarding protections for religion-exercising organizations.”
The Labor Department contends that two new executive orders from Trump and three Supreme Court rulings have shifted the circumstances in which a contractor can discriminate in the name of religion. The draft rule released Wednesday refers to the Supreme Court’s decisions in Hobby Lobby and Masterpiece Cakeshop, which concerned closely held, for-profit businesses with religious owners, not religious corporations. It also cited the case of Trinity Lutheran Church of Columbia, a church that successfully argued for a government grant to refurbish its playground. (BuzzFeed News has previously reported additional details on the directive, the cases, and the Trump orders.)
The Labor Department’s new draft regulation builds on decades of policy around federal contractors. After President Lyndon B. Johnson banned discrimination by executive order in 1965, President George W. Bush added a narrow religious exemption. Bush’s amendment lets religious corporations make employment decisions based on their faith — like Jewish charities hiring only fellow Jews.
Obama expanded Johnson’s underlying nondiscrimination order to also protect LGBTQ people working for federal contractors, leaving Bush’s narrow exemption intact. The new rule opens up that exemption, but it does not specify the circumstances in which it would apply — those decisions will be left up to enforcement officials at the Labor Department.
Labor Secretary Patrick Pizzella said in a statement Wednesday, “As people of faith with deeply held religious beliefs are making decisions on whether to participate in federal contracting, they deserve clear understanding of their obligations and protections under the law.”