Neither Side Got What It Wanted

On July 21, the President issued an Executive Order prohibiting government contractors from discriminating on the basis of sexual orientation or gender identity. There is no exception for religious organizations with government contracts. But neither is there any override of existing legal protections for religious liberty. The Department of Labor is to issue more detailed implementing regulations in ninety days.

The White House was lobbied hard by gay-rights groups, religious organizations, and advocates of religious liberty. The policy fight inside the White House was intense. Neither side got everything it wanted in this Order, but the gay-rights groups got more. The ultimate issues were kicked down the road.

The Order’s text is short and simple. It inserts “sexual orientation” and “gender identity” into the lists of protected categories—race, color, religion, sex, and national origin—in Executive Order 11246, first issued in 1965. The substance is found in the older Order.

The Order applies to all the contractor’s employees, not just to those performing the government contract. It requires affirmative action to ensure that applicants and employees are treated without regard to sexual orientation or gender identity. The government’s contracting officer will provide notices of these rules, which the contractor must post in places conspicuous to applicants and employees. Any advertisements of job openings must state that all applicants will be considered without regard to sexual orientation or gender identity. The contractor must contractually impose these rules on all its subcontractors and vendors. The contracting officer may require compliance reports, and written statements by the contractor, with supporting information, pledging that the contractor will not discriminate on the basis of sexual orientation or gender identity. The Order can be enforced by cancelling the contract or barring the contractor from future contracts.

The implementing regulations for race and sex require large contractors (more than fifty employees and contracts worth more than $50,000) to maintain written affirmative-action plans that include “placement goals” for hiring underrepresented minorities. These regulations define affirmative action in terms of outreach, recruitment, and eliminating hidden barriers; they explicitly say that racial or sexual preferences are not required or even authorized. But they also explicitly assume that an employer who does not discriminate will eventually achieve proportionate representation in its work force. The implementing regulations for sexual orientation and gender identity may track these provisions, but that remains to be seen.

Reading the text of the Order is much easier than predicting what will happen in practice. With millions of government contracts, and some 200,000 government contractors, under-enforcement is inevitable. This is partly a matter of inertia and resources, partly a matter of priorities and what fights to pick. With respect to religious organizations, it is therefore partly a matter of religious liberty. It is politically much easier for this Administration to quietly under-enforce than to write an explicit religious exception into the canonical text of an Executive Order that has been central to the civil-rights movement for half a century.

Enforcement policy going forward remains to be seen, and conservatives should not be deceived by their own rhetoric about a war on religion. This Administration has been great on some religious-liberty issues (most publicly, enforcing the Religious Land Use and Institutionalized Persons Act), and bad on some others (most obviously, Hosanna-Tabor and Hobby Lobby). And it has quietly left in place some important protections for religious liberty.

First, both the old and new Executive Orders apply only to federal contracts, not to federal grants. Contracts are typically used in government procurement of goods and services; grants are typically used when the government wants the private sector to deliver services to beneficiaries of government programs. Many religious organizations have government contracts, but far more have government grants, and this Order does not apply to them.

Second, the July 21 Order explicitly provides that it does not authorize any person to sue the United States or any other person. This means that religious contractors must deal with their contracting agency, and with the Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP), but not with gay-rights groups filing lawsuits. The implementing regulations are likely to provide that individuals or groups alleging discrimination can file administrative complaints. The OFCCP would likely be obliged to investigate all such complaints, but it would retain enforcement discretion.

Third, Executive Order 13279, issued in 2002, explicitly exempts religious organizations with government contracts from the ban on religious discrimination. Religious organizations may prefer “employees of a particular religion” (as Title VII of the Civil Rights Act of 1964 also allows), even if they have a government contract. A broad coalition of secular civil-rights organizations has lobbied intensely for the Obama Administration to repeal this Executive Order, but it has quietly refused.

Fourth, the Religious Freedom Restoration Act (RFRA) protects individuals and organizations from federally imposed burdens on their exercise of religion. A 2007 opinion of the Office of Legal Counsel (OLC), the elite unit of the Justice Department that advises the executive branch on questions of law, says that RFRA protects World Vision’s right to hire on the basis of religion, even though World Vision had a government grant subject to a statute that prohibited religious discrimination by grant recipients under that particular program. The Administration has been intensely lobbied to withdraw this opinion; once again, it has quietly refused.

Both the 2002 Executive Order and the 2007 OLC opinion address only religious discrimination. They do not address sexual-orientation discrimination. Suppose an employee of a Catholic organization with a federal contract marries his same-sex partner. Can the Catholic organization say that he is no longer Catholic—no longer an adherent of any religion whose members the agency is willing to employ—and discharge him on grounds of religion?

Of course the secular civil-rights groups say no. In their view, that would be unprotected sexual-orientation discrimination and not protected religious discrimination. To shelter under the 2002 Executive Order, religious organizations must write their policies in terms of religion and adherence to religious teachings, and they must be prepared to argue that such a discharge is based on religion. They may have to argue that a self-identified believer who publicly flouts core religious teachings is not actually a believer in the particular religion that the organization prefers in employment.

RFRA provides much more general protection. The 2007 OLC opinion addresses only hiring based on religion, and only federal grants, not contracts, because those were the facts of the particular dispute that generated the question. But the principal issue in the OLC opinion is whether withholding government funds on the basis of a potential recipient’s religious practice substantially burdens the exercise of religion. The answer to that question should be the same whether the religious practice is hiring on the basis of religion or hiring on the basis of sexual morality. The opinion also concludes that the government has no compelling interest in withholding the funds. It is hard to see how the government’s interest in withholding funds is any greater with respect to sexual orientation than with respect to religion as such.

Even if the 2007 OLC opinion is eventually withdrawn, RFRA will still be there. Religious organizations denied government contracts can bring a RFRA challenge with or without the OLC opinion. As a general matter, the Supreme Court’s constitutional law on conditions attached to government grants and contracts is not encouraging. But RFRA creates a statutory claim, and as the OLC opinion pointed out, some of the key cases on which RFRA was based squarely held that government cannot withhold funds because of a beneficiary’s religious practices. Moreover—and the OLC opinion missed this—RFRA’s convoluted text clearly shows, once you parse it through, that Congress thought about government grants and contracts and carefully drafted to avoid excluding them from RFRA’s protections.

Whether RFRA or the 2002 Executive Order protects religious organizations with government contracts are the central issues that have been kicked down the road. The Administration could not withdraw RFRA even if it wanted to, and it has refused to withdraw the 2002 Executive Order and the 2007 OLC opinion. With its high-profile loss in Hobby Lobby, and facing serious difficulties in its contraception litigation with religious non-profits, the Administration is probably not eager to provoke more RFRA litigation.

Legal ambiguity and enforcement discretion are not reliable ways to protect religious liberty. But they sometimes work. Religious organizations with government contracts have important arguments still available to them, and this Administration has often chosen to protect religious liberty by quietly doing nothing. Religious organizations and religious-liberty advocates should keep the pressure on, demanding an enforcement policy that is respectful of religious liberty. Only time will tell whether that is what we get.

Douglas Laycock is the Robert E. Scott Distinguished Professor of Law and Professor of Religious Studies at the University of Virginia, and the Alice McKean Young Regents Chair in Law Emeritus at the University of Texas.

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