Religious freedom and employment discrimination

The tension between employment discrimination and religious freedom recently played out in a Michigan federal district court case. In that case, EEOC v. R.G. & G.R. Harris Funeral Homes, the employer’s religious freedom won out over the rights of a transgender employee. Specifically, the judge ruled that a metro Detroit funeral home did not discriminate against an employee when it fired her for transitioning from a man into a woman.

Two important points to be gleaned from this lengthy opinion. First, the employer argued that its enforcement of its sex-specific dress code could not constitute impermissible sex stereotyping under Title VII. The district court rejected this argument.

Second, the court ruled that under the Religious Freedom Restoration Act of 1993 (“RFRA”), the EEOC was prohibited from applying Title VII to force the funeral home to violate its sincerely held religious beliefs. In reaching this decision, the District Court relied extensively upon the U.S. Supreme Court’s decision in Burwell v. Hobby Lobby Stores, Inc., 134 S.Ct. 2751 (2014), which concluded that a for-profit corporation is considered a “person” for purposes of RFRA protection.

As such, the district court went through the intellectual exercise of asking whether Title VII “substantially burdens” the funeral home’s exercise of religion. The answer was, yes:

The Court finds that the Funeral Home has shown that the burden is ‘substantial.’ Rost has a sincere religious belief that it would be violating God’s commands if he were to permit an employee who was born a biological male to dress in a traditionally female skirt-suit at one of his funeral homes because doing so would support the idea that sex is a changeable social construct rather than an immutable God-given gift. Rost objects on religious grounds to: 1) being compelled to provide a skirt to an employee who was born a biological male; and 2) being compelled to allow an employee who was born a biological male to wear a skirt while working as a funeral director for his business.

Should a for Profit Company Have a Religious Belief Exception to Discrimination Claims?

Employment law sage and attorney Robin Shea first reported on this case on April 19, 2016. She believes that this decision is likely to be appealed to the U.S. Sixth Circuit Court of Appeals. I hope so.

I say this because the opinion and others like it leave too many unanswered questions for employers and employees. Also, as explained below, the consequences for elevating religious beliefs of a corporate entity over the rights of people under various anti-discrimination statutes are not good.

First, the funeral home employer, R.G. & G.R. Harris Funeral Home, Inc., was organized in 1932 as a Michigan domestic profit corporation. It was never formed as a non-profit or a religious institution. Also, the funeral home’s most recent articles of incorporation, provide that the funeral home’s sole purpose is to “perform embalming, funeral burial and related services as well as all other purposes allowed under Michigan law.” (2005 restated articles of incorporation). Again, from creation to operation nothing inherent in the corporate entity demonstrates any preferred religion.

Second, the distinction between a religious institution and a for-profit corporation were succinctly explained by Justice Ginsburg in the Hobby Lobby case:

Religious organizations exist to foster the interests of persons subscribing to the same religious faith. Not so of for-profit corporations. Workers who sustain the operations of those corporations commonly are not drawn from one religious community.

Building on this point, it is corporate law 101 that a corporation is to be treated separate and distinct from its owners. Under Michigan corporate law, the corporate entity remains distinct even where a single person owns all its stock.

Third, turning to the actual religious beliefs at issue in this case – they were asserted by the corporation’s majority shareholder, Thomas Rost. He sincerely believes that the “Bible teaches that a person’s sex (whether male or female) is an immutable God-given gift and that it is wrong for a person to deny his or her God-given sex.” However, they are his beliefs – not the corporation. And the individual discriminated against was employed by the corporation – not Mr. Rost.

Simply put, a person is not required to form a corporation or other business entity in order to conduct a for-profit business. However, there are many reasons and advantages for forming a business entity. But one should not be permitted to maintain a business structure when it inures to their benefit and then ignore the constraints of that business entity when it does not.

Further, where is the line to be drawn, if at all, when it comes to whether any business entity’s purported religious beliefs, should be respected over anti-discrimination statutes? It is important to remember that this question opens the door to any religion – mainstream religions or otherwise, including any variants. It is also important to note that not all people, gender, competing religions may be treated equally in another’s religion.

As Justice Ginsburg noted in the Hobby Lobby decision,

Approving some religious claims while deeming others unworthy of accommodation could be ‘perceived as favoring one religion over another,’ the very ‘risk the [Constitution’s] Establishment Clause was designed to preclude … The court, I fear, has ventured into a minefield.

Also, if a corporation’s religious beliefs are allowed to be an affirmative defense against discrimination, does this open the door for such beliefs to be litigated, including discovery, proofs, and legal arguments so that a judge may ultimately decide the issue?

Returning to the funeral home’s religious beliefs and actual business practices, there was no dispute that the funeral home marketed to and served customers of every religion (various Christian denominations, Hindu, Muslim, Jewish, native Chinese religions) or none at all. But the Christian Bible strictly forbids recognizing other religions. See Exodus 23:13 (“… and make no mention of the names of other gods, nor let it be heard on your lips; Isiah 45: 21 (“And there is no other god besides me … there is none besides me.” Exodus 20:3 (“You shall have no other gods before me.”). Further, Biblical passages even direct its followers to kill anyone who worships a non-Christian God. See Deuteronomy 13:9. I have yet to find any “profit” or “business necessity” exception to these Biblical prohibitions against religious acceptance or tolerance in order for a company to turn a profit.

Accordingly and returning to the EEOC’s case against the funeral home, why wouldn’t the Agency have a right to challenge the “sincerity” of the funeral home’s belief where it chose to profit by ignoring the Bible, but now claims the Bible as a defense against discrimination. Do these inconsistencies create a question of fact to be decided by a judge or jury? And are these the sorts of issues that judges should be determining?

As an attorney, I represent a number of small and medium-sized businesses similar to the funeral home. I also understand that families or small groups of shareholders often run such businesses and may share common, sincerely held beliefs. In fact, my law firm is such a business. But I would never subject my staff to my religious views by claiming that the legal entity that actually employs them has a particular religious belief. I also would not want my religious beliefs subjected to the scrutiny inherent in litigation. I just cannot accept the fiction that a for-profit business entity can have religious beliefs or that such a fiction should be elevated to take priority over people and their rights under federal anti-discrimination statutes.