Court exempts a Texas company from following anti-discrimination law protecting LGBTQ+ workers

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A federal agency cannot force a Texas-based conservative Christian business to comply with policies barring discrimination against LGBTQ+ employees or job applicants, a federal appeals court has ruled.

The decision by a panel of the 5th U.S. Circuit Court of Appeals said the U.S. Equal Employment Opportunity cannot deny Braidwood Management an exemption from anti-discrimination policies designed to protect LGBTQ+ people from discrimination under Title VII of the federal Civil Rights Act. Braidwood is entitled to the exemption under the Religious Freedom Restoration Act of 1993, the ruling said.

“Being forced to employ someone to represent the company who behaves in a manner directly violative of the company’s convictions is a substantial burden and inhibits the practice of Braidwood’s beliefs,” Judge Jerry Smith wrote for the panel of three 5th Circuit judges.

Braidwood wants to make sure it is not required to hire or retain any employee who “engages homosexual or transgender conduct,” according to the district court judge who first ruled in the case in 2021. And the company objects to EEOC policies forbidding gender-specific dress codes or requirements that employees use “bathrooms that conform to biological sex.”

The Supreme Court ruled in 2020 that Title VII protects gay, lesbian and transgender people from discrimination in employment. But Justice Neil Gorsuch, writing for the majority in that 6-3 ruling, had left open the possibility that employers who have religious objections to employing LGBTQ+ people also might be able to raise those claims in different cases.

The decision, issued Tuesday afternoon, is narrowly tailored. It partially upheld a lower court ruling in favor of Braidwood by U.S. District Judge Reed O'Connor of Texas, but rejected other parts that would have covered other employers.

It was unclear whether the EEOC would appeal further. A spokesperson declined comment Wednesday except to say the decision was under review.

“The decision certainly narrowed some of the most troubling aspects of the district court’s decision. However, it still leaves a roadmap for other employers to discriminate,” Adam Pulver, an attorney for the nonprofit group Public Citizen, said Wednesday. The organization had filed a brief backing the government's opposition to the Braidwood suit.

Among EEOC arguments against the suit was the lack of any indication that any enforcement action had been taken or planned against Braidwood.

Gene Hamilton, an attorney for the conservative America First Legal organization and counsel for Braidwood, noted that in a statement saying AFL was “thrilled” with the 5th Circuit ruling.

“The Biden administration wrongly tried to keep our clients out of court, arguing that they had to wait for the EEOC to subject them to costly administrative litigation and an intrusive process before their claims against the EEOC’s radical transgender guidance could be heard," Hamilton said.

Smith's Tuesday opinion called the 2020 ruling a “siren call” for courts to resolve issues regarding employers' religious views. “Without resolution, potential penalties hang over plaintiffs’ heads like Damocles’ sword,” wrote Smith, who was nominated to the appeals court by former President Ronald Reagan.

The other judges on the panel were Edith Brown Clement, nominated by former President George W. Bush, and Cory Wilson, nominated by former President Donald Trump.

Braidwood is owned by Steven Hotze, a conservative activist in Texas who helped defeat proposed nondiscrimination protections for gay and transgender people in Houston. The company is also a plaintiff in a suit, presided over by O'Connor, that seeks to limit Affordable Care Act insurance coverage requirements for various types of preventive care, including drugs to prevent HIV.