79324 Federal Register / Vol. 85, No. 237 / Wednesday, December 9, 2020 / Rules and Regulations 

1Of the 109,726 comments, 35 comments were 

inadvertently posted on Regulations.gov before 

redactions were made. The posted comments were 

withdrawn, redacted, and then reposted. When the 

comments were reposted, the number of comments 

on Regulations.gov increased to 109,761. 

2 Justice White wrote the majority opinion for five 

justices. Justices O’Connor, Blackmun, and Brennan 

(with Justice Marshall joining) wrote opinions 

concurring in the judgment. 

DEPARTMENT OF LABOR 

Office of Federal Contract Compliance 

Programs 

41 CFR Part 60–1 

RIN 1250–AA09 

Implementing Legal Requirements 

Regarding the Equal Opportunity 

Clause’s Religious Exemption 

AGENCY: Office of Federal Contract 

Compliance Programs, Labor. 

ACTION: Final rule. 

SUMMARY: The U.S. Department of 

Labor’s (DOL’s) Office of Federal 

Contract Compliance Programs (OFCCP) 

publishes this final rule to clarify the 

scope and application of the religious 

exemption. These clarifications to the 

religious exemption will help 

organizations with federal government 

contracts and subcontracts and federally 

assisted construction contracts and 

subcontracts better understand their 

obligations. 

DATES: Effective Date: These regulations 

are effective January 8, 2021. 

FOR FURTHER INFORMATION CONTACT: Tina 

Williams, Director, Division of Policy 

and Program Development, Office of 

Federal Contract Compliance Programs, 

200 Constitution Avenue NW, Room 

C–3325, Washington, DC 20210. 

Telephone: (202) 693–0104 (voice) or 

(202) 693–1337 (TTY). 

SUPPLEMENTARY INFORMATION: 

I. Executive Summary 

On August 15, 2019, OFCCP issued a 

notice of proposed rulemaking (NPRM) 

to clarify the scope and application of 

Executive Order 11246’s (E.O. 11246) 

religious exemption consistent with 

recent legal developments. 84 FR 41677. 

During the 30-day public comment 

period, OFCCP received 109,726 

comments on the proposed rule.1 This 

total included over 90,000 comments 

generated by organized commentwriting efforts. Comments came from 

individuals and from a wide variety of 

organizations, including religious 

organizations, universities, civil rights 

and advocacy organizations, contractor 

associations, legal organizations, labor 

organizations, and members of 

Congress. Comments addressed all 

aspects of the NPRM. OFCCP 

appreciates the public’s robust 

participation in this rulemaking, and the 

agency has revised certain aspects of 

this regulation in response to 

commenters’ concerns. 

As stated in the NPRM, on July 2, 

1964, President Lyndon B. Johnson 

signed the landmark Civil Rights Act of 

1964. See Public Law 88–352, 78 Stat. 

241. This legislation prohibited 

discrimination on various grounds in 

many of the most important aspects of 

civic life. Its Title VII extended these 

protections to employment opportunity, 

prohibiting discrimination on the basis 

of race, color, religion, sex, or national 

origin. In Title VII, Congress also 

provided a critical accommodation for 

religious employers. Congress permitted 

religious employers to take religion into 

account for employees performing 

religious activities: ‘‘This title shall not 

apply . . . to a religious corporation, 

association, or society with respect to 

the employment of individuals of a 

particular religion to perform work 

connected with the carrying on by such 

corporation, association, or society of its 

religious activities . . . .’’ Public Law 

88–352, 702(a), 78 Stat. 241, 255 

(codified as amended at 42 U.S.C. 

2000e–1(a)). Congress provided a 

similar exemption for religious 

educational institutions. See id. 

§ 703(e)(2), 78 Stat. at 256 (codified at 

42 U.S.C. 2000e–2(e)(2)). 

Title VII’s protections for religious 

organizations were expanded by 

Congress in 1972 into their current 

form. Congress added a broad definition 

of ‘‘religion’’: ‘‘The term ‘religion’ 

includes all aspects of religious 

observance and practice, as well as 

belief, unless an employer demonstrates 

that he is unable to reasonably 

accommodate to an employee’s or 

prospective employee’s religious 

observance or practice without undue 

hardship on the conduct of the 

employer’s business.’’ Equal 

Employment Opportunity Act of 1972, 

Public Law 92–261, 2(7), 86 Stat. 103 

(codified at 42 U.S.C. 2000e(j)). 

Congress also added educational 

institutions to the list of those eligible 

for section 702’s exemption. In addition, 

Congress broadened the scope of the 

section 702 exemption to cover not just 

religious activities, but all activities of a 

religious organization: ‘‘This title [VII] 

shall not apply . . . to a religious 

corporation, association, educational 

institution, or society with respect to the 

employment of individuals of a 

particular religion to perform work 

connected with the carrying on by such 

corporation, association, educational 

institution, or society of its activities.’’ 

Id. § 3, 86 Stat. at 104 (codified at 42 

U.S.C. § 2000e–1(a)). The Supreme 

Court unanimously upheld this 

expansion of the religious exemption to 

all activities of religious organizations 

against an Establishment Clause 

challenge. See Corp. of the Presiding 

Bishop of the Church of Jesus Christ of 

Latter-day Saints v. Amos, 483 U.S. 327, 

330 (1987).2

One year after President Johnson 

signed the Civil Rights Act, he signed 

E.O. 11246, requiring equal employment 

opportunity in federal government 

contracting. The order mandated that all 

government contracts include a 

provision stating that ‘‘[t]he contractor 

will not discriminate against any 

employee or applicant for employment 

because of race, creed, color, or national 

origin.’’ Exec. Order No. 11246, § 202, 

30 FR 12319, 12320 (Sept. 28, 1965). 

Two years later, President Johnson 

expressly acknowledged Title VII of the 

Civil Rights Act when expanding E.O. 

11246 to prohibit, as does Title VII, 

discrimination on the bases of sex and 

religion. See Exec. Order No. 11375, § 3, 

32 FR 14303–04 (Oct. 17, 1967). In 1978, 

the responsibilities for enforcing E.O. 

11246 were consolidated in DOL. See 

Exec. Order No. 12086, 43 FR 46501 

(Oct. 5, 1978). In its implementing 

regulations, DOL imported Title VII’s 

exemption for religious educational 

institutions. See 43 FR 49240, 49243 

(Oct. 20, 1978) (now codified at 41 CFR 

60–1.5(a)(6)); cf. 42 U.S.C. 2000e– 

2(e)(2). In 2002, President George W. 

Bush amended E.O. 11246 by expressly 

importing Title VII’s exemption for 

religious organizations, which likewise 

has since been implemented by DOL’s 

regulations. See Exec. Order No. 13279, 

§ 4, 67 FR 77143 (Dec. 16, 2002) (adding 

E.O. 11246 § 202(c)); 68 FR 56392 (Sept. 

30, 2003) (codified at 41 CFR 60– 

1.5(a)(5)); cf. 42 U.S.C. 2000e–1(a). 

Because the exemption administered 

by OFCCP springs directly from the 

Title VII exemption, it should be given 

a parallel interpretation, consistent with 

the Supreme Court’s repeated counsel 

that the decision to borrow statutory 

text in a new statute is a ‘‘strong 

indication that the two statutes should 

be interpreted pari passu.’’ Northcross v. 

Bd. of Educ. of Memphis City Sch., 412 

U.S. 427, 428 (1973) (per curiam). 

OFCCP thus generally interprets the 

nondiscrimination provisions of E.O. 

11246 consistent with the principles of 

Title VII. Because OFCCP regulates 

federal contractors rather than private 

employers generally, OFCCP must apply 

Title VII principles in a manner that 


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best fit its unique field of regulation, 

including when applying the religious 

exemption. 

With that said, there has been some 

variation among federal courts of 

appeals in interpreting the scope and 

application of the Title VII religious 

exemption, and many of the relevant 

Title VII court opinions predate 

Supreme Court decisions and executive 

orders that shed light on the proper 

interpretation. The purpose of this final 

rule is to clarify the contours of the E.O. 

11246 religious exemption and the 

related obligations of federal contractors 

and subcontractors to ensure that 

OFCCP respects religious employers’ 

free exercise rights, protects workers 

from prohibited discrimination, and 

defends the values of a pluralistic 

society. See, e.g., Bostock v. Clayton 

Cnty., 140 S. Ct. 1731, 1754 (2020) 

(‘‘[T]he promise of the free exercise of 

religion . . . lies at the heart of our 

pluralistic society.’’). This rule is 

intended to correct any misperception 

that religious organizations are 

disfavored in government contracting by 

setting forth appropriate protections for 

their autonomy to hire employees who 

will further their religious missions, 

thereby providing clarity that may 

expand the eligible pool of federal 

contractors and subcontractors. 

Recent Supreme Court decisions have 

addressed the freedoms and 

antidiscrimination protections that must 

be afforded religion-exercising 

organizations and individuals under the 

U.S. Constitution and federal law. See, 

e.g., Masterpiece Cakeshop, Ltd. v. Colo. 

Civil Rights Comm’n, 138 S. Ct. 1719, 

1731 (2018) (holding the government 

violates the Free Exercise Clause of the 

First Amendment when its decisions are 

based on hostility to religion or a 

religious viewpoint); Trinity Lutheran 

Church of Columbia, Inc. v. Comer, 137 

S. Ct. 2012, 2022 (2017) (holding the 

government violates the Free Exercise 

Clause of the First Amendment when it 

decides to exclude an entity from a 

generally available public benefit 

because of its religious character, unless 

that decision withstands the strictest 

scrutiny); Burwell v. Hobby Lobby 

Stores, Inc., 573 U.S. 682, 719 (2014) 

(holding the Religious Freedom 

Restoration Act applies to federal 

regulation of the activities of for-profit 

closely held corporations); HosannaTabor Evangelical Lutheran Church & 

Sch. v. EEOC, 565 U.S. 171, 196 (2012) 

(holding the ministerial exception, 

grounded in the Establishment and Free 

Exercise clauses of the First 

Amendment, bars an employmentdiscrimination suit brought on behalf of 

a minister against the religious school 

for which she worked). Recent executive 

orders have done the same. See Exec. 

Order No. 13831, 83 FR 20 715 (May 8, 

2018); Exec. Order No. 13798, 82 FR 21 

675 (May 9, 2017). Additional decisions 

from the Supreme Court, issued after the 

NPRM, have likewise extended Title 

VII’s protections while affirming the 

importance of religious freedom. See 

Bostock, 140 S. Ct. at 1754 (holding 

Title VII’s prohibition on discrimination 

because of sex prohibits ‘‘fir[ing] an 

individual merely for being gay or 

transgender’’); Little Sisters of the Poor 

Saints Peter & Paul Home v. 

Pennsylvania, 140 S. Ct. 2367, 2379–84 

(2020) (holding the Departments of 

Labor, Health and Human Services, and 

the Treasury had authority to 

promulgate religious and conscience 

exemptions from the Affordable Care 

Act’s contraceptive mandate); Espinoza 

v. Mont. Dep’t of Revenue, 140 S. Ct. 

2246 (2020) (a state ‘‘cannot disqualify 

some private schools [from a subsidy 

program] solely because they are 

religious’’ without violating the Free 

Exercise clause); and Our Lady of 

Guadalupe Sch. v. Morrissey-Berru, 140 

S. Ct. 2049, 2069 (2020) (holding the 

ministerial exception applies ‘‘[w]hen a 

school with a religious mission entrusts 

a teacher with the responsibility of 

educating and forming students in the 

faith’’). These decisions are discussed in 

the final rule’s analysis as appropriate 

and applicable. 

In this final rule, OFCCP has sought 

to follow the principles articulated by 

these recent decisions and orders, and 

has interpreted older federal appellatelevel case law in light of them as 

applicable. OFCCP has chosen a path 

consistent with the Supreme Court’s 

religion and Title VII jurisprudence as 

well as what OFCCP views to be the 

more persuasive reasoning of the federal 

courts of appeals in these areas of the 

law. 

A. Title VII and the EEOC Generally 

Some commenters on the NPRM 

agreed that OFCCP’s proposal was 

appropriately consistent with Title VII 

principles. For example, a faith-based 

advocacy organization commented that 

the religious employer exemption in 

federal contracting regulations is 

modeled on Title VII, and should 

therefore be understood ‘‘in the strong 

way’’ the Title VII exemptions have 

traditionally been understood. 

Other commenters asserted that 

OFCCP’s proposal was inconsistent with 

Title VII overall. Some of these 

commenters stated that the proposal’s 

interpretation of the exemption was 

contrary to congressional intent. For 

example, an affirmative action 

professionals association commented 

that Congress has repeatedly declined to 

extend the Title VII exemption to 

government-funded entities. A lesbian, 

gay, bisexual, and transgender (LGBT) 

rights advocacy organization 

commented that, at the time Title VII 

was enacted, Congress could not have 

envisioned that religious organizations 

that would qualify for the Title VII 

exemption would also seek to contract 

with the federal government, ‘‘let alone 

be given a broad right to discriminate 

based on religion while accepting 

federal funding.’’ 

In a related vein, OFCCP also received 

comments objecting generally to the 

provision of a religious exemption for 

federal contractors or specifically to 

OFCCP’s proposal. Most of these 

commenters characterized the religious 

exemption as taxpayer- or governmentfunded discrimination that was contrary 

to the purpose of E.O. 11246. For 

example, an affirmative action 

professionals association commented 

that ‘‘[t]he Federal Government should 

not be in the business of funding 

employment discrimination’’ and 

emphasized that religious organizations 

should not expect to maintain autonomy 

and independence from the government 

when they solicit and accept 

government contracts. An international 

labor organization submitted a similar 

comment, stating that organizations that 

choose to accept government funding 

through government contracts should 

not be allowed to conduct what it 

described as discrimination against 

qualified job applicants and employees. 

Relatedly, a public policy research 

and advocacy organization commented 

that no one should be disqualified from 

a taxpayer-funded job because they are 

the ‘‘wrong’’ religion or do not adhere 

to any religion. A technology company 

commented that the proposal conflicted 

with the spirit of nondiscrimination 

law. A group of U.S. Senators 

commented: ‘‘The government cannot 

use religious exemptions as a pretext to 

permit discrimination against or harm 

others.’’ 

Some religious organizations were 

among the commenters that opposed the 

provision of a religious exemption for 

federal contractors. One religious 

organization commented that, in line 

with its commitment to religious 

freedom, it opposed granting 

government contracts to organizations 

that, in its words, discriminate against 

qualified individuals based on their 

practices and beliefs. One religious 

organization commented that barring 

people from taxpayer-funded jobs based 

on their faith violates principles of 

equality and meritocracy. Another faithVerDate Sep<11>2014 17:33 Dec 08, 2020 Jkt 253001 PO 00000 Frm 00003 Fmt 4701 Sfmt 4700 E:\FR\FM\09DER2.SGM 09DER2

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based organization cited First 

Amendment separation of church and 

state principles, and commented that, 

while some religious organizations hire 

staff based on religion, accommodations 

for religious hiring should not be 

applied broadly in the federal contracts 

context, as federal contracts are not 

provided to advance religious ends. 

Other commenters stated that the 

proposal’s expansion of the exemption 

was contrary to Title VII case law or 

principles. For example, an 

international labor organization 

commented that, in its view, the 

proposed rule mischaracterized federal 

case law in order to transform 

provisions designed to protect workers 

from religious discrimination into 

exemptions that would allow federally 

funded employers to discriminate 

against workers for religious reasons. 

Some commenters stated that the 

proposal was inconsistent with the 

interpretation of Title VII by the EEOC, 

the agency primarily responsible for 

enforcing Title VII. A group of state 

attorneys general commented that 

OFCCP should not undermine the 

EEOC’s efforts, ‘‘as would occur under 

the Proposed Rule, which takes 

positions contrary to the EEOC.’’ The 

state attorneys general asserted that the 

proposal would not increase clarity 

because it would create two separate 

legal standards for federal contractors 

and OFCCP staff—one under Title VII 

and one under E.O. 11246. A contractor 

association asserted that ‘‘federal 

contractors could face the Hobson’s 

choice of determining whether 

compliance with an OFCCP regulation 

will result in liability under Title VII.’’ 

Other commenters stated that the 

overall proposal departed from OFCCP’s 

prior interpretation, which they asserted 

had been consistent with the EEOC’s 

interpretation of Title VII prior to 

August 2018, when OFCCP issued 

Directive 2018–03, concerning the 

religious exemption in section 204(c) of 

E.O. 11246. For example, a public 

policy research and advocacy 

organization asserted that, until August 

2018, the Department consistently 

interpreted the E.O. 11246 religious 

exemption narrowly to permit 

preferences for coreligionists by certain 

religious organizations, and applied the 

‘‘motivating factor’’ test to evaluate 

claims of discrimination. 

OFCCP agrees with the comments 

stating that the rule will provide 

necessary clarity for contractors and 

potential contractors about the scope of 

the E.O. 11246 religious exemption. 

Regarding comments that a religious 

exemption protecting government 

contractors is contrary to congressional 

intent or that such an exemption is 

misplaced in the government 

contracting context, that question is not 

at issue in this rulemaking. The 

religious exemption was added to E.O. 

11246 almost twenty years ago, and 

OFCCP’s implementing regulations are 

nearly as old. The existence of the 

exemption itself is not at issue in this 

rulemaking. 

Regarding comments that the rule 

deviates from the EEOC’s interpretation 

of the Title VII religious exemption or 

creates two separate standards, OFCCP 

believes these concerns are unfounded. 

This rule is restricted to the application 

of the religious exemption. The vast 

majority of contractors and their 

employees, as well as OFCCP’s 

enforcement program, will be unaffected 

by this rule. As for the religious 

exemption specifically, OFCCP has 

followed the Title VII case law it finds 

most persuasive, especially in light of 

the principles of religious equality and 

autonomy reinforced by recent 

executive orders and Supreme Court 

decisions. OFCCP has also adapted Title 

VII principles to ensure a proper fit in 

the government contracting context. 

OFCCP’s specific choices in this regard 

and how they compare to the EEOC’s 

stated views are explained more fully in 

the section-by-section discussion and a 

section at the end of this preamble. 

OFCCP has also made some revisions to 

align this rule even more closely with 

Title VII. But even assuming any 

variation with the EEOC as to the 

exemption, this rule does not create a 

‘‘Hobson’s choice’’ for government 

contractors. The exemption, to describe 

it most broadly, is an optional 

accommodation for religious 

organizations, not a requirement 

mandating compliance. In the rare, 

hypothetical instance where a 

contractor would be entitled to the E.O. 

11246 exemption but not the Title VII 

exemption, the contractor would not 

face conflicting liability regardless of its 

choice: Rather, it would face potential 

liability under one enforcement scheme 

rather than two. OFCCP acknowledges 

that it is often helpful to regulated 

parties for regulators to try to harmonize 

their approaches when enforcing related 

legal requirements. OFCCP believes its 

approach here is consistent with Title 

VII and religious-accommodation 

principles, adapted appropriately to its 

own regulatory context and the 

government contracting community. 

OFCCP also is not concerned about 

this rule purportedly decreasing clarity 

by creating two standards for additional 

reasons. For one, it was not a concern 

primarily raised by commenters who 

may qualify for the E.O. 11246 religious 

exemption. Those commenters—the 

ones who would actually need to 

negotiate the purportedly two different 

standards—were by and large 

supportive of the rule and did not raise 

this concern. For another, OFCCP 

believes that this rule, which 

incorporates many recent Supreme 

Court decisions and other case law and 

is in accord with recent Executive 

Orders and guidance from the 

Department of Justice, offers clarity as 

compared to less recent guidance from 

EEOC that does not incorporate these 

more recent developments. 

B. The Relevance of Recent Supreme 

Court Cases 

Commenters both supported and 

opposed OFCCP’s acknowledgement of 

recent Supreme Court cases granting 

antidiscrimination protections for 

persons bringing religious claims in a 

variety of contexts. These cases 

included Hobby Lobby, Trinity 

Lutheran, and Masterpiece Cakeshop. 

Supreme Court decisions in 

employment and religion cases issued 

after the proposed rule’s publication are 

addressed elsewhere in the preamble as 

appropriate. 

Some commenters expressed support 

for OFCCP’s interpretations of these 

Supreme Court cases and their 

application to the proposal in general. 

For example, a group of members of the 

U.S. House of Representatives noted 

approvingly that the proposed rule was 

consistent with these cases, each of 

which ‘‘came with the cost’’ of religious 

Americans shouldering the material, 

emotional, and spiritual burdens 

associated with litigating issues related 

to their faith. Discussing Masterpiece 

Cakeshop, a religious public policy 

women’s organization commented that 

the Supreme Court in that case 

acknowledged ‘‘the blatant, systematic 

government bias’’ against the owner of 

Masterpiece Cakeshop for refusing to 

participate in a same-sex wedding 

ceremony, noting that the owner 

continues to be harassed for his faith ‘‘to 

this day.’’ The commenter stated that 

this and other such cases prove that 

further clarification regarding existing 

First Amendment protections are 

necessary. Addressing Trinity Lutheran, 

a religious public policy advocacy 

organization asserted that the Supreme 

Court in that case made clear that 

Trinity Lutheran Church’s status as a 

church did not prevent it from 

participating on an equal playing field 

with secular organizations in seeking 

government grants. The commenter 

continued that OFCCP’s proposed rule 

simply reaffirmed a principle the 


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Supreme Court had held to be 

consistent with the First Amendment. 

Other commenters criticized OFCCP’s 

reliance on these Supreme Court cases. 

Many of these commenters stated that 

the cases were inapplicable because 

they did not involve federal contractors. 

For example, a secular humanist 

advocacy organization criticized the 

proposed rule for its reliance on case 

law unrelated to employment 

discrimination laws or the text of E.O. 

11246. Many of the commenters stated 

that the cases cited, if interpreted 

properly, did not provide support for 

OFCCP’s proposal. For example, a labor 

union commented that the decisions 

cited did not authorize ‘‘the expansive 

view that the Proposed Rule seeks to 

support.’’ A group of U.S. Senators 

commented: ‘‘The Court has long held 

federally-funded employers cannot use 

religion to discriminate. Each of the 

cases cited in the proposed rule are 

consistent with that approach.’’ 

Many of the commenters who 

criticized OFCCP’s discussion of 

Masterpiece Cakeshop pointed to this 

sentence from the Court’s opinion: 

‘‘While . . . religious and philosophical 

objections are protected, it is a general 

rule that such objections do not allow 

business owners and other actors in the 

economy and in society to deny 

protected persons equal access to goods 

and services under a neutral and 

generally applicable public 

accommodations law.’’ 138 S. Ct. at 

1727. A labor union asserted that 

Masterpiece Cakeshop was irrelevant in 

the ‘‘entirely secular’’ context of federal 

contracting, and argued that the 

Establishment Clause dictates that 

federal contracting must be entirely 

secular. A transgender civil rights 

organization commented that, in the 

proposed rule, OFCCP did not suggest 

that its existing requirements or prior 

conduct reflect the sort of hostility to 

religious beliefs that the Court was 

concerned with in Masterpiece 

Cakeshop, and noted that, on the 

contrary, ‘‘EEO requirements for federal 

contractors fall squarely within the 

‘general rule’ stated by the Court.’’ A 

group of state attorneys general 

commented that, if anything, 

Masterpiece Cakeshop stands for the 

proposition that overly broad religious 

objections to civil rights laws of general 

applicability are inappropriate. 

Commenters also criticized OFCCP’s 

discussion of Trinity Lutheran. Many of 

these commenters read the decision 

narrowly—as holding that ‘‘the state 

violated the First Amendment by 

denying a public benefit to an otherwise 

eligible recipient solely on account of its 

religious status,’’ as one contractor 

association described it—and asserted 

that the decision was therefore 

inapplicable to OFCCP’s proposal. Some 

of these commenters pointed to a 

footnote in the Court’s opinion limiting 

it to ‘‘express discrimination based on 

religious identity with respect to 

playground resurfacing.’’ Trinity 

Lutheran, 137 S. Ct. at 2024 n.3. Many 

commenters stated that there are legally 

significant distinctions between 

government grant programs and 

government contracts. A labor union 

argued, regarding the Supreme Court’s 

decision, that it would have been 

perfectly lawful for the government to 

deny grants to religious applicants who 

restricted access to their playgrounds on 

the basis of sexual orientation, for 

example. The union also asserted that 

‘‘Federal contracting is not a generally 

available public benefit, but a 

reticulated system for the funding and 

delivery of governmental functions and 

services by private parties.’’ A religious 

organization commented that Trinity 

Lutheran did not address whether a 

religious institution can discriminate 

with public funds, and stressed that the 

government’s interest in prohibiting 

discrimination in taxpayer-funded jobs 

is ‘‘of the highest order.’’ A group of 

state attorneys general commented that 

the Court’s decision drew a careful 

distinction between situations where a 

benefit is denied to an entity based 

solely that entity’s religious identity and 

situations involving neutral and 

generally applicable laws that restrict an 

entity’s actions. The group asserted that 

E.O. 11246’s anti-discrimination 

provisions are directed toward the 

latter. An LGBT rights advocacy 

organization commented that, because 

the decision involved a religious grant 

applicant that had agreed to abide by 

certain nondiscrimination provisions, 

its holding was inapplicable in the 

federal contracting context where 

funding is awarded on a competitive 

basis, as well as in situations where the 

contractor has no intention of 

complying with governing 

nondiscrimination rules. 

Some commenters similarly criticized 

OFCCP’s discussion of Hobby Lobby. 

Many of these commenters quoted or 

paraphrased the following paragraph 

from the Supreme Court’s decision: 

The principal dissent raises the possibility 

that discrimination in hiring, for example on 

the basis of race, might be cloaked as 

religious practice to escape legal 

sanction. . . . Our decision today provides 

no such shield. The Government has a 

compelling interest in providing an equal 

opportunity to participate in the workforce 

without regard to race, and prohibitions on 

racial discrimination are precisely tailored to 

achieve that critical goal. 

Hobby Lobby, 573 U.S. at 733. For 

example, a city public advocate argued 

that the Hobby Lobby decision affirmed 

that securing equal access to workplace 

participation is a compelling interest. A 

civil liberties and human rights legal 

advocacy organization commented that 

the Court in Hobby Lobby expressly 

declined to promulgate a rule 

authorizing for-profit corporations that 

willingly enter into contracts with the 

federal government to discriminate 

against workers ‘‘because of who they 

are.’’ A contractor organization 

commented that it is ‘‘not at all clear’’ 

that Hobby Lobby supports the idea that 

religious rights override any other legal 

rights, given that the decision concerns 

only the availability of government 

programs. 

Finally, some commenters criticized 

OFCCP’s discussion of Hosanna-Tabor. 

Many of these commenters pointed out 

that this case applied the 

(constitutionally grounded) ministerial 

exception developed by courts and not 

the (statutory) Title VII religious 

exemption enacted by Congress. Some 

commenters expressed doubt that the 

ministerial exception was applicable to 

federal contractors. For example, a 

transgender legal professional 

organization commented that, though 

the ministerial exception bars ministers 

from pursuing employment 

discrimination cases, most federal 

contractors are unlikely to employ 

ministers or others who ‘‘preach or 

teach the faith.’’ Other commenters 

expressed concern that OFCCP intended 

to broaden the scope of the religious 

exemption to mimic the ministerial 

exception and asserted that HosannaTabor did not support such an 

expansion. For example, a labor union 

commented that the decision could not 

be read to extend the ministerial 

exception to lay people employed by 

religious institutions, or to private forprofit businesses whose owners may 

also hold religious beliefs. 

OFCCP believes the critical comments 

here are misplaced because OFCCP did 

not acknowledge these Supreme Court 

cases for the propositions that 

commenters said the agency did. OFCCP 

acknowledged in the NPRM that these 

Supreme Court cases did not 

specifically address government 

contracting. And indeed, with the 

exception of Hosanna-Tabor, they did 

not specifically address employment 

law, Title VII, or E.O. 11246. Rather, 

OFCCP noted the recent Supreme Court 

cases for the general and commonsense 

propositions that the government must 


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79328 Federal Register / Vol. 85, No. 237 / Wednesday, December 9, 2020 / Rules and Regulations 

3See, e.g., Nat’l Inst. of Family & Life Advocates 

v. Becerra, 138 S. Ct. 2361, 2368 (2018); 

Masterpiece Cakeshop, 138 S. Ct. at 1729–30; Holt 

v. Hobbs, 574 U.S. 352, 359 (2015). 

be careful when its actions may infringe 

private persons’ religious beliefs and 

that it certainly cannot target religious 

persons for disfavor. These principles 

are not new, but these recent cases show 

that those principles remain vital. That 

is especially important when 

government at times has been callous in 

its treatment of religious persons.3

Those general themes of caution, 

permissible accommodation, and 

equality for religious persons have 

informed the policy approach in this 

rule. Where specific holdings or 

language in these Supreme Court 

decisions—and additional Supreme 

Court decisions issued since—suggest 

answers to specific aspects of this rule, 

they are noted in the section-by-section 

analysis. Comments on those more 

specific issues are addressed there as 

well. 

C. Clarity and Need for the Rule 

The NPRM noted that prior to its 

publication, some religious 

organizations provided feedback to 

OFCCP that they were reluctant to 

participate as federal contractors 

because of uncertainty regarding the 

scope of the religious exemption 

contained in section 204(c) of E.O. 

11246 and codified in OFCCP’s 

regulations. The NPRM also noted that 

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.’’ 84 FR at 

41679. The NPRM also noted 

throughout OFCCP’s desire to provide 

clarity in this area of regulation. 

OFCCP received numerous comments 

addressing the need for the proposed 

rule. Some commenters stated that the 

proposal was necessary to ensure that 

religious entities could contract with the 

federal government without 

compromising their religious identities 

or missions. Many of these commenters 

noted the important services provided 

by religious organizations. For example, 

a religious school association 

encouraged the federal government to 

protect religious staffing ‘‘in all forms of 

federal funding,’’ asserting that doing so 

would enable religious organizations to 

expand the critical services they 

provide. A religious liberties legal 

organization likewise commented that 

religious organizations are often 

uniquely equipped to respond to the 

needs of the communities they serve 

and predicted that the proposal would 

allow religious contractors to better 

‘‘order[ ] their affairs.’’ A religious 

convention commission approved of the 

rule on the basis that the government 

should not be in the business of judging 

theology or privileging certain religious 

beliefs over others. 

A few commenters expressed support 

for the proposal specifically because 

they believed it would exempt religious 

organizations from the prohibitions on 

discrimination based on sexual 

orientation and gender identity that 

were added when E.O. 11246 was 

amended by Executive Order 13672 

(E.O. 13672). 79 FR 42971 (July 23, 

2014). For example, a faith-based 

advocacy organization praised OFCCP 

for ‘‘the important positive precedent 

that will be set by the proposed strong 

protection of the religious staffing 

freedom in the context of the 

requirement of no sexual-orientation or 

gender-identity employment 

discrimination in federal contracting.’’ 

An evangelical chaplains’ advocacy 

organization commented that ‘‘E.O. 

13672 . . . prohibited military 

chaplains from selecting religious 

support contractors who did not affirm 

sexual orientation, same-sex marriage 

and gender identity’’ in violation of 

these chaplains’ free exercise rights. 

Some commenters agreed with 

OFCCP’s observation that religious 

organizations have been reluctant to 

provide the government with goods or 

services as federal contractors because 

of the lack of clarity or perceived 

narrowness of the E.O. 11246 religious 

exemption. One individual commenter 

who identified himself as a legal adviser 

to federal contractors noted that 

imposing ‘‘pass through’’ contracting 

obligations on subcontractors can be 

challenging, as religious subcontractors 

often fear that complying with federal 

anti-discrimination laws will require 

them to compromise their religious 

integrity. Two other commenters offered 

examples or evidence of religious 

organizations’ reluctance to participate 

in other contexts, such as federal grants. 

A religious medical organization cited a 

survey suggesting that many individuals 

working in faith-based organizations 

(FBOs) overseas feel that the 

government is not inclined to work with 

FBOs, and called for outreach programs 

to correct this perception. 

A religious legal organization 

referenced an audit of the Department of 

Justice’s Office of Justice Programs (OJP) 

which revealed that, though religious 

organizations were interested in 

participating in many programs, ‘‘the 

percentage of OJP funds distributed to 

religious organizations to help the 

public through these programs was 

abysmally small—0.0025%.’’ The 

organization cited the concern of 

religious organizations that their right to 

hire members of their faith would be 

eroded as one of the reasons for this 

discrepancy. 

Many commenters expressed 

skepticism that religious organizations 

have been reluctant to participate as 

federal contractors because of the lack of 

clarity or perceived narrowness of the 

religious exemption. Most of these 

commenters stated that OFCCP had 

provided no evidence to support its 

claim. For example, a legal think tank 

commented that the proposal was ‘‘a 

regulation in search of a problem,’’ and 

criticized OFCCP for failing to provide 

data regarding the number of religious 

organizations reluctant to enter into 

federal contracts, the number of 

contractors that have invoked the 

Section 204(c) exemption in the past, 

and the number of contractors expected 

to avail themselves of the ‘‘expanded 

exemption’’ in the proposed rule. A 

labor union commented: ‘‘[T]here is no 

evidence that the current, settled 

interpretation of the E.O. 11246 

religious exemption has deterred 

organizations from submitting 

competitive bids for federal contracts or 

prevented them from obtaining such 

contracts. At best, the Proposed Rule is 

an unjustified rulemaking solution in 

search of a problem.’’ 

A few commenters stated that the 

proposal was unnecessary given the 

applicability of Title VII case law. For 

example, a contractor association 

commented that the extent to which 

religious employers can condition 

employment on religion has been 

addressed by a long line of Title VII 

cases, rendering an executive 

rulemaking on this topic unnecessary. 

Some commenters cited evidence that 

federal contracts are being awarded to 

faith-based organizations. For example, 

a group of state attorneys general cited 

the 2016 congressional testimony of 

Oklahoma Representative Steve Russell, 

who explained that more than 2,000 

federal government contracts were being 

awarded to religious organizations and 

contractors per year. As examples of 

faith-based organizations that were 

awarded contracts in the previous year, 

the state attorneys general listed the 

following: 

Army World Service Office ($27.5 million), 

Mercy Hospital Springfield ($14.4 million), 

Young Women’s Christian Association of 

Greater Los Angeles California ($10.2 

million), City of Faith Prison Ministries ($5.2 

million), Riverside Christian Ministries, Inc. 

($2.7 million), Jewish Child and Family 


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4The commenter cited USASPENDING.GOV, 

https://www.usaspending.gov/#/recipient. 

5See USA Spending, Spending Explorer (select 

Object Class, Fiscal Year 2019), https://

www.usaspending.gov/#/explorer/object_class. 

6See Brian J. Grim and Melissa E. Grim, ‘‘The 

Socio-economic Contribution of Religion to 

American Society: An Empirical Analysis,’’ 

Interdisciplinary Journal of Research on Religion, 

vol. 12 (2016), article 3, p. 10, 25, (describing 

revenues of faith-based charities, congregations, 

healthcare networks, educational institutions, and 

other organizations), www.religjournal.com/pdf/ 

ijrr12003.pdf. 

Services ($2.1 million), Catholic Charities, 

various affiliates (over $1 million in sum 

total), to name a few.4

In addition, several commenters cited a 

report from a progressive policy 

institute noting that some religious 

organizations continue to be federal 

contractors despite their objections to a 

lack of an expanded religious exemption 

in E.O. 13672. 

Some commenters expressed 

skepticism that the proposal would 

encourage participation in federal 

contracting because, they asserted, the 

rule as proposed would increase rather 

than reduce confusion. For example, a 

contractor association commented that 

OFCCP’s proposal would create more 

confusion than clarity for federal 

contractors. An atheist civil liberties 

organization echoed this concern, 

commenting that the proposal would 

increase confusion because, in its view, 

the proposed rule deviated from 

decades of Title VII law. Other 

commenters stated that the proposal 

would have negative effects because of 

increased uncertainty about or 

expansion of the exemption. These 

commenters stated that the proposal 

would undercut other entities’ 

enforcement of nondiscrimination 

obligations, increase EEOC enforcement 

actions, increase contractors’ 

noncompliance, and strain OFCCP’s 

resources. For example, a group of state 

attorneys general commented that, given 

the prevalence of workplace 

discrimination, expanding E.O. 11246’s 

religious organization exemption to 

lessen OFCCP’s oversight could result in 

employers claiming the exemption in 

bad faith when faced with charges of 

discrimination. The state attorneys 

general commented that the proposed 

rule had the potential to strain OFCCP’s 

limited resources due to employers 

requesting determinations of whether 

they are exempt, and challenging the 

applicability of OFCCP enforcement 

actions already underway. 

OFCCP appreciates the comments 

supporting its view that clarity 

regarding the exemption would be 

useful, and notes their accounts of 

religious organizations that are hesitant 

to participate as government 

contractors, as well as their evidence of 

a perception among faith-based 

organizations that the federal 

government could do more to 

demonstrate that it will select the best 

organizations for its partners, whether 

faith-based or not. Given certain 

statements by these commenters 

regarding discrimination on the basis of 

sexual orientation or gender identity, 

OFCCP repeats here as it did many 

times in the NPRM that the religious 

exemption does not permit 

discrimination on the basis of other 

protected categories. The section-bysection analysis of Particular religion 

addresses the application of the 

religious exemption and other legal 

requirements to E.O. 11246’s other 

protections including those pertaining 

to sexual orientation and gender 

identity, and the application of the 

Religious Freedom Restoration Act 

(RFRA) in certain situations. 

Regarding comments that the rule is 

unnecessary because religious 

organizations are not presently deterred 

from contracting with the government, 

OFCCP believes that clarifying the law 

for current contractors is a valuable goal 

in itself, regardless of whether more 

religious organizations would 

participate as federal contractors or 

subcontractors. The disputes among 

commenters over the proper 

interpretation of the Title VII case law 

suggests as well that the guidance 

provided by this rule would be valuable 

to the contracting community. And in 

fact, as just noted, other commenters 

offered evidence that faith-based 

organizations have indeed been 

reluctant to contract with the federal 

government because of the lack of 

certainty about the religious exemption. 

The fact that some faith-based 

organizations have been willing to enter 

into federal contracts or subcontracts 

does not mean that other faith-based 

organizations have not been reluctant to 

do so. Admittedly, OFCCP cannot 

perfectly ascertain how many religious 

organizations are government 

contractors, or would like to become 

such, and how those numbers compare 

to the whole of the contracting pool. But 

neither does OFCCP find persuasive 

commenters’ assertions that faith-based 

organizations are already wellrepresented among government 

contractors, when those assertions are 

based on examples showing contracting 

awards to them totaling only tens of 

millions, when the federal government 

expended $926.5 billion on contractual 

services in fiscal year 2019 5 and, 

according to one estimate, faith-based 

organizations account for hundreds of 

billions of dollars of economic activity 

annually in the United States.6 OFCCP 

disagrees that the rule will introduce 

confusion. OFCCP anticipates this rule 

will have no effect on the vast majority 

of contractors or the agency’s regulation 

of them, since they do not and would 

not claim the religious exemption. As 

commenters noted, religious 

organizations do not appear to be a large 

portion of federal contractors. While 

this rule may add clarity that 

encourages more religious organizations 

to seek to become federal contractors 

and subcontractors, OFCCP does not 

believe the increase will greatly 

influence the composition or behavior 

of the contractor pool that it regulates. 

The exemption is a helpful 

accommodation for this small minority 

of religious organizations that may seek 

its protection. For them specifically, the 

rule is intended to bring clarity. For 

instance, as explained below, this rule 

provides a clear three-part test for 

determining whether an entity can 

qualify for the exemption. Contrary to 

the assertions of some commenters, and 

as described more fully below, Title VII 

case law offers differing tests on a 

jurisdiction-by-jurisdiction basis, and 

some of those tests provide little 

guidance at all. As another example, 

this rule provides a clear approach to 

determining when a religious employer 

is appropriately taking action on the 

basis of an employee’s particular 

religion, another area where the case 

law is not uniform. 

OFCCP also disagrees that this rule 

will impede the agency’s enforcement 

efforts. OFCCP promulgates this rule 

from a position of familiarity with its 

own enforcement resources, priorities, 

and budget. For the reasons just stated 

above, OFCCP does not see this rule as 

significantly affecting the vast majority 

of its work. OFCCP also does not 

anticipate a flood of employers claiming 

the exemption in bad faith when faced 

with discrimination claims. That has 

not been the experience under the Title 

VII exemption thus far: The number of 

reported cases involving the exemption 

since 1964 are in the dozens, not the 

thousands. And in those cases, the 

employer may or may not have 

succeeded in claiming the exemption or 

defending against a discrimination 

claim, but in nearly all the employer did 

not appear to invoke the exemption 

nefariously, in bad faith. OFCCP is also 

optimistic given the federal 

government’s experience under the 

RFRA. This law provides generous 

accommodation for religious claims and 


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7See 42 U.S.C. 2000bb(a)(5) (‘‘[T]he compelling 

interest test as set forth in prior Federal court 

rulings is a workable test for striking sensible 

balances between religious liberty and competing 

prior government interests.’’); Holt, 574 U.S. at 368 

(rejecting the argument that the only workable rule 

is one of no exceptions); Gonzales v. O Centro 

Espı ́rita Beneficente Unia ̃ o do Vegetal, 546 U.S. 

418, 436 (2006) (rejecting ‘‘slippery-slope 

argument’’ that RFRA-mandated exceptions would 

become unworkable). 

strict boundaries for the federal 

government, yet neither the courts nor 

OFCCP have been inundated with 

claims.7

OFCCP appreciates all comments 

received, and for the reasons stated 

believes that proceeding with a final 

rule clarifying the religious exemption 

is warranted. For the small minority of 

current and potential federal contractors 

and subcontractors interested in the 

exemption, this will help them 

understand its scope and requirements 

and may encourage a broader pool of 

organizations to compete for 

government contracts, which will inure 

to the government’s benefit. For the vast 

majority of contractors, OFCCP does not 

expect this rule to affect their operations 

or OFCCP’s monitoring and 

enforcement. 

This final rule is an Executive Order 

13771 (E.O. 13771) deregulatory action 

because it is expected to reduce 

compliance costs and potentially the 

cost of litigation for regulated entities. 

Pursuant to the Congressional Review 

Act (5 U.S.C. 801 et seq.), OIRA 

determined that this rule is not a ‘‘major 

rule,’’ as defined by 5 U.S.C. 804(2). 

Details on the estimated costs of this 

rule can be found in the economic 

analysis below. 

II. Section-by-Section Analysis 

The NPRM proposed five new 

definitions to clarify key terms used in 

OFCCP’s religious exemption: Exercise 

of religion; Particular religion; Religion; 

Religious corporation, association, 

educational institution, or society; and 

Sincere. The regulatory codification of 

the underlying exemption itself—which 

is not at issue in this rulemaking—is 

found at 41 CFR 60–1.5(a)(5). The new 

definitions were proposed to be placed 

with the rest of the regulations’ 

generally applicable definitions at 41 

CFR 60–1.3. The NPRM also proposed 

adding a rule of construction to § 60–1.5 

to provide the maximum legally 

permissible protection of religious 

exercise. 

This final rule retains the same basic 

structure as the NPRM, with a few 

changes. First, there have been some 

modifications to some of the definitions, 

and one proposed definition, for 

Exercise of religion, is not included in 

the final rule, as explained below. 

Second, this final rule adds several 

illustrative examples within the 

definition of Religious corporation, 

association, educational institution, or 

society to better illustrate which 

organizations qualify for the religious 

exemption. Third, this final rule adds a 

severability clause. 

A. Section 60–1.3 Definitions 

The definitions added to § 60–1.3 are 

interrelated, so they are discussed below 

in a particular order. This order is 

different from that presented in the 

NPRM. The change in order is not 

substantive. The change is intended 

only to make the rule as a whole easier 

to understand. 

1. Definition of Religion 

OFCCP’s proposed definition of 

Religion provided that the term is not 

limited to religious belief but also 

includes all aspects of religious 

observance and practice. The proposed 

definition was identical to the first part 

of the definition of ‘‘religion’’ in Title 

VII: ‘‘The term ‘religion’ includes all 

aspects of religious observance and 

practice, as well as belief . . . .’’ 42 

U.S.C. 2000e(j). The proposed definition 

omitted the second portion of the Title 

VII definition, which refers to an 

employer’s accommodation of an 

employee’s religious observance or 

practice, because that would have been 

redundant with OFCCP’s existing 

regulations. OFCCP’s regulations at 41 

CFR part 60–50, Guidelines on 

Discrimination Because of Religion or 

National Origin, contain robust religious 

protections for employees, including 

accommodation language substantially 

the same as that in the portion of the 

Title VII definition omitted here. 

Compare 42 U.S.C. 2000e(j), with 41 

CFR 60–50.3. Those provisions continue 

to govern contractors’ obligations to 

accommodate employees’ and potential 

employees’ religious observance and 

practice. 

The proposed definition of Religion is 

used by other agencies. It is identical to 

the definition used by the Department of 

Justice in grant regulations 

implementing section 815(c) of the 

Justice System Improvement Act of 

1979. See 28 CFR 42.202(m). The Small 

Business Administration has used the 

same definition as well in its grant 

regulations. See 13 CFR 113.2(c). 

Some commenters generally 

supported the proposed definition, 

noting that it is legally sound, as it 

tracks the Title VII definition and 

provides broad protection for religious 

entities. Commenters also noted that the 

definition is sensible and will aid 

contractors in understanding the 

exemption. 

Other commenters argued that 

importing the definition from Title VII 

is inappropriate because the context of 

Title VII is protection of an employee’s 

individual religious beliefs in the 

workplace, not those of the employer. A 

legal professional organization raised 

the concern that this definition is 

overbroad as applied to the employer, 

particularly where it could allow a 

government-funded employer to make 

faith-based employment decisions 

beyond those currently allowed under 

Title VII and E.O. 11246. Commenters 

also objected to the omission of the 

second part of the Title VII definition, 

arguing that the weighing of the burden 

that an employee’s request for religious 

accommodations places on an employer 

is an important limitation on Congress’s 

intent to accommodate religion in the 

workplace. Commenters stated that, in 

their view, an employee’s requested 

accommodations may impose no more 

than a de minimis burden on the 

employer. Commenters argued that 

OFCCP’s proposed definition is broader 

than Congress intended in that it does 

not consider the burden the employer’s 

assertion of the religious exemption 

would impose on employees, thus 

allowing religious employers to take 

adverse actions against employees based 

on religious belief no matter the 

hardship it causes them. Some 

commenters argued that partially 

importing the Title VII definition would 

‘‘muddy the waters’’ rather than provide 

clarity. 

Other commenters requested 

clarification on the proposed definition 

of Religion. Specifically, some 

commenters proposed that the final rule 

clarify that ‘‘observance and practice’’ 

includes refraining from certain 

activities. Another commenter noted 

that the proposed rule did not explain 

the extent to which it might displace 

employees’ right to reasonable 

accommodation of their religious beliefs 

and practices if such accommodation 

conflicts with the contractor’s religion. 

For the reasons described above and 

in the NPRM, and considering the 

comments received, OFCCP is finalizing 

the proposed definition of Religion 

without modification. No change is 

needed to make clear that inaction or 

omission can be a form of ‘‘observance 

and practice.’’ See, e.g., Emp’t Div., 

Dep’t of Human Res. of Or. v. Smith, 

494 U.S. 872, 877 (1990) (holding the 

‘‘exercise’’ of religion protected by the 

First Amendment ‘‘involves not only 

belief and profession but the 

performance of (or abstention from) 

physical acts’’); see also Espinoza, 140 


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8The words ‘‘school, college, university, or 

institution of learning’’ also appear in 41 CFR 60– 

1.5(a)(6), the exemption for religious educational 

organizations. They were included in the definition 

to make clear that the definition’s listing of 

‘‘educational institution’’ includes schools, 

colleges, universities, and institutions of learning. 

Depending on the facts, an educational organization 

may qualify under the § 60–1.5(a)(5) exemption, the 

§ 60–1.5(a)(6) exemption, both, or neither. The 

inclusion of educational organizations is 

maintained in the final rule. 

9To be precise, Judge O’Scannlain’s formulation 

was that the entity be ‘‘organized for a selfidentified religious purpose (as evidenced by 

Articles of Incorporation or similar foundational 

documents).’’ World Vision, 633 F.3d at 734 

(O’Scannlain, J., concurring). Judge Kleinfeld noted 

that some people organize in religious bodies ‘‘with 

no corporate apparatus’’ and expressed concerns 

about the exemption being defeated by an 

‘‘[a]bsence of corporate papers.’’ Id. at 745 

(Kleinfeld, J., concurring). Judge Kleinfeld wrote 

that this ‘‘narrowness problem may be repairable by 

a tweak in the test,’’ id., which may be why the per 

curiam opinion does not include Judge 

O’Scannlain’s parenthetical referring to Articles of 

Incorporation. The difference is slight—a ‘‘tweak.’’ 

OFCCP’s approach to this first factor, including the 

necessary evidence to satisfy it, is discussed below 

in this preamble. 

S. Ct. at 2277 (Gorsuch, J., concurring) 

(‘‘The right to be religious without the 

right to do religious things would hardly 

amount to a right at all.’’). 

OFCCP disagrees with commenters 

who argued that the definition of 

Religion is overbroad and would permit 

contractors to make faith-based 

employment decisions beyond those 

permitted by law. The definition is the 

same as that used in other federal 

regulations and the same as that used in 

Title VII when read in conjunction with 

the rest of OFCCP’s regulations. The 

definition must also be construed in 

harmony with those regulations, the 

requirements of which remain in force 

just as strongly as before this 

regulation’s promulgation. 

OFCCP also disagrees that it should 

import the second half of Title VII’s 

definition of religion into its general list 

of definitions in § 60–1.3. OFCCP’s 

regulations in part 60–50 governing 

protection of employees’ religion and 

national origin already contain this 

language and remain in force, and 

employers must continue to comply 

with them. The definition of Religion 

added to § 60–1.3 is intended to apply 

generally, to both employers and 

employees. 

Regarding comments about burden on 

employees’ exercise of religion, OFCCP 

looks to the functioning of the religious 

exemption. E.O. 11246, like Title VII, 

requires employers to accommodate 

employees’ religious practices to a 

prescribed extent. But the religious 

exemption is precisely that: An 

exemption that relieves ‘‘religious 

organizations from Title VII’s [or E.O. 

11246’s] prohibition against 

discrimination in employment on the 

basis of religion.’’ Amos, 483 U.S. at 

329. That logically includes a lesser 

exemption from the duty to 

accommodate religious practice. While 

religious organizations can 

accommodate employees’ religious 

practices, and in many instances may 

find that desirable, under the 

exemption, they are not required to do 

so. See Kennedy v. St. Joseph’s 

Ministries, Inc., 657 F.3d 189, 194 (4th 

Cir. 2011). 

2. Definition of Religious Corporation, 

Association, Educational Institution, or 

Society 

One of the primary objectives of this 

rulemaking is to clarify the conditions 

of eligibility for the religious exemption. 

Thus the NRPM proposed a definition of 

Religious corporation, association, 

educational institution, or society. This 

term is used in E.O. 11246 section 

204(c) and 41 CFR 60–1.5(a)(5), and it 

is the same term used in the Title VII 

religious exemption at 42 U.S.C. 2000e– 

1(a). The definition as proposed would 

apply to a corporation, association, 

educational institution, society, school, 

college, university, or institution of 

learning.8

As explained in the NPRM, clarity on 

this topic is essential because federal 

courts of appeals have used a confusing 

variety of tests, and the tests themselves 

often involve unclear or constitutionally 

suspect criteria. The NPRM favored, 

with some modifications, the test used 

by the U.S. Court of Appeals for the 

Ninth Circuit in Spencer v. World 

Vision, Inc., 633 F.3d 723 (9th Cir. 2011) 

(per curiam). This was for several 

reasons, including because the World 

Vision test generally prevents invasive 

inquiries into matters of faith, the 

uncertainty and subjectivity of a 

multifactor balancing test, and the 

inherently difficult and constitutionally 

suspect exercise of measuring the 

quantum of an organization’s religiosity. 

See 84 FR 41681–84. 

The controlling per curiam opinion in 

World Vision offered a four-pronged test 

for determining an entity’s qualification 

for the religious exemption: 

an entity is eligible for the . . . exemption, 

at least, if it is [1] organized for a religious 

purpose, [2] is engaged primarily in carrying 

out that religious purpose, [3] holds itself out 

to the public as an entity for carrying out that 

religious purpose, and [4] does not engage 

primarily or substantially in the exchange of 

goods or services for money beyond nominal 

amounts. 

World Vision, 633 F.3d at 724 (per 

curiam). 

This four-pronged test reflects the 

overlap of agreement between the two 

judges in the majority, Judges 

O’Scannlain and Kleinfeld, who also 

each wrote separate concurrences that 

laid out their own preferred tests. Both 

judges agreed on the first two prongs, 

that the entity be organized for a 

religious purpose9 and hold itself out to 

the public as carrying out that religious 

purpose. The third and fourth prongs 

reflect Judge Kleinfeld’s view. See id. at 

748 (Kleinfeld, J., concurring). 

Regarding the third prong, Judge 

O’Scannlain would have employed a 

broader formulation, requiring that the 

employer engage ‘‘in activity consistent 

with, and in furtherance of, those 

[founding] religious purposes.’’ Id. at 

734 (O’Scannlain, J., concurring). As to 

the fourth prong, Judge Kleinfeld 

restricted the exemption to 

organizations that charge little or 

nothing for their goods or services, 

regardless of their formal incorporation 

as a nonprofit organization. See id. at 

745–47 (Kleinfeld, J., concurring). Judge 

O’Scannlain would have broadened the 

fourth prong (in most instances) by 

requiring nonprofit status, including 

nonprofit organizations that charge 

market rates for their goods or services. 

See id. at 734 (O’Scannlain, J., 

concurring). 

The NPRM proposed to follow a 

modified World Vision test. The NPRM 

proposed adopting the first two prongs 

of the per curiam opinion. The NPRM 

favored Judge O’Scannlain’s formulation 

of the second prong given the significant 

constitutional difficulties that 

accompany determining whether an 

organization is ‘‘primarily’’ religious. 

The NPRM also proposed to revise 

Judge O’Scannlain’s phraseology, that 

the entity be engaged ‘‘in activity’’ 

consistent with those religious 

purposes, with the requirement that the 

entity be engaged ‘‘in exercise of 

religion’’ consistent with a religious 

purpose. No material change was 

intended by this adjustment; it was 

meant to capture in succinct regulatory 

text Judge O’Scannlain’s lengthy 

discussion that the kind of activity 

contemplated under this prong is 

religious exercise. See 84 FR at 41683; 

see also World Vision, 633 F.3d at 737– 

38 (O’Scannlain, J., concurring). Finally, 

the NPRM proposed not to adopt the 

fourth prong of the test, on grounds that 

a no-charging rule would exclude many 

bona fide religious organizations, 

especially in the government 

contracting context, and that an absolute 

bar on for-profit organizations was 

tenuous given other court decisions and 

the Supreme Court’s more recent 

decision in Hobby Lobby. See 84 FR at 


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41684. The proposed rule could also be 

viewed as essentially following Judge 

O’Scannlain’s concurrence save for his 

requirement that the entity be nonprofit 

to qualify for the exemption. 

In response to comments and a 

subsequent reevaluation of World Vision 

and other case law, OFCCP is revising 

the proposed regulatory text in this final 

rule. The final rule’s test can be viewed 

as generally adopting Judge 

O’Scannlain’s concurrence in World 

Vision, including by adopting a fourth 

prong. Satisfaction of this test will be 

sufficient to qualify for the exemption, 

and OFCCP believes that this is the 

means by which most organizations 

interested in the exemption will qualify. 

However, OFCCP acknowledges that in 

certain rare circumstances, an 

organization might not satisfy the nonprofit prong of the World Vision test yet 

still present strong evidence that it 

possesses a substantial religious 

purpose. Thus the regulatory text 

includes an alternative means of 

satisfying the fourth prong: When an 

organization does not operate on a notfor-profit basis, it must present ‘‘other 

strong evidence that it possesses a 

substantial religious purpose.’’ The final 

rule also adds several examples to 

illustrate how the test will be applied. 

The final rule also adds a clarifying 

provision regarding the meaning of 

‘‘consistent with and in furtherance of’’ 

a religious purpose, a phrase used in 

one of the test’s prongs. The Department 

does not anticipate many for-profit 

organizations claiming the exemption, 

and as explained through the examples 

and their accompanying discussion, it 

may be quite difficult for such 

organizations to do so. 

This section of the preamble 

addresses this topic as well as other 

comments regarding OFCCP’s proposed 

definition of Religious corporation, 

association, educational institution, or 

society. OFCCP believes its definition is 

reasonable in light of Title VII and 

Supreme Court case law and that it will 

contribute to one of OFCCP’s primary 

goals in this rulemaking, which is to 

increase economy and efficiency in 

government contracting by providing for 

a broader pool of government 

contractors and subcontractors. Issues 

specific to the EEOC’s view on this 

matter are also discussed below and 

later in a separate part of this preamble. 

a. The Selection of World Vision as the 

Basis for the Religious Organization Test 

OFCCP received numerous public 

comments on its proposed definition, 

including comments on OFCCP’s 

discussion of the shortcomings in some 

Title VII case law. Some commenters 

agreed that OFCCP should reject nonWorld Vision tests based on these 

shortcomings. For example, a religious 

legal organization commented that the 

proposed test ‘‘eliminates the 

subjectivity inherent in the LeBoon 

tests. It further eliminates the 

Establishment Clause violation present 

when a court determines whether an 

organization is ‘religious enough,’ and it 

also prevents inter-religion 

discrimination.’’ 

Some commenters who supported 

OFCCP’s proposed definition 

commented that it provided important 

clarification that would be helpful to 

religious organizations in meeting their 

missions. For example, a religious 

school association commented that the 

proposal is especially important 

considering that local control and 

leadership are central to many of its 

participating schools’ beliefs. A 

religious charities organization 

commented that the proposed definition 

would help it advance its mission of 

providing essential services to people in 

need—a mission rooted in its religious 

convictions. 

Other commenters disagreed with 

OFCCP’s characterization of the existing 

religious employer tests in Title VII case 

law. For example, a legal professional 

organization noted that courts have 

generally agreed that the following 

factors are relevant in deciding whether 

an organization qualifies for the 

religious exemption: (1) The purpose or 

mission of the organization; (2) the 

ownership, affiliation, or source of 

financial support of the organization; (3) 

requirements placed upon staff and 

members of the organization; and (4) the 

extent of religious practices in or the 

religious nature of products and services 

offered by the organization. 

Other commenters opposed the 

proposed definition because they 

viewed it as too broad and unsupported 

by Title VII case law. For example, an 

organization that advocates separation 

of church and state asserted that the 

definition in the proposed rule has not 

been proposed or used by any federal 

court and represents an attempt by 

OFCCP to vastly expand the scope of the 

existing narrow exemption. A labor 

organization likewise commented that, 

in its view, the definition in the 

proposed rule is contrary to law and 

does not reflect the Title VII definition. 

Some commenters objected generally 

to OFCCP’s selection or modification of 

the World Vision test. For example, one 

contractor association commented that 

the proposed rule removes critical limits 

on the standard set forth by Judge 

O’Scannlain. Another contractor 

association emphasized that World 

Vision involved the removal of two 

employees by a religious organization 

based on the employees’ failure to 

adhere to the organization’s religious 

views. Therefore, according to the 

association, the World Vision test 

should not apply to for-profit 

organizations holding themselves out as 

religiously motivated. A group of U.S. 

Senators criticized the proposal not only 

for adopting the test set forth in the 

concurrence, but also for modifying part 

of that test. 

A legal think tank asserted that 

OFCCP appeared to have created its 

own test, designed to qualify more types 

of contractors for the exemption. This 

commenter went on to say that the 

‘‘exceedingly more expansive criteria’’ 

proposed by OFCCP are untethered to 

Title VII case law and not in line with 

the ‘‘measured’’ exemption required by 

the Establishment Clause, quoting 

Cutter v. Wilkinson, 544 U.S. 709, 722 

(2005) (‘‘Our decisions indicate that an 

accommodation [of religious 

observances] must be measured so that 

it does not override other significant 

interests.’’). 

As explained in the NPRM, OFCCP 

believes that a LeBoon-type test invites 

subjectivity and uncertainty. See 

LeBoon v. Lancaster Jewish Cmty. Ctr. 

Ass’n, 503 F.3d 217 (3d Cir. 2007). That 

is problematic in any circumstance, but 

especially so in the context of 

government contracting, where parties’ 

obligations should be as clear as 

possible. OFCCP also declines to 

attempt to write a definition that 

purports to synthesize all the Title VII 

case law on this subject. OFCCP is 

doubtful that such a task could be done, 

especially given Judge O’Scannlain’s 

observation (with which Judge Kleinfeld 

agreed) that several factors used by 

other courts are constitutionally 

suspect, including, contrary to the 

commenter’s suggestion above, an 

assessment of the religious nature of an 

organization’s products and services. 

See World Vision, 633 F.3d at 730–32 

(O’Scannlain, J., concurring); id. at 741 

(Kleinfeld, J., concurring). OFCCP’s 

approach in the final rule, like World 

Vision, instead requires consideration of 

a discrete set of factors that can be 

reliably ascertained in each case. 

OFCCP acknowledges that the 

definition it is promulgating here 

modifies the World Vision test in some 

respects, or alternatively can be viewed 

as following Judge O’Scannlain’s 

concurrence with one addition. OFCCP 

describes those modifications in more 

detail below along with its reasons for 

making them, including the need to 

provide clarity to contractors and 

enforcement staff. OFCCP disputes the 


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relevance of commenters’ assertions that 

these modifications are being made for 

the purpose of qualifying more 

organizations for the exemption. OFCCP 

acknowledges that the modifications 

may allow marginally more 

organizations to qualify for the 

exemption and that the final rule is 

intended to increase the pool of federal 

contractors. But, as described herein, 

OFCCP believes the test adopted by this 

final rule is appropriately measured and 

serves the purpose of qualifying only 

genuinely religious organizations for the 

exemption. 

b. OFCCP’s Application of the 

Definition Generally 

The NPRM proposed how OFCCP 

would apply the factors in its proposed 

test for religious organizations. The 

NPRM stated ‘‘that it would be 

inappropriate and constitutionally 

suspect for OFCCP to contradict a claim, 

found to be sincere, that a particular 

activity or purpose has religious 

meaning’’; that ‘‘all the factors . . . are 

determined with reference to the 

contractor’s own sincerely held view of 

its religious purposes and the religious 

meaning (or not) of its practices’’; and 

that the proposed three-factor test 

would be exclusive ‘‘stand-alone 

components and not factors guiding an 

ultimate inquiry into whether an 

organizations is ‘primarily religious’ or 

secular as a whole.’’ 84 FR at 41682–83. 

The NPRM proposed this approach 

for several reasons. The NPRM relied on 

World Vision’s concerns about courts’ 

substituting their own judgment for 

what has religious meaning when the 

question is disputed: ‘‘The very act of 

making that determination . . . runs 

counter to the ‘core of the constitutional 

guarantee against religious 

establishment.’ ’’ World Vision, 633 F.3d 

at 731 (O’Scannlain, J., concurring) 

(quoting New York v. Cathedral Acad., 

434 U.S. 125, 133 (1977)). ‘‘[I]nquiry 

into . . . religious views . . . is not only 

unnecessary but also offensive. It is well 

established . . . that courts should 

refrain from trolling through a person’s 

or institution’s religious beliefs.’’ Id. 

(alterations in original) (quoting 

Mitchell v. Helms, 530 U.S. 793, 828 

(2000) (plurality opinion) (internal 

quotation marks omitted)). Further, such 

inquiries could lead to discrimination 

among religions. See id. at 732 & n.8. 

The NPRM also drew on Supreme Court 

and Title VII case law showing the 

constitutional and practical difficulties 

of determining whether a particular 

religious belief is ‘‘central’’ to one’s faith 

or whether an organization is 

‘‘primarily’’ religious. See 84 FR at 

41682–83. 

Commenters expressed a variety of 

views on the NPRM’s proposed 

approach. Some were supportive. For 

instance, a religious legal organization 

commented that Judge O’Scannlain’s 

test requires little judicial ‘‘‘trolling’ 

through’’ an organization’s religious 

beliefs, because it is based exclusively 

on information the organization makes 

public. Relatedly, the same commenter 

observed that OFCCP staff can easily 

and consistently apply the test, with 

positive implications for the rule of law. 

Other commenters objected generally to 

OFCCP’s description of how it would 

determine whether a contractor had met 

the test. For example, a civil liberties 

organization expressed concern that 

OFCCP would not enforce baseline 

evidentiary standards in determining 

whether an entity meets the test’s 

factors. A contractor association 

commented that the modified World 

Vision test ‘‘is unclear on its face and 

problematic in application.’’ A 

transgender civil rights organization 

commented that the test relies on illdefined criteria that must be measured 

from the perspective of the employer. 

Many of the commenters who 

opposed the proposed definition 

expressed concern that it would have 

negative consequences. For example, a 

legal professional association asserted 

that the proposal would allow even 

nominally religious entities to 

discriminate on the basis of religion in 

hiring, potentially exposing them to 

legal liability under federal and state 

law despite their ability to retain their 

status as federal contractors. A group of 

state attorneys general stated that 

OFCCP’s proposed test represents a 

sharp departure from precedent and 

thus would be difficult for OFCCP staff 

and adjudicators to apply. The attorneys 

general also commented that the test 

would likely cause non-compliance by 

increasing legal uncertainty about 

which organizations qualify. 

Other commenters requested clarity. 

Regarding the NPRM’s statement that 

the three factors would be standalone 

provisions rather than factors guiding an 

ultimate ‘‘primarily religious’’ inquiry, a 

contractor association commented that, 

in its view, the statement was unclear 

and did not lend credence to OFCCP’s 

assertion that the test would be easy to 

apply or likely to be consistent in 

application. The commenter asked for 

clarification as to how OFCCP would 

apply the factors of the test as 

standalone factors, rather than as factors 

leading to the ultimate determination 

whether the contractor is primarily 

religious or secular. The commenter 

sought explanation from OFCCP as to 

how it could easily conduct the required 

analysis when even the courts struggle 

to do so. The commenter requested 

more specific examples of how the 

proposed test will apply and asked that 

the contractor community be consulted 

before a test is adopted. 

OFCCP appreciates these comments 

and has re-reviewed World Vision and 

other relevant case law in light of them. 

World Vision and its antecedent cases in 

the Ninth Circuit, as well as LeBoon in 

the Third Circuit, begin from the 

premise that the religious exemption 

should cover only organizations that 

are, in fact, primarily religious. But 

courts have labored over how to 

operationalize that requirement into a 

set of factors that can be applied 

neutrally, objectively, and with minimal 

constitutional entanglement. See World 

Vision, 633 F.3d at 729 (O’Scannlain, J., 

concurring) (‘‘Though our precedent 

provides us with the fundamental 

question—whether the general picture 

of World Vision is primarily religious— 

we must assess the manner in which we 

are to answer that question in the case 

at hand.’’); LeBoon, 503 F.3d at 226. 

That does not mean that courts have 

dispensed with an organization’s need 

to present evidence in order to claim the 

exemption. Rather, it means that the 

evidence required must be of a kind that 

courts are competent to evaluate and 

that avoids entanglement. See World 

Vision, 633 F.3d at 730–33 

(O’Scannlain, J., concurring); cf. NLRB 

v. Catholic Bishop of Chi., 440 U.S. 490, 

502 & n.10 (1979); id. at 507–08 

(appendix). Indeed, one of the purposes 

of Congress’s expansion of the Title VII 

religious exemption to cover all of an 

employer’s activities, rather than simply 

its religious activities, was to avoid 

difficult line-drawing between religious 

and secular activities and the 

interference with religious organizations 

that could result. See Amos, 483 U.S. at 

336. In OFCCP’s view, World Vision 

generally, and Judge O’Scannlain’s 

concurrence in particular, has done the 

best job of formulating a test that meets 

the competing and delicately balanced 

goals of giving the exemption only its 

proper reach while employing useable 

and constitutionally proper inquiries. 

With that in mind, OFCCP clarifies 

here its general approach to applying 

the exemption, addresses the particular 

evidence needed for each factor, and 

adds to the regulatory text examples 

with accompanying explanation to 

further illustrate its approach. First, 

OFCCP acknowledges the need to clarify 

and revise its statement that the factors 

are ‘‘stand-alone components and not 

factors guiding an ultimate inquiry’’ in 

order to make clear the agency’s intent. 

84 FR at 41683. OFCCP agrees with 


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commenters that the aim of any test in 

this context is to determine whether the 

organization qualifies as a religious 

organization, and that any components 

are intended to guide or define that 

ultimate inquiry. The NPRM’s statement 

was intended to mean that OFCCP 

would apply the proposed three factors 

as the exclusive elements for 

ascertaining whether an organization 

qualifies for the religious exemption, 

rather than as mere considerations to be 

weighed along with other facts and 

circumstances. 

OFCCP affirms that approach here as 

the predominant path by which 

organizations are anticipated to qualify 

for the exemption. This approach is 

consistent with World Vision. The per 

curiam opinion and both concurrences 

provided slightly different factors, but 

in each instance the factors were 

presented as sufficient to determine an 

organization’s entitlement to the 

exemption. See World Vision, 633 F.3d 

at 724 (per curiam) (holding ‘‘an entity 

is eligible for the . . . exemption, at 

least, if it’’ meets four factors (emphasis 

added)); id. at 734 (O’Scannlain, J., 

concurring) (holding ‘‘a nonprofit entity 

qualifies for the . . . exemption if it 

establishes that it’’ satisfies three factors 

(footnote omitted)); id. at 748 (Kleinfeld, 

J., concurring) (‘‘To determine whether 

an entity is a ‘religious corporation, 

association, or society,’ determine 

whether it [satisfies the four factors].’’). 

Second, the World Vision-derived test 

promulgated here is not a subjective 

one. OFCCP shares commenters’ 

concern about contractors attempting to 

claim the exemption with little evidence 

other than their own testimony that 

theirs is a religious organization. 

(Though OFCCP is also skeptical that 

many contractors would attempt to do 

so. As noted above, bad-faith claims to 

the Title VII exemption have been rare.) 

The World Vision factors have been 

selected because they provide objective 

criteria for determining an 

organization’s religious status without 

the need for intrusive religious 

inquiries. See id. at 733 (O’Scannlain, J., 

concurring) (holding where religious 

activities or purposes are ‘‘hotly 

contested, . . . we should stay our hand 

and rely on considerations that do not 

require us to engage in constitutionally 

precarious inquiries’’). The World 

Vision factors are similar to a test used 

in the National Labor Relations Act 

context, which similarly ‘‘avoids . . . 

constitutional infirmities’’ while 

providing ‘‘some assurance that the 

institutions availing themselves of the 

Catholic Bishop exemption are bona 

fide religious institutions.’’ Univ. of 

Great Falls v. NLRB, 278 F.3d 1335, 

1344 (D.C. Cir. 2002); see also Duquesne 

Univ. of the Holy Spirit v. NLRB, 947 

F.3d 824, 831 (D.C. Cir. 2020). 

It is true that in applying the World 

Vision factors, OFCCP will not 

substitute its own judgment for a 

contractor’s view—found to be sincere— 

that a particular activity, purpose, or 

belief has religious meaning. For 

instance, OFCCP would not contradict a 

drug-rehabilitation center’s view, found 

to be sincere, that its work is a religious 

healing ministry by stating that its work 

is merely secular healthcare delivery. 

See Amos, 483 U.S. at 344 (Brennan, J., 

concurring) (finding religious 

organizations ‘‘often regard the 

provision of [community] services as a 

means of fulfilling religious duty’’); cf. 

World Vision, 633 F.3d at 745 

(Kleinfeld, J., concurring) (‘‘Religious 

missionaries and Peace Corps 

volunteers both perform humanitarian 

work, but only the latter is secular.’’). 

Any other course would risk severe 

constitutional difficulties. ‘‘The 

prospect of church and state litigating in 

court about what does or does not have 

religious meaning touches the very core 

of the constitutional guarantee against 

religious establishment . . . .’’ New 

York v. Cathedral Acad., 434 U.S. 125, 

133 (1977). But a contractor must prove 

its sincerity, which is a question of fact 

to be proved or disproved in the same 

manner as any other question of fact. 

And questions about religious 

characterization apply to only some 

aspects of the test. For instance, whether 

an organization operates on a nonprofit 

basis is a factual determination to which 

religious characterizations have little if 

any relevance. Similarly, as clarified in 

this final rule, an organization’s holding 

itself out as religious requires an 

objective evidentiary showing. Finally, 

OFCCP does not defer to any 

contractor’s assessment that it is entitled 

to the exemption itself. Whether an 

organization is a religious corporation, 

association, educational institution, or 

society under E.O. 11246 is a legal 

determination based on whether the 

organization satisfies the relevant 

factors. 

OFCCP next addresses specific issues 

related to each factor, including the 

evidence necessary to satisfy each 

factor. 

c. The First Factor: The Organization’s 

Religious Purpose 

As stated in the NPRM, to qualify for 

the religious exemption, a 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. Cf. Universidad Cent. de 

Bayamon v. NLRB, 793 F.2d 383, 401 

(1st Cir. 1985) (finding no NLRB 

jurisdiction when, among other things, 

an educational institution’s mission had 

‘‘admittedly religious functions but 

whose predominant higher education 

mission is to provide . . . students with 

a secular education’’). 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. See World 

Vision, 633 F.3d at 736 (O’Scannlain, J., 

concurring); id. at 745 (Kleinfeld, J., 

concurring) (noting that some religious 

entities have ‘‘no corporate apparatus’’). 

And finally, ‘‘the decision whether an 

organization is ‘religious’ for purposes 

of the exemption cannot be based on its 

conformity to some preconceived notion 

of what a religious organization should 

do, but must be measured with 

reference to the particular religion 

identified by the organization.’’ Id. at 

735–36 (O’Scannlain, J., concurring) 

(quoting LeBoon, 503 F.3d at 226–27). 

Some commenters objected that this 

factor, as described in the NPRM and 

summarized above, was too relaxed or 

that OFCCP was proposing to accept 

insufficient evidence. Many of these 

commenters stated that the proposal 

was inconsistent with Judge 

O’Scannlain’s requirement of 

demonstrating religious purpose 

through ‘‘Articles of Incorporation or 

similar foundational documents.’’ Id. at 

734. For example, a labor union asserted 

that OFCCP’s implementation of this 

factor would be ‘‘more lax than Judge 

O’Scannlain’s concurrence.’’ A 

contractor association stated that the 

test was vague and overly simple. An 

individual commenter requested more 

guidance as to what types of evidence 

OFCCP would accept to prove a 

contractor’s organization for a religious 

purpose. An organization that advocates 

separation of church and state 

commented that an organization that 

fails to document a religious purpose in 

any of its foundational documents was 

likely not organized for a religious 

purpose. 

OFCCP appreciates these comments 

and is revising its approach in response. 

OFCCP agrees that additional clarity is 

needed here and that this factor should 

require documentary evidence of an 

organization’s religious purpose in its 

foundational documents. Judge 

O’Scannlain’s concurrence examined 

World Vision’s Articles of 

Incorporation, bylaws, core values, and 

mission statement. See id. at 736. An 

organization may have other 

foundational documents, such as a 

statement of faith, company code of 

conduct, business policies, or other 


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10As noted in the proposed rule, see 84 FR at 

41685, sincerity is often not at issue. 

governance documents demonstrating a 

religious purpose. No one particular 

document is necessary. For instance, 

some federal contractors may be 

unincorporated proprietorships or 

partnerships and thus not have formal 

corporate-formation documents. But the 

organization must be able to show a 

religious purpose in documents that are 

central to the organization’s identity and 

purpose. OFCCP believes this 

requirement for documentary evidence 

will reduce uncertainty, provide 

objective means for the agency to 

confirm an organization’s satisfaction of 

this factor of the test, and help 

contractors better understand the kind 

of showing they will need to make to 

satisfy this factor. 

OFCCP emphasizes that it will not 

challenge a sincere claim characterizing 

a document’s statements as religious in 

the contractor’s view. See id. at 735–36. 

But OFCCP will rarely be able to find a 

claim of religious purpose to be sincere 

where the documents themselves are no 

different from standard corporate 

documents or where an organization 

adds a religious purpose to its 

documents after it becomes aware of 

potential discrimination liability or 

government scrutiny, including through 

an OFCCP compliance review. Sincerity 

is a factual determination, so each case 

where sincerity is at issue will turn on 

its own particular circumstances.10

d. The Second Factor: Engages in 

Activity Consistent With, and in 

Furtherance of, Its Religious Purpose 

Second, the contractor must engage in 

activity consistent with, and in 

furtherance of, its religious purpose. 

Here too, ‘‘religious purpose’’ means 

religious as ‘‘measured with reference to 

the particular religion identified by the 

contractor.’’ Id. This factor is adopted 

from Judge O’Scannlain’s World Vision 

concurrence rather than the per curiam 

opinion. Cf. id. at 734. The regulatory 

text of the final rule has been slightly 

revised from the proposed language to 

more closely reflect Judge O’Scannlain’s 

formulation. This factor is now the 

second factor in the test rather than the 

third. No material change is intended. 

This factor also now states that the 

organization must exercise religion 

consistent with, and in furtherance of, 

‘‘its’’ religious purpose, rather than ‘‘a’’ 

religious purpose. OFCCP does not view 

this change as significant, since a 

religious organization is quite unlikely 

to further a religious purpose other than 

its own. 

As explained in the NPRM, OFCCP 

proposed not to follow the World Vision 

per curiam opinion’s formulation of this 

factor for both practical and legal 

reasons. The per curiam opinion would 

require a contractor to be ‘‘engaged 

primarily in carrying out [its] religious 

purpose.’’ Id. at 724 (per curiam) 

(emphasis added). But such a 

formulation would invite OFCCP to 

balance things that cannot be balanced 

consistently and leave contractors 

without the kind of clarity that ought to 

prevail in contractual relations. Further, 

the Supreme Court and lower courts 

have cautioned against drawing lines 

between religious activity or belief that 

is ‘‘central’’ or ‘‘primary’’ and religious 

activity or belief that is not. See 84 FR 

at 41682, 41683. 

Also as explained in the NPRM, 

OFCCP proposed to use the phrase 

‘‘engages in exercise of religion’’ rather 

than Judge O’Scannlain’s phrase, 

‘‘engages in activity.’’ See World Vision, 

633 F.3d at 734 (O’Scannlain, J., 

concurring) (‘‘engaged in activity 

consistent with, and in furtherance of, 

those religious purposes’’). No material 

change was intended by this 

adjustment; it was meant to capture in 

succinct regulatory text Judge 

O’Scannlain’s lengthy discussion that 

the kind of activity contemplated under 

this prong is religious exercise. See 84 

FR at 41683; see also World Vision, 633 

F.3d at 737–38. 

OFCCP received many comments on 

this aspect of the NPRM. A religious 

organization asked OFCCP to clarify that 

‘‘consistent’’ as used in the third factor 

does not mean that OFCCP will be 

assessing ‘‘the coherence or consistency 

of the contractor’s religious beliefs, see 

Thomas v. Review Bd., 450 U.S. 707 

(1981) (forbidding such an inquiry), but 

only [making] a determination that the 

contractor is engaged in activity 

reflecting a religious, as opposed to a 

secular, purpose.’’ OFCCP confirms that 

its intent in including this element is to 

determine whether the contractor’s 

exercise of religion is consistent with its 

religious purpose, not to test the 

internal consistency of a contractor’s 

religious beliefs. To make this point as 

clear as possible, OFCCP has added 

regulatory text explaining that 

‘‘[w]hether an organization’s 

engagement in activity is consistent 

with, and in furtherance of, its religious 

purpose is determined by reference to 

the organization’s own sincere 

understanding of its religious tenets.’’ 

As with other factors, some 

commenters asserted that this factor, as 

described in the NPRM and summarized 

above, was too relaxed or that OFCCP 

was proposing to accept insufficient 

evidence. Many of these commenters 

stated that the incorporation of 

‘‘exercise of religion’’ as defined in 

RFRA into this factor further loosened 

the standard. For example, a group of 

state attorneys general asserted that 

incorporation of the RFRA standard 

revealed confusion on the part of 

OFCCP as to the fundamental difference 

between the religious organization 

exemption and RFRA. The state 

attorneys general stated that the 

religious organization exemption is 

triggered only when an organization’s 

exercise of religion is so significant that 

the organization’s overall identity 

becomes religious and criticized the 

proposed rule for focusing instead on 

whether an organization engages in 

exercises of religion generally. A civil 

liberties organization characterized the 

preamble as mistakenly stating that 

inquiry into the religious nature of 

entities’ actions is impermissible. A 

labor union commented that this aspect 

of OFCCP’s proposal could lead 

businesses to feign religiosity solely for 

the purpose of cloaking discriminatory 

activity. 

Some commenters also criticized the 

exclusion from OFCCP’s proposed test 

of the requirement that a contractor be 

‘‘primarily religious,’’ or ‘‘engaged 

primarily in carrying out that religious 

purpose.’’ Some of these comments 

stated that OFCCP did not persuasively 

explain why it was excluding this 

element from the definition. A 

contractor association commented that 

Title VII’s religious organization 

exception has traditionally been limited 

to institutions whose ‘‘purpose and 

character are primarily religious,’’ and 

that OFCCP has no basis to depart from 

this principle. An anti-bigotry religious 

organization commented that OFCCP 

should consider all relevant 

circumstances in determining whether a 

contractor is indeed religious, as OFCCP 

proposed to do for Sincere (that is, 

taking into account all relevant facts). 

The organization commented that the 

Supreme Court in Hosanna-Tabor 

reviewed the employee’s religious and 

secular functions, undermining 

OFCCP’s claim that it cannot engage in 

a similar type of balancing. 

OFCCP disagrees with the idea that 

this factor, either as proposed or as 

adopted in the final rule, confuses the 

religious exemption with RFRA. An 

organization that exercises religion 

under RFRA may not satisfy this factor 

of the test, yet even if it did, that alone 

would not satisfy the other factors of the 

test necessary to claim the E.O. 11246 

religious exemption. Further, as will be 

discussed shortly, OFCCP has revised 

this prong to adhere to Judge 


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11Because of this change, the phrase ‘‘exercises 

religion’’ no longer appears in this prong. Thus, as 

explained later in this preamble, the definition for 

Exercise of religion is no longer needed and has 

been removed from the final rule. 

O’Scannlain’s formulation, which 

should alleviate any confusion 

regarding RFRA.11

OFCCP agrees with commenters that 

activity consistent with the contractor’s 

religious purpose must be a substantial 

aspect of the contractor’s operations. 

Insofar as the NPRM could be read to 

suggest that a one-time or de minimis 

amount of religious activity would be 

sufficient, OFCCP clarifies that 

understanding here. The need for a 

material amount of religious activity 

flows from the text used in the 

regulation, that the entity ‘‘engage in 

religious activity.’’ To engage is ‘‘[t]o 

employ or involve oneself; to take part 

in; to embark on,’’ Black’s Law 

Dictionary (11th ed. 2019), or to 

‘‘involve oneself or become occupied; 

participate,’’ American Heritage 

Dictionary (5th ed. 2020). It suggests 

more than occasional or half-hearted 

efforts. The case law further illustrates 

that there must be a significant level of 

religious activity. For instance, World 

Vision easily satisfied that requirement 

since activity consistent with its 

religious purpose was ‘‘essentially all 

World Vision appears to do.’’ World 

Vision, 633 F.3d at 737–38 

(O’Scannlain, J., concurring). The 

examples added to the final regulatory 

text also help illustrate the religious 

activity needed to qualify for the 

exemption. 

OFCCP disagrees with commenters to 

the extent they argue that an 

organization must engage solely in 

religious activity (and explains below 

that such an inquiry would be difficult 

and constitutionally imprudent). When 

an organization engages in other, 

secular, activities, that alone does not 

diminish its ability to satisfy this factor 

of the test. See LeBoon, 503 F.3d at 229; 

cf. Univ. of Great Falls, 278 F.3d at 

1342. This is made clear by the text of 

the religious exemption. The Title VII 

exemption was expanded in 1972 (and 

that expanded language is used in E.O. 

11246) to cover religious organizations’ 

employees engaged in any of the 

organization’s activities, rather than 

only employees engaged in the 

organization’s religious activities. Thus 

the exemption contemplates that 

religious organizations will engage in 

activities that are not religious, and it 

makes clear that religious organizations 

do not forfeit the exemption simply 

because they do. 

OFCCP also disagrees with 

commenters who argued that the 

organization’s religious activity under 

this factor must be shown to ‘‘constitute 

a comprehensive religious identity.’’ 

That is simply a rephrasing of the 

ultimate inquiry underlying the World 

Vision test. This factor has a crucial role 

to play in that inquiry, but it should not 

be mistaken for the whole of it. One of 

the most useful aspects of the World 

Vision test is that it provides a step-bystep framework for assessing an 

organization’s religious nature, 

including this factor, rather than leaving 

the inquiry an open-ended assessment 

in which a religious organization is 

simply known when it is seen. Cf. 

Jacobellis v. State of Ohio, 378 U.S. 184, 

197 (1964) (Stewart, J., concurring). 

Regarding comments that applying 

Judge O’Scannlain’s concurrence rather 

than a ‘‘primarily engaged’’ factor is an 

unjustified departure from Title VII 

jurisprudence or reflects an overly 

prophylactic view of religious inquiry, 

OFCCP respectfully disagrees. OFCCP’s 

position requires being mindful of the 

distinction between the test’s 

underlying inquiry and the factors used 

to ascertain the answer to that inquiry. 

The test’s underlying inquiry is whether 

an organization’s ‘‘purpose and 

character are primarily religious.’’ See, 

e.g., World Vision, 633 F.3d at 726 

(O’Scannlain, J., concurring). But World 

Vision operationalized that inquiry into 

four factors. Thus any constitutional or 

practical problems regarding the 

inquiry’s ‘‘primarily religious’’ 

formulation are academic because 

OFCCP will be answering the inquiry by 

means of applying the factors. That is 

one of the reasons why OFCCP prefers 

the World Vision test to other 

formulations. 

When it comes to those four factors, 

however, the World Vision per curiam 

opinion carried forward a ‘‘primarily’’ 

inquiry in two of the factors: The 

organization must be ‘‘engaged 

primarily in carrying out [its] religious 

purpose’’ and must ‘‘not engage 

primarily or substantially in the 

exchange of goods or services for money 

beyond nominal amounts.’’ Id. at 724 

(per curiam). Judge O’Scannlain’s wellreasoned concurrence used an 

alternative formulation that avoids the 

‘‘primarily’’ questions. OFCCP believes 

the better choice is to adopt the 

concurrence. The main problem with 

determining whether an organization is 

‘‘primarily’’ engaged in its religious 

purpose—as opposed to substantially or 

materially or genuinely engaged in its 

religious purpose—is not that it requires 

a determination that the organization is 

engaged in significant religious activity, 

something that can be ascertained easily 

enough, but rather that it requires 

comparison between the amount of 

religious and secular activity at an 

organization. In essence, the 

organization must engage in a greater 

quantum of religious activity than 

secular activity, though without 

specifying whether the ratio must be 

51:49, 70:30, or 99:1. However, any 

attempt to so compare religious and 

secular activity leads to additional 

problems: Some activities do not clearly 

fall on one side of the line or the other, 

and a court’s or an agency’s attempts to 

determine on which side of the line 

those activities fall can lead to 

constitutionally intrusive inquiries. See, 

e.g., Cathedral Acad., 434 U.S. at 133 

(observing the ‘‘excessive state 

involvement in religious affairs’’ that 

may result from litigation over ‘‘what 

does or does not have religious 

meaning’’). Moreover, even when all 

activities are properly categorized, it is 

unclear what weight each should have. 

See, e.g., Univ. of Great Falls, 278 F.3d 

at 1343 (observing that a test that 

requires ascertaining an entity’s 

‘‘substantial religious character’’ or lack 

thereof ‘‘boils down to ‘is it sufficiently 

religious?’’’). OFCCP avoids these 

problems by adopting Judge 

O’Scannlain’s formulation of this prong. 

OFCCP agrees with commenters that 

some courts have nonetheless 

undertaken the task of comparing 

secular and religious activity when 

examining the religious exemption. See 

LeBoon, 503 F.3d 217; Kamehameha 

Sch., 990 F.2d 458; Boydston v. Mercy 

Hosp. Ardmore, Inc., No. CIV–18–444– 

G, 2020 WL 1448112 (W.D. Okla. Mar. 

25, 2020). OFCCP disagrees that it also 

must do so when Judge O’Scannlain’s 

concurrence provides a viable 

alternative. That alternative is especially 

attractive to OFCCP as an enforcement 

agency and as a regulator of government 

contractors. In both instances a factor 

that offers more clarity than another 

gives better notice to contractors, better 

guidance to field staff, and crisper lines 

to the bargain between the two parties. 

e. The Third Factor: Holding Itself Out 

as Religious 

Third, the contractor must hold itself 

out to the public as carrying out a 

religious purpose. Again here, and as 

explained in the NPRM, ‘‘religious 

purpose’’ ‘‘must be measured with 

reference to the particular religion 

identified by the contractor.’’ World 

Vision, 633 F.3d at 736 (O’Scannlain, J., 

concurring). The NPRM proposed that a 

contractor could satisfy this requirement 

in a variety of ways, including by 

evidence of a religious purpose on its 

website, publications, advertisements, 

letterhead, or other public-facing 


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12See Brian J. Grim and Melissa E. Grim, ‘‘The 

Socio-economic Contribution of Religion to 

American Society: An Empirical Analysis,’’ 

Interdisciplinary Journal of Research on Religion, 

vol. 12 (2016), article 3, pp. 10, 24, http://

www.religjournal.com/pdf/ijrr12003.pdf. 

13See id. at 7. 

14See General Service Administration, System for 

Award Management, Advanced Search—Entity 

(listing 410,021 active for-profit entities and 99,781 

nonprofit and/or other-not-for-profit entities), 

sam.gov/SAM/pages/public/searchRecords/ 

advancedEMRSearch.jsf (last accessed Oct. 2, 2020). 

materials, or by affirming a religious 

purpose in response to inquiries from a 

member of the public or a government 

entity. See 84 FR at 41683. 

Again, some commenters stated that 

this factor, as described in the NRPM 

and summarized above, was too relaxed 

or that OFCCP was proposing to accept 

insufficient evidence. Many of these 

commenters criticized OFCCP’s 

proposal for allowing a contractor to 

meet this requirement by declaring its 

religious purpose in response to an 

inquiry from a government entity such 

as OFCCP itself. Commenters asserted 

that, as a result, almost any employer 

could designate itself a religious 

organization. Commenters also stated 

that taxpayers, employees, and 

applicants therefore would not 

necessarily have notice that the 

religious exemption could be applied. 

Commenters stated that this factor 

would thus not serve as the ‘‘market 

check’’ that Judge O’Scannlain 

envisioned. World Vision, 633 F.3d at 

735 (O’Scannlain, J., concurring) 

(quoting Univ. of Great Falls, 278 F.3d 

at 1344). A group of state attorneys 

general, for example, criticized OFCCP’s 

proposal for purportedly relaxing Judge 

O’Scannlain’s ‘‘ ‘market check’ that 

would come from requiring an 

organization to hold itself out to the 

public as religious,’’ which ‘‘could come 

at a cost in terms of broader public 

support.’’ One contractor association 

remarked that, under the proposed rule, 

a federal contractor could satisfy this 

factor simply by responding to an 

OFCCP inquiry, whereas World Vision 

had always identified itself as a 

Christian organization, requiring its 

descriptor statement on all its 

communications. Another contractor 

association commented: ‘‘Making such a 

showing [for example, in response to an 

inquiry] is very easy and may or may 

not actually align with actual corporate 

purpose.’’ 

OFCCP appreciates these comments 

and, here too, is clarifying its approach 

in response. OFCCP agrees that a 

contractor could not satisfy this factor 

simply by affirming a religious purpose 

in response to one public or government 

inquiry, if that was all the contractor 

could put forward as evidence. More 

would be needed to show that the 

public was on notice of the 

organization’s religious nature. 

How much more is a factual question 

that cannot be defined with complete 

specificity, but the case law provides 

some guideposts. World Vision easily 

satisfied this requirement: Its logo was 

a stylized cross; religious artwork and 

texts were displayed throughout its 

campus; its communications guidelines 

required references to its Christian 

identity in all external communications; 

and its employment guidelines 

expressly required subscription to 

particular Christian beliefs. See id. at 

738–40. Very recently, a district court 

held that a Catholic hospital and its 

affiliates satisfied the requirement when 

they held ‘‘themselves out to the public 

as sectarian through their display of 

religious symbols in their facilities and 

through their sectarian mission 

statement and values statements 

displayed on [their] public website.’’ 

Boydston, 2020 WL 1448112, at *5. In 

the analogous NLRA context, a 

university satisfied the test when, ‘‘in its 

course catalogue, mission statement, 

student bulletin, and other public 

documents, it unquestionably holds 

itself out to students, faculty, and the 

broader community as providing an 

education that, although primarily 

secular, is presented in an overtly 

religious, Catholic environment.’’ Univ. 

of Great Falls, 278 F.3d at 1345. The 

university also filled its campus, 

classrooms, and offices ‘‘with Catholic 

icons, not merely as art, but it claims as 

an expression of faith.’’ Id. 

In short, a contractor satisfies this 

requirement when the contractor makes 

it reasonably clear to the public that it 

has a religious purpose. As noted in the 

NPRM, evidence of a religious purpose 

can come from the contractor’s website, 

publications, advertisements, letterhead, 

or other public-facing materials, and in 

statements to members of the public. 

Evidence can also include religiously 

inspired logos, mottos, or the like; and 

religious art, texts, music, or other 

displays of religion in the workplace. 

Statements to the government in the 

ordinary course of business, such as 

corporate documents or tax filings, can 

also be probative. Such statements 

should be distinguished from statements 

to the government made in the course of 

an investigation or litigation in which 

the contractor’s religious purpose is at 

issue. No one piece of evidence is 

required or, most likely, sufficient. But 

together the evidence must show that 

the contractor is presenting itself to the 

outside world as religious. 

f. The Fourth Factor: Operating on a 

Not-for-Profit Basis 

OFCCP proposed not to adopt the 

fourth factor set out in World Vision: 

That the entity seeking exemption ‘‘not 

engage primarily or substantially in the 

exchange of goods or services for money 

beyond nominal amounts.’’ 633 F.3d at 

724 (per curiam). The NPRM proposed 

this course for several reasons: Many 

religious entities may operate discount 

retail stores or otherwise engage in the 

marketplace; 12 religiously oriented 

hospitals, senior-living facilities, and 

hospices may engage in substantial and 

frequent financial exchanges; 13 the 

religious exemption in E.O. 11246 

pertains to government contracting, an 

economic activity in which most 

participants are for-profit entities; 14

other courts have not considered 

dispositive an organization’s for-profit 

or nonprofit status, or the volume or 

amount of its financial transactions; 

Amos left open the question of whether 

for-profit organizations could qualify for 

the exemption; and the Supreme Court’s 

more recent decision in Hobby Lobby, 

which held that for-profit organizations 

can exercise religion, counseled against 

an absolute prohibition on allowing forprofit organizations to qualify for the 

exemption. 

OFCCP received a wide variety of 

comments on this aspect of the NPRM. 

Some commenters agreed with OFCCP’s 

reasons for declining to require that a 

contractor ‘‘not engage primarily or 

substantially in the exchange of goods 

or services for money beyond nominal 

amounts.’’ For example, a religious 

liberties organization commented that 

federal contractors typically engage in 

substantial exchanges of goods and 

services, and therefore religious 

organizations would be categorically 

denied the section 204(c) exemption if 

they became federal contractors. Other 

commenters opposed the exclusion of 

the requirement that a contractor ‘‘not 

engage primarily or substantially in the 

exchange of goods or services for money 

beyond nominal amounts.’’ A group of 

U.S. Senators commented that the 

existence of a financial motive 

constitutes strong evidence that the 

exercise of religion is not the objective 

of the entity. Some of these commenters 

stated that OFCCP did not persuasively 

explain why it was excluding this 

element from the definition. 

OFCCP declines to restrict the 

exemption to those religious entities 

that charge little or nothing for their 

services. Contra World Vision, 633 F.3d 

at 724 (per curiam); id. at 747 (Kleinfeld, 

J., concurring). First, E.O. 11246 governs 

federal contractors, not grantees. 

Contractors by definition charge for 


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15 In the next few paragraphs, this preamble 

explains further why and how OFCCP is limiting 

the exemption to nonprofit organizations in most 

circumstances. 

their goods and services, even if they are 

nonprofits. E.O. 11246’s religious 

exemption would be a virtual nullity 

were it restricted to contractors that do 

not charge. Second, OFCCP agrees with 

Judge O’Scannlain that nonprofit status 

is a sufficiently reliable proxy for 

religious identity,15 without the need to 

restrict this factor further to only those 

organizations that do not charge. Judge 

O’Scannlain explained that nonprofit 

status, and its restrictions on monetary 

gain, is reliable evidence that the 

organization has religious aims rather 

than purely pecuniary ones, see id. at 

734–35 (O’Scannlain, J., concurring), 

and OFCCP agrees. Plus, the narrower 

formulation would exclude many bona 

fide religious organizations, like certain 

hospitals and care facilities, that engage 

in substantial and frequent market 

transactions, including by charging 

sums to beneficiaries of their goods and 

services. And while religious 

educational institutions have their own 

particular exemption, it would seem 

odd to think that their charging for 

books, tuitions, and dormitories would 

call into question their religious status. 

Third, one of the reasons OFCCP is 

promulgating this rule is to encourage 

broader participation in government 

contracting and subcontracting. 

Restrictions that would unduly restrict 

the exemption’s availability could affect 

the size of the pool, to the detriment of 

the government’s interests in a 

competitive and diverse field of 

potential contractors. 

OFCCP also received many comments 

on its proposal to remove the 

requirement that organizations be 

nonprofit to qualify for the exemption. 

As mentioned above, OFCCP has 

substantially revised this aspect of the 

rule in response to commenters’ 

concerns. Some commenters agreed 

with the proposal that it was not 

necessary for a contractor to ‘‘be 

nonprofit.’’ For example, a religious 

civil rights organization commended the 

proposal for affirming that the owners of 

for-profit entities do not have to forfeit 

their religious convictions. Those 

commenters agreed with OFCCP’s 

explanation that Hobby Lobby counsels 

against a stark distinction between 

nonprofit and for-profit corporations. 

For example, a religious legal 

organization commented: ‘‘[A]s the 

Supreme Court noted in Hobby Lobby, 

a for-profit corporation substantially 

engaged in an exchange of goods and 

services can exercise religion.’’ 

Other commenters opposed the 

proposal not to make nonprofit status a 

determinative factor. For example, an 

anti-bigotry religious organization 

emphasized that Judge O’Scannlain’s 

concurrence in World Vision focused on 

whether the employer’s purpose is nonpecuniary, while Judge Kleinfeld’s 

analysis focused on whether the 

employer provided services at no cost or 

for a nominal fee. The organization 

criticized the proposed rule for rejecting 

both factors. Commenters asserted that 

OFCCP’s proposal not to make nonprofit 

status a determinative factor would 

unacceptably broaden the exemption. A 

religious organization asserted that the 

proposed rule would allow for-profit 

corporations to exploit faith in order to 

justify discrimination, and that the 

spirit of religious institutions would be 

diminished if houses of worship were 

placed in the same category as for-profit 

institutions. 

Some commenters stated that the 

proposal would allow discrimination by 

contractors that should not be entitled 

to the religious exemption. A labor 

organization commented that even forprofit companies, whose primary 

purpose is, by definition, to make a 

profit, could protect themselves from 

discrimination claims by claiming to 

have a religious purpose. 

Some commenters stated that the 

proposed removal of the nonprofit 

requirement was inconsistent with Title 

VII case law interpreting the same term, 

including Judge O’Scannlain’s own test. 

Many of these commenters stated that 

OFCCP had not cited any Title VII cases 

in which a court had found a for-profit 

entity to qualify for the religious 

exemption. For example, a contractor 

association commented that Judge 

O’Scannlain considered non-profit 

status to be an ‘‘especially significant’’ 

consideration, which was consistent 

with the reasoning in numerous Title 

VII cases. Some commenters stated that 

the proposed removal of the nonprofit 

requirement was inconsistent with 

guidance from the EEOC or was a 

reversal of OFCCP’s previous position. 

Many of these commenters stated that 

OFCCP gave inadequate reasons for the 

deviation. For example, a group of state 

attorneys general commented that the 

proposed reversal was not justified by 

the executive branch’s contracting 

authority, which ‘‘must be exercised 

within the boundaries of Title VII’s 

prohibitions.’’ A contractor association 

commented that omitting a legal 

requirement because it could be difficult 

to apply does not align with OFCCP’s 

stated commitment to follow the rule of 

law and to apply Title VII principles. 

Some commenters specifically 

objected to OFCCP’s reliance on Hobby 

Lobby as justifying or requiring the 

proposed removal of the nonprofit 

status factor. Most of these commenters 

stated that Hobby Lobby was 

inapplicable because it centered not on 

the Title VII religious exemption but on 

RFRA, specifically on that statute’s 

definition of ‘‘person.’’ For example, a 

civil liberties organization commented 

that the Supreme Court in Hobby Lobby 

focused its analysis on the definition of 

the word ‘‘person’’ in RFRA and offered 

no insight into the definition or scope 

of the phrase ‘‘religious corporation’’ in 

the religious exemption context. A 

gender equality advocacy organization 

commented that RFRA goes far beyond 

what is constitutionally required by 

subjecting any laws burdening religious 

exercise to strict scrutiny and, thus, the 

question of RFRA’s application should 

not dictate a company’s eligibility for a 

Title VII religious exemption. 

Some commenters also stated that 

Hobby Lobby has not been applied in 

subsequent Title VII religious 

exemption cases. These commenters 

typically cited Garcia v. Salvation 

Army, 918 F.3d 997 (9th Cir. 2019). In 

that case, the Ninth Circuit found that 

the Salvation Army satisfied the 

requirement that it ‘‘not engage 

primarily or substantially in the 

exchange of goods or services for money 

beyond nominal amounts’’ both because 

it is a nonprofit (Judge O’Scannlain’s 

approach) and because it gives away or 

charges only nominal fees for its 

services (Judge Kleinfeld’s approach). 

Id. at 1004. 

In addition to distinguishing Hobby 

Lobby on the ground that it addressed 

RFRA and not the Title VII religious 

exemption, commenters also stated that 

key limitations present in Hobby Lobby 

were not reflected in OFCCP’s proposal. 

In particular, they stated, Hobby Lobby 

held that only closely held for-profit 

corporations could invoke RFRA, but 

OFCCP’s proposal included no such 

limitation, and the Court in Hobby 

Lobby considered harms an exemption 

would impose on third parties, but 

OFCCP did not consider third-party 

harms the commenters believed the 

proposal would cause. Commenters also 

stated that Hobby Lobby did not address 

government contractors. For example, a 

women’s rights advocacy organization 

commented that, while Hobby Lobby 

dealt with a general requirement on all 

non-grandfathered insurance plans, the 

proposed rule deals with businesses that 

willingly enter contracts with the 

federal government. According to the 

organization, ‘‘[a]n entity does not have 


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16These varying statements span the range from 

‘‘not purely secular’’ to ‘‘purely nonpecuniary.’’ 

OFCCP’s regulatory text attempts to strike a balance 

down the middle, using the phrase ‘‘possesses a 

substantial religious purpose.’’ 

a right to a contract that it is unwilling 

to perform.’’ 

In consideration of these comments, 

OFCCP is revising the definition of 

Religious corporation, association, 

educational institution, or society in the 

final rule. OFCCP recognizes that, as 

Judge O’Scannlain observed, nonprofit 

status is ‘‘strong evidence’’ that an 

organization has a nonpecuniary 

purpose. World Vision, 633 F.3d at 734– 

35 (O’Scannlain, J., concurring); see also 

Amos, 483 U.S. at 344 (1987) (Brennan, 

J., concurring). Nonprofit status also 

allows a determination of religious 

purpose to be made objectively and 

without engaging in a more searching 

inquiry. With that said, OFCCP 

recognizes that, in certain rare 

circumstances, an organization might be 

for-profit yet still be fairly considered a 

religious rather than secular 

organization. 

Thus the final rule adds a fourth 

requirement: That the contractor either 

‘‘(A) operates on a not-for-profit basis; or 

(B) presents other strong evidence that 

it possesses a substantial religious 

purpose.’’ Paragraph (A) has been 

written in a manner that covers federal 

contractors that do not have formal taxexempt status under 26 U.S.C. 501(c)(3) 

but operate in substantial compliance 

with 501(c)(3)’s requirements. See 

World Vision, 633 F.3d at 745 

(Kleinfeld, J., concurring) (noting the 

need for a small adjustment to the test 

to cover small groups that do not 

formally incorporate). Paragraph (A) 

meets the goals of certainty and clarity 

in contracting for what OFCCP believes 

will be the vast majority of contractors 

interested in the exemption. Paragraph 

(B) is a helpful contingency for 

situations where a contractor may not 

satisfy this prong of the test but in all 

fairness should be considered a 

qualifying religious organization. This 

alternative test is consistent with World 

Vision and the more recent Ninth 

Circuit case highlighted by commenters, 

Salvation Army, 918 F.3d 997. World 

Vision’s brief per curiam opinion stated 

that an organization is eligible for the 

exemption ‘‘at least’’ when it meets the 

four factors. 633 F.3d at 724 (per 

curiam) (emphasis added). Judge 

O’Scannlain’s opinion stated that other 

factors may be relevant in other cases. 

See id. at 729–30 (O’Scannlain, J., 

concurring). In Salvation Army, the 

court applied an ‘‘all significant 

religious and secular characteristics’’ 

standard as well as noted that the 

Salvation Army satisfied the World 

Vision test. See Salvation Army, 918 

F.3d at 1003–04. 

In his World Vision concurrence, 

Judge O’Scannlain described nonprofit 

status as ‘‘especially significant’’ 

because of its evidentiary value. He 

wrote that nonprofit status ‘‘bolsters a 

claim that [an organization’s] purpose is 

nonpecuniary,’’ ‘‘provides strong 

evidence that its purpose is purely 

nonpecuniary,’’ ‘‘makes colorable a 

claim that it is not purely secular in 

orientation,’’ and ‘‘bolster[s] a 

‘contention that an entity is not 

operated simply in order to generate 

revenues . . . , but that the activities 

themselves are infused with a religious 

purpose.’ ’’ World Vision, 633 F.3d at 

734–35 (O’Scannlain, J., concurring) 

(quoting Amos, 483 U.S. at 344 

(Brennan, J., concurring)).16 OFCCP 

agrees with these observations, which is 

why it has adopted nonprofit status as 

a sufficient means for satisfying this 

factor of the test. 

There may be rare situations, 

however, where an organization is 

legally constituted as a for-profit 

enterprise yet infused with religious 

purpose. In those situations, the 

organization would need to come 

forward with strong evidence that its 

goals are religious rather than 

pecuniary—evidence comparable in 

probative weight to nonprofit status. 

OFCCP has added examples within the 

regulatory definition of Religious 

corporation, association, educational 

institution, or society to illustrate some 

of these rare instances, including a 

contractor that provides chaplaincy 

services to the military and a kosher 

caterer that supplies meals for federal 

events. OFCCP doubts that an entity that 

is not closely held could ever satisfy 

this requirement, especially since such 

an entity would have multiple and 

disparate shareholders. See Hobby 

Lobby, 573 U.S. at 717 (‘‘[T]he idea that 

unrelated shareholders—including 

institutional investors with their own 

set of stakeholders—would agree to run 

a corporation under the same religious 

beliefs seems improbable.’’). OFCCP 

likewise doubts that an entity could 

qualify if it predominantly provides 

undifferentiated marketplace goods or 

services that are not associated with an 

expressly religious purpose or a 

charitable, educational, humanitarian, 

or other eleemosynary purpose. 

OFCCP has also modified the NPRM’s 

definition of Religious corporation, 

association, educational institution, or 

society to reflect these considerations. 

Unlike the proposed rule, which stated 

only that a religious organization need 

not be nonprofit, the final rule now 

requires that the organization, if forprofit, present ‘‘other strong evidence 

that it possesses a substantial religious 

purpose.’’ This formulation attempts to 

synthesize the various statements in 

World Vision and Amos as to the 

quantum of religious purpose an 

organization must have, and recognizes 

their reasoning that nonprofit status 

serves as a valuable evidentiary proxy 

for religious purpose. Thus the final rule 

requires a for-profit organization to put 

forward strong evidence to demonstrate 

that it does indeed have a substantial 

religious commitment rather than serve 

solely as a vehicle to facilitate profitmaking or other secular ends. This 

formulation recognizes that an 

organization may have more than one 

purpose, but its religious one must be 

substantial. It would not be enough, for 

instance, that an organization feature a 

scriptural quote in marketing materials 

or make a brief reference to religious 

values on its ‘‘About Us’’ web page. The 

examples in the regulatory text may be 

instructive to readers on this point. 

This new regulatory text is also 

consistent with Hobby Lobby’s 

observation that a corporation need not 

choose absolutely between financial 

objectives and other objectives: 

While it is certainly true that a central 

objective of for-profit corporations is to make 

money, modern corporate law does not 

require for-profit corporations to pursue 

profit at the expense of everything else, and 

many do not do so. . . . If for-profit 

corporations may pursue such worthy 

objectives [as supporting charitable causes, 

environmental measures, or working 

conditions beyond those required by law], 

there is no apparent reason why they may not 

further religious objectives as well. 

Hobby Lobby Stores, 573 U.S. at 711. 

OFCCP believes that the approach 

promulgated here, which has been 

modified from that in the NPRM, is 

consistent with Title VII case law. 

Again, World Vision set out a four-factor 

test that, if satisfied, is sufficient for 

organizations to qualify for the 

exemption. But as Salvation Army and 

other cases show, there are other ways 

to qualify for the exemption. See 

Salvation Army, 918 F.3d 997; EEOC v. 

Townley Eng’g & Mfg. Co., 859 F.2d 610 

(9th Cir. 1988). In these other cases, 

nonprofit or for-profit status has been 

treated as an important factor, but not as 

dispositive. That is similar to this final 

rule’s approach. 

For the same reason, OFCCP disagrees 

that its approach is an unjustified 

change in agency position. Until this 

rulemaking, OFCCP had not set forth the 

specific factors it would use to decide 

which organizations qualify for E.O. 

11246’s religious exemption; rather, in 


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17See, e.g., Thomas, 450 U.S. at 723 n.1 

(Rehnquist, J., dissenting) (citing several burdens on 

the system and other beneficiaries, including that 

‘‘[w]e could surely expect the State’s limited funds 

allotted for unemployment insurance to be quickly 

depleted’’); Wisconsin v. Yoder, 406 U.S. 205, 240 

(1972 (White, J., concurring) (outlining the state’s 

legitimate interest in educating Amish children, 

especially ones that leave their community but 

finding the evidence of harm insufficient); Yoder, 

406 U.S. at 245 (Douglas, J., dissenting) (arguing 

that the decision ‘‘imperiled’’ the ‘‘future’’ of the 

Amish children, not their parents). 

withdrawn subregulatory guidance 

OFCCP stated that it would follow 

EEOC and court interpretations of Title 

VII and apply an all-facts-andcircumstances test. To the extent that 

withdrawn statement could be 

considered the position of the agency, 

for the reasons stated in this preamble, 

OFCCP now believes such a test is too 

indeterminate and involves potential 

legal infirmities, and that a moredefined test will give better clarity to 

contractors and foster a broader pool of 

potential contractors and 

subcontractors. It is certainly true, as 

commenters asserted, that OFCCP’s 

general position is to follow Title VII 

principles when interpreting E.O. 

11246. For the reasons stated in this 

preamble OFCCP believes its approach 

is consistent with Title VII principles 

and Supreme Court case law, and better 

furthers the goals of this rulemaking. 

The minor differences between the 

EEOC’s approach to determining which 

organizations can claim the exemption 

and OFCCP’s definition of Religious 

corporation, association, educational 

institution, or society are addressed later 

in this preamble. 

OFCCP also disagrees with 

commenters who argued that Hobby 

Lobby is irrelevant to this issue. 

Certainly Hobby Lobby was not a Title 

VII case. But Hobby Lobby’s holding that 

for-profit corporations qualify as 

‘‘persons’’ who can exercise religion 

under RFRA is hard to square with a 

rule that a for-profit entity can never be 

a religious organization eligible for E.O. 

11246’s religious exemption. And much 

of its reasoning has broader 

implications. The Supreme Court 

observed that furthering the religious 

freedom of corporations, whether forprofit or nonprofit, furthers individual 

religious freedom. See Hobby Lobby, 

573 U.S. at 707. The Supreme Court 

found no reason to distinguish between 

for-profit sole proprietorships—which 

had brought Free Exercise claims before 

the Supreme Court in earlier cases—and 

for-profit closely held corporations. See 

id. at 709–10. And as just stated, the 

Supreme Court noted that every U.S. 

jurisdiction permits corporations to be 

formed ‘‘for any lawful purpose or 

business,’’ id. at 711 (internal quotation 

marks omitted), including a religious 

one, see id. at 710–11. 

OFCCP is required to give some 

consideration to that language in 

formulating its own test here. If forprofit corporations can exercise religion 

and further religious objectives as well 

as pecuniary ones, then OFCCP should 

consider carefully whether they should 

be categorically excluded from 

qualification as religious organizations 

under the religious exemption. Hobby 

Lobby does not demand a result one way 

or the other on that issue, but OFCCP 

has found the case to be an important 

data point in support of its approach 

here. 

Regarding commenters’ concerns that 

a removal of the nonprofit requirement 

would unacceptably broaden the 

exemption, OFCCP has revised the 

regulatory text as described above. 

OFCCP does not anticipate many forprofit organizations seeking to qualify 

for the exemption, and those that do 

will need to satisfy the other three 

prongs—which themselves contain 

significant evidentiary requirements— 

plus provide strong evidence of their 

religious nature. OFCCP believes this 

test will ensure that only bona fide 

religious organizations will qualify. 

Finally, regarding comments about socalled third-party harms, OFCCP 

recognizes that Cutter v. Wilkinson 

stated that government must adequately 

account for accommodations’ burdens 

on others. 544 U.S. 709, 720 (2005). 

OFCCP believes it has adequately 

accounted for any burdens on others 

that this rule may cause, and on balance 

believes that the vindication of the law’s 

religious protections, the need for 

clarity in this area of contracting, and 

the potential expansion of the 

government’s contracting pool justify 

any burdens on third parties. See infra 

section III.B.5. 

Further, under controlling Supreme 

Court precedent, the Establishment 

Clause allows accommodations that 

remove a burden of government rules 

from religious organizations, reduce the 

chilling on religious conduct, or reduce 

government entanglement. See Amos, 

483 U.S. at 334–39. Any third party 

burdens that might result from such 

accommodations are attributable to the 

organization that benefits from the 

accommodation, not to the government, 

and, as a result, do not violate the 

Establishment Clause. Id. at 337 n.15. In 

the Sherbert line of Free Exercise Clause 

cases that later became the basis of 

RFRA, dissents and concurrences 

routinely pointed to such burdens on 

third parties but did not persuade the 

majorities of any Establishment Clause 

violation.17

The Supreme Court has applied this 

principle to allow accommodations that 

litigants claimed caused significant 

third-party harms. For example, the 

Supreme Court upheld the Title VII 

exemption for religious employers— 

discussed in Section 8—despite the 

alleged significant harms of expressly 

permitting discrimination against 

employees on the basis of religion. See 

Tex. Monthly, 489 U.S. 1, 18 n.8 (1989) 

(citing Amos). This is consistent with 

Hobby Lobby, which expressly held that 

a burden lawfully may be removed from 

a religious organization even if it allows 

such a religious objector to withhold a 

benefit from third parties. Hobby Lobby, 

573 U.S. at 729 n.37 (‘‘Nothing in the 

text of RFRA or its basic purposes 

supports giving the Government an 

entirely free hand to impose burdens on 

religious exercise so long as those 

burdens confer a benefit on other 

individuals.’’). Ultimately, government 

action that removes such a benefit 

merely leaves the third party in the 

same position in which it would have 

been had government not regulated the 

religious objector in the first place. 

Otherwise, any accommodation could 

be framed as burdening a third party. 

That would ‘‘render[ ] RFRA 

meaningless.’’ Hobby Lobby, 573 U.S. at 

729 n.37. ‘‘[F]or example, the 

Government could decide that all 

supermarkets must sell alcohol for the 

convenience of customers (and thereby 

exclude Muslims with religious 

objections from owning supermarkets), 

or it could decide that all restaurants 

must remain open on Saturdays to give 

employees an opportunity to earn tips 

(and thereby exclude Jews with 

religious objections from owning 

restaurants).’’ Id.; see also Attorney 

General’s Memorandum, Principle 15, 

82 FR at 49670. 

Finally, OFCCP views these 

comments as addressed more to the 

religious exemption itself, which is not 

at issue here, than to this rule. Congress 

decided in enacting Title VII, and the 

President decided in amending E.O. 

11246, that preserving the integrity of 

religious organizations merited an 

exemption from the religious-neutrality 

requirements that would otherwise 

apply to their employees. OFCCP does 

not and could not question those 

judgments. Further, insofar as 

commenters argued that the test 

expands the number of contractors that 

might qualify for the exemption, that 

fact alone does not show any third-party 

harm. Indeed, among the rule’s intended 

purposes is expanding the pool of 


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contractors while avoiding religious 

entanglement. No contractor is 

compelled to seek the exemption, and 

no contractor so exempted is compelled 

by receipt of the exemption to take any 

particular employment action. See 

Amos, 337 n.15. To the contrary, the 

Title VII case law confirms that religious 

employers have flexibility to 

accommodate employees’ religious 

preferences if they so choose. See 

Kennedy, 657 F.3d at 194. Additionally, 

OFCCP discusses below, regarding the 

scope of the exemption, how this rule 

interacts with other protected classes 

and the proper balance between 

employers’ and employees’ freedoms 

and rights. OFCCP believes it has 

provided an accommodation that 

reasonably addresses these interests. 

g. Other Features 

The final rule retains two proposed 

non-determinative features in the 

definition of Religious corporation, 

association, educational institution, or 

society. Those are the statements that 

the organization ‘‘may or may not’’ 

‘‘have a mosque, church, synagogue, 

temple, or other house of worship’’ or 

‘‘be supported by, be affiliated with, 

identify with, or be composed of 

individuals sharing, any single religion, 

sect, denomination, or other religious 

tradition.’’ With regard to these features, 

some commenters expressed support, 

and other commenters expressed 

opposition. For example, one religious 

education association commented, in 

support of the absence of a requirement 

that the contractor ‘‘[h]ave a mosque, 

church, synagogue, temple, or other 

house of worship’’ that religious schools 

that are controlled by a body of religious 

leaders directly connected to the school 

are no less ‘‘controlled by a religious 

organization’’ than are schools 

controlled by hierarchical religious 

denominations. OFCCP continues to 

believe that requiring these features 

could lead the agency to discriminate 

among religions, which could violate 

the First Amendment’s Establishment 

Clause. See World Vision, 633 F.3d at 

732 & n.9 (O’Scannlain, J., concurring). 

For these reasons and the reasons 

described in the preamble to the 

proposed rule, see 84 FR at 41684, 

OFCCP agrees with the commenters 

who stated that it is appropriate not to 

require that contractors have these 

features to be deemed religious. 

3. Definition of Exercise of Religion 

OFCCP proposed to define Exercise of 

religion as the term is defined for 

purposes of RFRA. RFRA, in 42 U.S.C. 

2000bb–2(4), defines ‘‘exercise of 

religion’’ to mean ‘‘religious exercise’’ as 

defined in the Religious Land Use and 

Institutionalized Persons Act (RLUIPA), 

42 U.S.C. 2000cc–5(7). RLUIPA, in turn, 

defines ‘‘religious exercise’’ as including 

‘‘any exercise of religion, whether or not 

compelled by, or central to, a system of 

religious belief.’’ This definition is wellestablished and prevents problematic 

inquiries into the ‘‘centrality’’ of a 

religious practice, which are discussed 

later in this preamble. However, the 

phrase ‘‘exercise of religion’’ in the 

proposed rule appeared only as part of 

the proposed definition of Religious 

corporation, association, educational 

institution, or society. That definition 

has been changed to adhere more 

closely to Judge O’Scannlain’s 

concurrence in World Vision, and the 

words ‘‘exercise of religion’’ no longer 

appear in that prong of the definition. 

Thus there is no need for regulatory text 

to define them. With that said, OFCCP 

will look to general principles of First 

Amendment law and the RFRA– 

RLUIPA definition of ‘‘exercise of 

religion’’ when assessing whether an 

organization is engaging ‘‘in activity 

consistent with, and in furtherance of,’’ 

its religious purpose, and when 

assessing whether its employment 

action has a religious basis. Therefore, 

OFCCP addresses below the comments 

received on the proposed definition of 

Exercise of religion. 

Several commenters generally 

approved of the definition for the 

reasons stated in the NPRM, while 

others generally opposed the proposed 

definition. Those generally opposed 

asserted that RFRA was not a relevant 

authority given that it is a different 

statute, that the borrowed provision was 

vague and did not provide clarity but 

rather represented an attempt to ‘‘create 

new law,’’ and that the breadth of the 

definition did not provide ‘‘guardrails 

for the manner in which employers can 

require their employees to adhere to 

certain principles.’’ Others commenters 

raised more specific issues. A group of 

state attorneys’ general noted that the 

broad definition of religious exercise in 

RFRA is moderated by its substantial 

burden requirement, which the 

proposed definition did not include. 

Others noted issues with the term in the 

context of the ‘‘engages in’’ language 

directly preceding it; some believed the 

two in tandem were vague and 

overbroad, while one commenter sought 

specific guidance in the final rule that 

‘‘religious speech’’ could be an exercise 

of religion. 

OFCCP has considered these 

comments and continues to believe that 

the RFRA–RLUIPA definition of 

‘‘exercise of religion’’ is relevant in this 

context, although, for the reasons stated 

above, there is no need for the final rule 

to define the term. RFRA and RLUIPA 

are well-established laws regarding 

religious freedom that are broadly 

applicable, and they provide a familiar 

framework that will assist OFCCP in 

assessing both whether a contractor is 

engaging ‘‘in activity consistent with, 

and in furtherance of,’’ its religious 

purpose and whether its employment 

action has a religious basis. 

4. Definition of Sincere 

The principles discussed above with 

regard to the definition of Exercise of 

religion are incorporated in the 

definition of Sincere that OFCCP 

proposed. In line with court precedent 

and OFCCP’s principles, the critical 

inquiry for OFCCP is whether a 

particular employment decision was in 

fact a sincere exercise of religion. 

Consistent with that inquiry, and for the 

reasons explained above, the final rule’s 

definition of Particular religion specifies 

that the religious tenets the contractor 

applies to its employees must be 

‘‘sincere.’’ OFCCP, like courts, ‘‘merely 

asks whether a sincerely held religious 

belief actually motivated the 

institution’s actions.’’ Geary v. 

Visitation of Blessed Virgin Mary Parish 

Sch., 7 F.3d 324, 330 (3d Cir. 1993). The 

religious organization’s burden ‘‘to 

explain is considerably lighter than in a 

non-religious employer case,’’ since the 

organization, ‘‘at most, is called upon to 

explain the application of its own 

doctrines.’’ Id. ‘‘Such an explanation is 

no more onerous than is the initial 

burden of any institution in any First 

Amendment litigation to advance and 

explain a sincerely held religious belief 

as the basis of a defense or claim.’’ Id.; 

see United States v. Seeger, 380 U.S. 

163, 185 (1965) (holding whether a 

belief is ‘‘truly held’’ is ‘‘a question of 

fact’’). The sincerity of religious exercise 

is often undisputed or stipulated. See, 

e.g., Hobby Lobby, 573 U.S. at 717 (‘‘The 

companies in the cases before us are 

closely held corporations, each owned 

and controlled by members of a single 

family, and no one has disputed the 

sincerity of their religious beliefs.’’); 

Holt, 574 U.S. at 361 (‘‘Here, the 

religious exercise at issue is the growing 

of a beard, which petitioner believes is 

a dictate of his religious faith, and the 

Department does not dispute the 

sincerity of petitioner’s belief.’’). 

Further, as the Supreme Court has 

repeatedly counseled, ‘‘religious beliefs 

need not be acceptable, logical, 

consistent, or comprehensible to others 

in order to merit First Amendment 

protection.’’ Church of the Lukumi 

Babalu Aye, Inc. v. City of Hialeah, 508 

U.S. 520, 531 (1993) (quoting Thomas, 


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450 U.S. at 714) (internal quotation 

marks omitted); see also, e.g., United 

States v. Ballard, 322 U.S. 78, 86 (1944) 

(‘‘[People] may believe what they cannot 

prove. They may not be put to the proof 

of their religious doctrines or beliefs.’’). 

To merit protection, religious beliefs 

must simply be ‘‘sincerely held.’’ E.g., 

Frazee v. Ill. Dep’t of Emp’t Sec., 489 

U.S. 829, 834 (1989); Seeger, 380 U.S. at 

185. Courts have appropriately relied on 

the ‘‘sincerely held’’ standard when 

evaluating religious discrimination 

claims in the Title VII context. See, e.g., 

Davis v. Fort Bend Cnty., 765 F.3d 480, 

485 (5th Cir. 2014); Philbrook v. 

Ansonia Bd. of Educ., 757 F.2d 476, 

481–82 (2d Cir. 1985); Redmond v. GAF 

Corp., 574 F.2d 897, 901 n.12 (7th Cir. 

1978). In such cases, a court must 

‘‘vigilantly separate the issue of 

sincerity from the factfinder’s 

perception of the religious nature of the 

[employee’s] beliefs.’’ EEOC v. Union 

Independiente de la Autoridad de 

Acueductos y Alcantarillados, 279 F.3d 

49, 57 (1st Cir. 2002) (alteration in 

original) (quoting Patrick v. LeFevre, 

745 F.2d 153, 157 (2d Cir. 1984)) 

(internal quotation marks omitted). 

Some commenters opposed requiring 

only that exercise of religion be 

‘‘sincere,’’ which they characterized as 

broadening the exemption. They warned 

that this expands exercise of religion 

beyond its current meaning and that 

sincerity cannot be reasonably applied. 

For example, a labor union stated that 

‘‘sincerity’’ is not a concept that can 

sensibly be applied to organizations, 

much less to for-profit businesses that 

would be included in the scope of the 

religious exemption under the Proposed 

Rule. A group of state attorneys general 

commented that, by requiring only 

sincerity, OFCCP ‘‘seeks to expand 

RFRA’s already broad definition of 

‘exercise of religion.’’’ An individual 

commenter wrote that the proposal 

would grant large for-profit government 

contractors a hiring exemption as long 

as they could articulate any strongly 

held belief. 

Other commenters expressed support 

for a sincerity test. For example, a 

religious liberties legal organization 

wrote: ‘‘Attempts to use religion to hide 

discriminatory intent are generally not 

successful.’’ OFCCP agrees with these 

commenters. Other commenters also 

expressed general support for the 

proposed definition, stating that it will 

help ensure that important protections 

against discrimination remain in place 

while at the same time preventing 

government overreach and protecting 

religious practice. For instance, the 

same religious liberties legal 

organization commented that legal 

precedent regarding sincerity and the 

compelling government interest in 

preventing discrimination will survive 

without excessive government 

involvement. 

Many other commenters opposed the 

proposed, arguing that it would not 

require entities to be internally 

consistent in applying their selfproclaimed religious tenets to various 

groups. For instance, a group of U.S. 

Senators asserted that the proposed 

definition ‘‘does not require consistency 

in the application of policy based upon 

religious tenets’’ such that an entity 

opposed to body modification, for 

instance, could ignore tenets regarding 

tattoos but fire a transgender worker for 

seeking health care without triggering 

scrutiny. An LGBT rights advocacy 

organization echoed this concern. Some 

commenters also opposed OFCCP’s 

statement that ‘‘the sincerity of religious 

exercise is often undisputed or 

stipulated’’ because, they stated, it 

raised concerns regarding the depth of 

OFCCP’s inquiry under the proposed 

definition. A state civil rights 

organization commented, for instance, 

that this portion of the preamble seemed 

to signal that OFCCP will not inquire 

about sincerity, despite the fact that 

whether a belief is sincerely held can 

only be determined by weighing the 

strength of evidence. Likewise, an 

organization that advocates separation 

of church and state commented that the 

preamble’s discussion, particularly its 

‘‘equivocal views’’ on policies aimed at 

determining the sincerity of an adverse 

employment action, creates uncertainty 

as to whether OFCCP will actually 

weigh factors intended to determine 

sincerity. An LGBT rights advocacy 

organization expressed substantially 

identical concerns. 

As noted in the NPRM, in assessing 

sincerity, OFCCP will take into account 

all relevant facts, including whether the 

contractor had a preexisting basis for its 

employment policy and whether the 

policy has been applied consistently to 

comparable persons, although absolute 

uniformity is not required. See Kennedy, 

657 F.3d at 194 (noting that the Title VII 

religious exemption permits religious 

organizations to ‘‘consider some attempt 

at compromise’’); LeBoon, 503 F.3d at 

229 (‘‘[R]eligious organizations need not 

adhere absolutely to the strictest tenets 

of their faiths to qualify for Section 702 

protection.’’); see also Killinger v. 

Samford Univ., 113 F.3d 196, 199–200 

(11th Cir. 1997). But despite 

commenters’ focus on the need for 

‘‘internal consistency’’ in religious 

organizations’ doctrine—such as a rule 

that if tattoos are permitted, transgender 

medical procedures must be as well— 

rather than consistency across similarly 

situated employees, OFCCP cannot 

assess the ‘‘relative severity of 

[religious] offenses’’ or otherwise weigh 

doctrinal matters, for that would 

‘‘violate the First Amendment.’’ CurayCramer v. Ursuline Acad. of 

Wilmington, Del., Inc., 450 F.3d 130, 

139 (3d Cir. 2006). 

OFCCP will also evaluate any 

evidence that indicates an insincere 

sham, such as acting ‘‘in a manner 

inconsistent with that belief’’ or 

‘‘evidence that the adherent materially 

gains by fraudulently hiding secular 

interests behind a veil of religious 

doctrine.’’ Philbrook, 757 F.2d at 482 

(quoting Int’l Soc’y for Krishna 

Consciousness, Inc. v. Barber, 650 F.2d 

430, 441 (2d Cir. 1981)) (internal 

quotation marks omitted); cf., e.g., 

Hobby Lobby, 573 U.S. at 717 n.28 (‘‘To 

qualify for RFRA’s protection, an 

asserted belief must be ‘sincere’; a 

corporation’s pretextual assertion of a 

religious belief in order to obtain an 

exemption for financial reasons would 

fail.’’); United States v. Quaintance, 608 

F.3d 717, 724 (10th Cir. 2010) (Gorsuch, 

J.) (‘‘[T]he record contains additional, 

overwhelming contrary evidence that 

the [defendants] were running a 

commercial marijuana business with a 

religious front . . . .’’). OFCCP’s 

application of the religious exemption is 

described in more detail below. 

Despite these assurances, several 

commenters who opposed the proposed 

definition said that it is vague or 

unworkable in practice. For instance, a 

group of state attorneys general 

expressed concern that the definition 

may increase confusion among 

contractors seeking to claim religious 

exemptions because the question of how 

a for-profit organization can 

demonstrate the sincerity of its religious 

beliefs is largely untested. Thus, 

according to the attorneys general, 

contractors will have to contend with a 

high level of uncertainty in addition to 

their obligations under Title VII. A 

religious legal organization that 

otherwise supported the proposed rule 

highlighted the fact that the proposed 

definition of sincere is ‘‘simply what 

courts determine ‘when ascertaining the 

sincerity of a party’s religious exercise 

or belief.’’’ The commenter expressed 

skepticism that courts could arrive at a 

concise and uniform test for the 

meaning of the term without more 

specific guidance from OFCCP. 

OFCCP disagrees that ascertaining the 

sincerity of an organization’s religious 

exercise, even a for-profit one, will 

foster confusion or that it presents 

insurmountable practical difficulties. 

Religious sincerity is a familiar and 


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well-developed legal principle. It has 

been applied in regards to a religious 

organization’s decisions under the Title 

VII religious exemption. See, e.g., Little 

v. Wuerl, 929 F.2d 944, 946 (3d Cir. 

1991) (‘‘Little does not challenge the 

sincerity of the Parish’s asserted 

religious doctrine.’’). And the Supreme 

Court rejected a similar argument ‘‘that 

Congress could not have wanted RFRA 

to apply to for-profit corporations 

because it is difficult as a practical 

matter to ascertain the sincere ‘beliefs’ 

of a corporation.’’ Hobby Lobby, 573 

U.S. at 717. Here, as there, questions of 

corporate religious beliefs are likely to 

arise only for closely held corporations, 

and ‘‘[s]tate corporate law provides a 

ready means for resolving any conflicts 

. . . .’’ Id. at 718. 

OFCCP also acknowledges the 

constitutional and prudential 

limitations on its inquiry that may come 

into play when religious matters are 

involved. OFCCP will not compare 

religious doctrines or practices in 

evaluating sincerity. See, e.g., CurayCramer, 450 F.3d at 139 (‘‘[A]ssess[ing] 

the relative severity of [religious] 

offenses . . . would violate the First 

Amendment.’’); Hall v. Baptist Mem’l 

Health Care Corp., 215 F.3d 618, 626 

(6th Cir. 2000) (‘‘[T]he First Amendment 

does not permit federal courts to dictate 

to religious institutions how to carry out 

their religious missions or how to 

enforce their religious practices.’’). Nor 

will OFCCP require contractors to 

adhere to strict, uniform procedures to 

demonstrate sincerity. See Kennedy, 657 

F.3d at 194; LeBoon, 503 F.3d at 229. 

And where ‘‘it is impossible to avoid 

inquiry into a religious employer’s 

religious mission or the plausibility of 

its religious justification for an 

employment decision,’’ then OFCCP 

will apply the E.O. 11246 religious 

exemption. Curay-Cramer, 450 F.3d at 

141. 

Some commenters objected to 

OFCCP’s stated commitment to applying 

the ministerial exception. For instance, 

a city public advocate observed that 

OFCCP’s claim that it will evaluate any 

factors that indicate insincerity is 

undermined by the proposed rule’s 

commitment to the ministerial 

exception. Nevertheless, OFCCP 

respects and must apply the ministerial 

exception. The ministerial exception is 

an application of the Establishment and 

Free Exercise clauses of the First 

Amendment. See Our Lady of 

Guadalupe, 140 S. Ct. at 2060; HosannaTabor, 565 U.S. at 189–90 (finding that 

the ministerial exception bars ‘‘an 

employment discrimination suit brought 

on behalf of a minister’’ and observing 

that the exception ‘‘is not limited to the 

head of a religious congregation,’’ nor 

subject to ‘‘a rigid formula for deciding 

when an employee qualifies as a 

minister’’). 

For the reasons described above and 

in the NPRM, and considering the 

comments received, OFCCP finalizes the 

proposed definition without 

modification. 

5. Definition of Particular Religion 

In the NPRM, OFCCP proposed to 

define Particular religion to clarify that 

the religious exemption allows religious 

contractors not only to prefer in 

employment individuals who share 

their religion, but also to condition 

employment on acceptance of or 

adherence to religious tenets as 

understood by the employing 

contractor. The NPRM explained that 

this definition flows directly from the 

broad definition of Religion, discussed 

above, to include all aspects of religious 

belief, observance, and practice as 

understood by the employer, which 

would clarify past statements from 

OFCCP suggesting that the exemption 

was restricted solely to hiring 

coreligionists. The NPRM stated that the 

proposed definition was consistent with 

Title VII case law as well as Supreme 

Court case law holding that the 

government burdens religious exercise 

when it conditions benefits on the 

surrender of religious identity. 

The NPRM noted that the religious 

exemption does not permit religious 

employers to discriminate on other 

protected bases. The NPRM described 

how courts have used a variety of 

approaches and doctrines to distinguish 

claims of religious discrimination from 

other claims of discrimination while 

avoiding entangling inquiries under the 

First Amendment, and that OFCCP 

proposed to do the same. See 84 FR at 

41679–81. 

In a later part of the NPRM describing 

the proposed terms Exercise of religion 

and Sincere, OFCCP gave additional 

detail on its proposed approach for 

applying the religious exemption. The 

NPRM noted that sincerity is the 

‘‘touchstone’’ of religious exercise and 

that OFCCP would take into account all 

relevant facts when determining 

whether a sincere religious belief 

actually motivated an employment 

decision. The NRPM also proposed 

applying a but-for standard of causation 

when evaluating claims of 

discrimination by religious 

organizations based on protected 

characteristics other than religion. See 

84 FR at 41684–85. 

OFCCP received comments on all 

these aspects of its proposal. In response 

to the comments, the agency has made 

some adjustments in its explanation 

regarding how it views and will apply 

this definition. These include changing 

to a motivating factor standard of 

causation and providing additional 

clarification, particularly on the 

interaction of the religious exemption 

with other protected categories, 

including the importance of RFRA. As 

to the regulatory text, the word 

‘‘sincere’’ has been inserted into the 

phrase ‘‘acceptance of or adherence to 

sincere religious tenets as understood by 

the employer as a condition of 

employment,’’ to make clear both the 

requirement of sincerity and, by 

reference to the definition of Sincere, 

how sincerity is tested. Otherwise the 

definition is being finalized as 

proposed. 

Insofar as OFCCP’s view expressed 

here and in the proposed rule is a 

change from its prior position as to the 

definition of Particular religion under 

the exemption and the permissible 

practices of contractors and 

subcontractors who qualify as religious 

organizations, OFCCP believes the 

change is justified for all the reasons 

stated in the proposed rule and directly 

below. A broader view of the religious 

exemption is also consistent with one of 

OFCCP’s primary goals in this 

rulemaking, which is to increase 

economy and efficiency in government 

contracting by providing for a broader 

pool of government contractors and 

subcontractors. Issues specific to the 

EEOC’s view on this matter are 

discussed further in a separate part of 

this preamble. 

a. Burdens on Religious Organizations 

in Contracting 

As described in the NPRM, OFCCP’s 

approach here is consistent with 

Supreme Court decisions emphasizing 

that ‘‘condition[ing] the availability of 

benefits upon a recipient’s willingness 

to surrender his religiously impelled 

status effectively penalizes the free 

exercise of his constitutional liberties.’’ 

Trinity Lutheran, 137 S. Ct. at 2022 

(alterations omitted) (quoting McDaniel 

v. Paty, 435 U.S. 618, 626 (1978) 

(plurality opinion)). These decisions 

naturally extend to include the right to 

compete on a level playing field for 

federal government contracts. See id. 

(holding the government burdens 

religious exercise when it so conditions 

‘‘a benefit or privilege,’’ ‘‘eligibility for 

office,’’ ‘‘a gratuitous benefit,’’ or the 

ability ‘‘to compete with secular 

organizations for a grant’’ (quoted 

sources omitted)); accord E.O. 13831 § 1 

(‘‘The executive branch wants faithbased and community organizations, to 

the fullest opportunity permitted by 


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79344 Federal Register / Vol. 85, No. 237 / Wednesday, December 9, 2020 / Rules and Regulations 

law, to compete on a level playing field 

for . . . contracts . . . and other Federal 

funding opportunities.’’). 

A few commenters praised OFCCP’s 

reliance on Trinity Lutheran to establish 

the principle that benefits cannot be 

conditioned on surrendering religious 

status. For example, a religious public 

policy women’s organization stated that 

no one should be forced to abandon 

their faith when operating their business 

or participating in government 

programs. Similarly, a religious liberty 

legal organization commented that 

religious contractors should be allowed 

to serve on equal terms as all other 

contractors, without having to 

compromise their faith-based identities. 

A few commenters stated that Trinity 

Lutheran and other Supreme Court 

cases discussed in the preamble to the 

NPRM do not support or require the 

proposed definition. For example, an 

organization that advocates separation 

of church and state commented that 

religious organizations are already 

eligible to compete for government 

contracts, which is all that is required 

by Trinity Lutheran. In addition, a 

religious organization commented that 

‘‘the rule violates the Establishment 

Clause of the First Amendment by 

funding positions which require specific 

religious beliefs and customs.’’ OFCCP 

believes, however, that its interpretation 

of the scope of the religious exemption 

is consistent with the principles of 

religious freedom articulated in Trinity 

Lutheran and other Supreme Court 

cases. 

First, restricting religious 

organizations’ ability to employ those 

aligned with their mission burdens their 

religious exercise, even when those 

employees do not engage in expressly 

religious activity. As the Supreme Court 

recognized in Amos, the religious 

exemption’s protection for all activities 

of religious organizations alleviates the 

burden of government interference with 

those religious organizations’ missions. 

See Amos, 483 U.S. at 336. And as the 

Department of Justice’s Office of Legal 

Counsel has concluded: 

[T]he Court’s opinion in Amos, together with 

Justice Brennan’s concurring opinion in the 

case, indicates that prohibiting religious 

organizations from hiring only coreligionists 

can ‘ ‘‘impose a significant burden on their 

exercise of religion, even as applied to 

employees in programs that must, by law, 

refrain from specifically religious 

activities.’ ’’ The .’’ Mem. for Brett 

Kavanaugh, Assoc. Counsel to the Pres., from 

Sheldon T. Bradshaw, Deputy Ass’t Att’y 

Gen., Office of Legal Counsel further 

explained:, Re: Section 1994A (Charitable 

Choice) of H.R. 7, The Community Solutions 

Act at 4 (June 25, 2001) . . . . Many religious 

organizations and associations engage in 

extensive social welfare and charitable 

activities, such as operating soup kitchens 

and day care centers or providing aid to the 

poor and the homeless. Even where the 

content of such activities is secular—in the 

sense that it does not include religious 

teaching, proselytizing, prayer or ritual—the 

religious organization’s performance of such 

functions is likely to be ‘‘infused with a 

religious purpose.’’ Amos, 483 U.S. at 342 

(Brennan, J., concurring). And churches and 

other religious entities ‘‘often regard the 

provision of such services as a means of 

fulfilling religious duty and of providing an 

example of the way of life a church seeks to 

foster.’’ Id. at 344 (footnote omitted). In other 

words, the provision of ‘‘secular’’ social 

services and charitable works that do not 

involve ‘‘explicitly religious content’’ and are 

not ‘‘designed to inculcate the views of a 

particular religious faith,’’ Bowen v. 

Kendrick, 487 U.S. 589, 621 (1988), 

nevertheless may well be ‘‘religiously 

inspired,’’ id., and play an important part in 

the ‘‘furtherance of an organization’s 

religious mission.’’ Amos, 483 U.S. at 342 

(Brennan, J., concurring). 

31 O.L.C. 162, 172 172–73 (2007) 

Second, this burden exists even when 

not imposed directly. The Office of 

Legal Counsel, in the same opinion, 

further recognized that a burden on 

religious organizations’ free exercise of 

religion can occur not only through 

direct imposition of requirements but 

through conditions on grants or other 

benefits, citing many of the same cases 

cited in Trinity Lutheran for that 

proposition. See 31 O.L.C. at 174–75; 

Trinity Lutheran, 137 S. Ct. at 2022. 

Those concerns about burdening 

religious exercise through conditions 

naturally extend to conditions on 

contracts as well. See Office of the Att’y 

Gen., Memorandum for All Executive 

Departments and Agencies: Federal Law 

Protections for Religious Liberty at 2, 6, 

8, 14a–16a (Oct. 6, 2017), available at 

www.justice.gov/opa/press-release/file/ 

1001891/download. Third, the 

definition of Particular religion 

promulgated here attempts to alleviate 

that burden by permissibly 

accommodating religious organizations. 

‘‘[T]he government may (and sometimes 

must) accommodate religious practices 

and . . . may do so without violating 

the Establishment Clause. . . . There is 

ample room under the Establishment 

Clause for ‘benevolent neutrality which 

will permit religious exercise to exist 

without sponsorship and without 

interference.’ ’’ Amos, 483 U.S. at 344 

(quoting Walz v. Tax Comm’n, 397 U.S. 

664, 673 (1970)). See also E.O. 13279 

§ 4; 68 FR at 56393 (codified at 41 CFR 

60–1.5(a)(5)). This rule relieves religious 

organizations of government 

interference by permitting them to take 

into account their employees’ particular 

religion—including acceptance of or 

adherence to religious tenets—to ensure 

their employees are committed to the 

religious organization. In some 

instances, as described below, RFRA 

may also come into play to require 

accommodations. 

Regarding the comment that the rule 

violates the Establishment Clause by 

funding positions that require specific 

religious beliefs or customs, that is a 

criticism of the E.O. 11246 religious 

exemption itself, which has been part of 

federal law for nearly twenty years and 

is not at issue in this rulemaking. This 

is addressed more below. 

b. The Exemption’s Scope: 

Coreligionists 

As explained in the NPRM, the 

religious exemption is not restricted to 

a purely denominational preference. 

The religious exemption allows 

religious contractors not only to prefer 

in employment individuals who share 

their religion, but also to condition 

employment on acceptance of or 

adherence to religious tenets as 

understood by the employing 

contractor. This definition flows 

directly from the broad definition of 

Religion, discussed above, to include all 

aspects of religious belief, observance, 

and practice as understood by the 

employer. It is also consistent with Title 

VII case law holding that ‘‘the 

permission to employ persons ‘of a 

particular religion’ includes permission 

to employ only persons whose beliefs 

and conduct are consistent with the 

employer’s religious precepts.’’ Little, 

929 F.2d at 951; see also, e.g., Kennedy, 

657 F.3d at 194 (‘‘Congress intended the 

explicit exemptions to Title VII to 

enable religious organizations to create 

and maintain communities composed 

solely of individuals faithful to their 

doctrinal practices, whether or not every 

individual plays a direct role in the 

organization’s ‘religious activities.’ ’’ 

(quoting Little, 929 F.2d at 951)); Hall, 

215 F.3d at 624 (‘‘The decision to 

employ individuals ‘of a particular 

religion’ under [42 U.S.C.] § 2000e–1(a) 

and § 2000e–2(e)(2) has been interpreted 

to include the decision to terminate an 

employee whose conduct or religious 

beliefs are inconsistent with those of its 

employer.’’ (citing, inter alia, Little, 929 

F.2d at 951)); Killinger, 113 F.3d at 200 

(‘‘[T]he exemption [in 42 U.S.C. 2000e– 

1(a)] allows religious institutions to 

employ only persons whose beliefs are 

consistent with the employer’s when the 

work is connected with carrying out the 

institution’s activities.’’). 

This approach is also consistent with 

Supreme Court decisions emphasizing 

that ‘‘condition[ing] the availability of 

benefits upon a recipient’s willingness 


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18These 2015 FAQs are archived at https://

web.archive.org/web/20150709220056/http:/ 

www.dol.gov/ofccp/LGBT/LGBT_FAQs.html. 

to surrender his religiously impelled 

status effectively penalizes the free 

exercise of his constitutional liberties.’’ 

Trinity Lutheran, 137 S. Ct. at 2022 

(alterations omitted) (quoting McDaniel, 

435 U.S. at 626 (plurality opinion)). 

These decisions naturally extend to 

include the right to compete on a level 

playing field for federal government 

contracts. See id. (holding the 

government burdens religious exercise 

when it so conditions ‘‘a benefit or 

privilege,’’ ‘‘eligibility for office,’’ ‘‘a 

gratuitous benefit,’’ or the ability ‘‘to 

compete with secular organizations for 

a grant’’ (quoted sources omitted)); 

accord E.O. 13831 § 1 (‘‘The executive 

branch wants faith-based and 

community organizations, to the fullest 

opportunity permitted by law, to 

compete on a level playing field for . . . 

contracts . . . and other Federal funding 

opportunities.’’). 

OFCCP believes this clarification will 

assist contractors that have looked for 

guidance on the religious exemption in 

OFCCP’s past statements. These past 

statements may have suggested that the 

exemption permits qualifying 

organizations only to prefer members of 

their own faith in their employment 

practices. See, e.g., OFCCP, Compliance 

Webinar (Mar. 25, 2015), available at 

https://www.dol.gov/ofccp/LGBT/FTS_

TranscriptEO13672_PublicWebinar_ES_

QA_508c.pdf (‘‘This exemption allows 

religious organizations to hire only 

members of their own faith.’’). OFCCP 

based such statements on guidance from 

the EEOC, the agency primarily 

responsible for enforcing Title VII. See, 

e.g., EEOC, EEOC Compliance Manual 

§ 12–I.C.1 (July 22, 2008) (‘‘Under Title 

VII, religious organizations are 

permitted to give employment 

preference to members of their own 

religion.’’). However, with this final 

rule, OFCCP is clarifying that it applies 

the principles discussed above, 

permitting qualifying employers to take 

religion—defined more broadly than 

simply preferring coreligionists—into 

account in their employment decisions. 

The case law makes clear that qualifying 

employers ‘‘need not enforce an acrossthe-board policy of hiring only 

coreligionists.’’ LeBoon, 503 F.3d at 230; 

Killinger, 113 F.3d at 199–200 (‘‘We are 

also aware of no requirement that a 

religious educational institution engage 

in a strict policy of religious 

discrimination—such as always 

preferring Baptists in employment 

decisions—to be entitled to the 

exemption.’’). 

Some commenters expressed support 

for OFCCP’s proposal to extend the 

definition beyond preferring 

coreligionists, which they viewed as 

overly narrow, to include acceptance of 

or adherence to religious tenets as a 

condition of employment. Many of these 

commenters agreed with OFCCP that the 

definition as proposed was necessary to 

ensure that religious organizations 

could carry out their missions without 

losing their identities. For example, a 

religious school association commented 

that being able to ensure that applicants 

and employees concur with its schools’ 

religion-based conduct expectations is 

essential to fulfilling the schools’ 

religious mission. Similarly, a religious 

civil rights organization commented that 

the entire ‘‘raison d’eˆtre’’ of religious 

non-profits would be undermined if 

employees could subvert their religious 

missions. Other commenters, including 

a religious medical organization, a 

religious liberty coalition, and a state 

religious public policy organization, 

echoed these sentiments in support of 

the proposal. A private religious 

university further asserted that the 

proposed definition would increase 

religious diversity, because its 

protections are not limited to hiring 

decisions based on co-religiosity but 

also allow organizations to hire based 

on applicants’ support for their religious 

missions. 

Many commenters asserted that the 

proposed definition conflicts with the 

EEOC’s interpretation, OFCCP’s 

previous interpretation, or both. For 

example, a civil liberties organization 

commented that the EEOC interprets the 

text of the Title VII religious exemption 

to mean that religious organizations may 

give employment preference to members 

of their own religion. Several 

commenters referred to OFCCP’s 

previous interpretation as reflected in 

its 2015 answers to FAQs regarding the 

E.O. 13672 Final Rule.18 For example, a 

legal think tank noted that in 2015, 

OFCCP issued guidance mirroring the 

EEOC’s interpretation of the Title VII 

religious exemption and confirming that 

the plain text of section 204(c) is limited 

to religious organizations with hiring 

preferences for coreligionists and to the 

ministerial exemption. Other 

commenters, including an LGBT legal 

services organization, a reproductive 

rights organization, and a public policy 

research and advocacy organization, 

made similar points. 

OFCCP appreciates the various 

comments received on this topic. After 

careful consideration, OFCCP disagrees 

with the comments arguing that the 

religious exemption should extend no 

further than a coreligionist preference 

for several reasons. 

First, a coreligionist preference could 

be construed narrowly, as some 

commenters seemed to urge, as allowing 

religious organizations to prefer those 

who share a religious identity in name 

but nothing more. OFCCP disagrees that 

the exemption should be construed to 

permit religious employers to prefer 

fellow members of their faith—or people 

who profess to be members of their 

faith—but forbid requiring their 

adherence to that faith’s tenets in word 

and deed. Religious employers can 

require more than nominal membership 

from their employees, as shown by 

Amos, where the plaintiffs were 

discharged for failing to qualify for a 

certificate showing that they were 

members of the employer’s church and 

met certain standards of religious 

conduct. See 483 U.S. at 330 n.4; Amos 

v. Corp. of Presiding Bishop of Church 

of Jesus Christ of Latter-Day Saints, 594 

F. Supp. 791, 796 (D. Utah 1984) 

(describing plaintiffs’ failure to meet 

church worthiness requirements), rev’d, 

483 U.S. 327; see also Killinger, 113 

F.3d at 198–200 (holding despite 

plaintiff’s claim that he subscribed to 

university’s ‘‘legitimate religious 

requirements,’’ including the 

requirement to ‘‘subscribe to the 1963 

Baptist Statement of Faith and 

Message,’’ he was permissibly removed 

from a teaching post in the divinity 

school ‘‘because he did not adhere to 

and sometime[s] questioned the 

fundamentalist theology advanced by 

the [school’s] leadership’’ (first 

alteration in original)). Any other course 

would entangle OFCCP in deciding 

between competing views of a religion’s 

requirements—in essence, deciding for 

example, ‘‘who is and who is not a good 

Catholic.’’ Maguire v. Marquette Univ., 

627 F. Supp. 1499, 1500 (E.D. Wis. 

1986) (holding despite plaintiff’s claim 

to be Catholic, a Catholic religious 

university permissibly declined to hire 

her ‘‘because of her perceived hostility 

to the institutional church and its 

teachings’’), aff’d in part, vacated in 

part, 814 F.2d 1213 (7th Cir. 1987). 

OFCCP is not permitted to make such 

determinations. See Our Lady of 

Guadalupe, 140 S. Ct. at 2068–69 

(‘‘[D]etermining whether a person is a 

‘co-religionist’ will not always be easy. 

See Reply Brief 14 (‘Are Orthodox Jews 

and non-Orthodox Jews coreligionists? 

. . . Would Presbyterians and Baptists 

be similar enough? Southern Baptists 

and Primitive Baptists?’). Deciding such 

questions would risk judicial 

entanglement in religious issues.’’); 

Hall, 215 F.3d at 626–27 (‘‘If a particular 


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79346 Federal Register / Vol. 85, No. 237 / Wednesday, December 9, 2020 / Rules and Regulations 

religious community wishes to 

differentiate between the severity of 

violating two tenets of its faith, it is not 

the province of the federal courts to say 

that such differentiation is 

discriminatory and therefore warrants 

Title VII liability.’’ (quoted source 

omitted)); Presbyterian Church in U.S. 

v. Mary Elizabeth Blue Hull Mem’l 

Presbyterian Church, 393 U.S. 440, 449– 

50 (1969) (‘‘Plainly, the First 

Amendment forbids civil courts from 

playing such a role [in interpreting 

particular church doctrines and their 

importance to the religion].’’). 

In addition, some commenters argued 

that the religious exemption might 

allow religious employers to require 

faithfulness of a coreligionist employee, 

but the exemption does not permit them 

to impose religious requirements on 

their other employees. OFCCP declines 

to so narrow its interpretation of the 

exemption. The exemption was 

expanded decades ago to include 

employees engaged not just in the 

organization’s religious activities, but in 

any of its activities. And the purpose of 

the religious exemption is to preserve 

‘‘the ability of religious organizations to 

define and carry out their religious 

missions.’’ Amos, 483 U.S. at 335. As 

other commenters stated, some religious 

organizations hire employees outside 

their faith tradition yet require those 

employees to follow at least some 

religious standards in order to preserve 

the organization’s integrity Courts have 

recognized the legitimacy of that view. 

See Kennedy, 657 F.3d at 190–91 

(holding a religious nursing-care facility 

affiliated with the Roman Catholic 

Church was protected by the religious 

exemption when it took action against 

an employee of a different faith who 

refused to change her own religiously 

inspired garb); Little, 929 F.2d at 951 

(‘‘[I]t does not violate Title VII’s 

prohibition of religious discrimination 

for a parochial school to discharge a 

Catholic or a non-Catholic teacher who 

has publicly engaged in conduct 

regarded by the school as inconsistent 

with its religious principles.’’ (emphasis 

added)). This view is also consistent 

with guidance from the U.S. Department 

of Justice. See Office of the Att’y Gen., 

Memorandum for All Executive 

Departments and Agencies: Federal Law 

Protections for Religious Liberty (Oct. 6, 

2017), www.justice.gov/opa/pressrelease/file/1001891/download (stating 

that, under the Title VII religious 

exemption, ‘‘a Lutheran secondary 

school may choose to employ only 

practicing Lutherans, only practicing 

Christians, or only those willing to 

adhere to a code of conduct consistent 

with the precepts of the Lutheran 

community sponsoring the school’’). 

Beyond compromising the integrity of 

religious organizations, OFCCP would 

be wary of drawing a line here between 

coreligionist employees and other 

employees for other reasons. As 

illustrated by the cases declining to 

decide ‘‘who is and who is not a good 

Catholic,’’ OFCCP does not believe it 

should or could in disputed cases 

decide who is a coreligionist. This 

would be especially difficult when the 

employer has no particular 

denomination, as there would be no 

simple denominational match between 

the employer and employee. Cases like 

World Vision and Little v. Wuerl show 

that a religious organization may require 

that its employees subscribe to certain 

precepts regardless of their particular 

religious affiliation, if they have any 

affiliation at all. OFCCP must, and 

should, treat these religious 

organizations equally with those that 

have a defined denominational 

membership. See World Vision, 633 

F.3d at 731 (O’Scannlain, J., 

concurring). 

OFCCP also views an artificial line 

between coreligionists and noncoreligionists as presenting an 

unwelcome either-or dilemma for 

religious organizations. By declining to 

draw such a line, a religious 

organization would be permitted to 

require certain religious practices or 

conduct from its coreligionist 

employees, but not from its noncoreligionist employees; yet the 

religious organization would also be 

permitted to, for instance, decline to 

hire or promote that same noncoreligionist altogether. In other words, 

a religious organization could 

discriminate against a non-coreligionist 

altogether in hiring or promotion, but 

could not instead offer a job or 

promotion contingent on adherence to 

certain mission-oriented religious 

criteria. Religious organizations should 

be, and under this rule continue to be, 

permitted to use this middle ground. 

See Kennedy, 657 F.3d at 194. 

c. The Exemption’s Scope: Employment 

Practices 

In a related vein, commenters also 

shared their views on not only which 

employees should be covered by the 

exemption, but also which employment 

practices of religious organizations 

should be protected by the exemption. 

Some of these commenters asserted that 

the proposed definition was too broad. 

For example, a transgender civil rights 

organization commented that, because 

the proposed definition encompasses 

‘‘all aspects of religious belief, 

observance and practice as understood 

by the employer,’’ it would permit the 

subjective viewpoint of the employer to 

determine what constitutes religion. 

Similarly, a reproductive rights 

organization claimed that the proposed 

rule would expand the scope of the 

exemption in violation of federal law. 

As explained above in the discussion 

of the definition of Religion, OFCCP has 

chosen a definition that is wellestablished in federal law, including in 

the text of Title VII. See 42 U.S.C. 

2000e(j). And as explained above in the 

discussion of the definition of Religious 

corporation, association, educational 

institution, or society, OFCCP has 

significant constitutional and practical 

concerns about substituting its own 

judgment for a contractor’s view—found 

to be sincere—that a particular activity, 

purpose, or belief has religious meaning. 

It bears repeating: Any other course 

would risk ‘‘[t]he prospect of church 

and state litigating in court about what 

does or does not have religious meaning 

[, which] touches the very core of the 

constitutional guarantee against 

religious establishment.’’ Cathedral 

Acad., 434 U.S. at 133. OFCCP will 

refrain from resolving disputes between 

employers and employees as to what 

has religious meaning or not, when the 

employer proves its sincere belief that 

something does have religious meaning. 

However, as explained in more detail 

below, just because an employment 

practice is religiously motivated does 

not mean that it is always protected by 

the exemption. 

This leads to a separate set of issues 

raised by commenters. Many 

commenters who opposed the proposed 

definition stated that it is inconsistent 

with Title VII in one or more respects. 

For example, a group of state attorneys 

general stated that the proposed 

definition is contrary to the text of Title 

VII and congressional intent. 

Specifically, the group pointed out that 

the plain language of the exemption 

covers only employer preferences based 

on a ‘‘particular religion,’’ meaning that 

religious employers cannot broadly 

discriminate on the basis of religion by, 

for instance, adopting policies such as 

‘‘Jews and Muslims Need Not Apply.’’ 

Some commenters stated that the 

proposed definition is unsupported by 

Title VII case law. For example, a civil 

liberties organization criticized OFCCP 

for not citing to court decisions holding 

that the Title VII exemption is intended 

to shield employers from all religiously 

motivated discrimination, as opposed to 

discrimination that is ‘‘on the basis of 


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19This point is addressed more fulsomely in the 

next section regarding E.O. 11246’s other protected 

bases. 

20For the reasons discussed earlier, OFCCP does 

not believe restricting the exemption to a purely 

coreligionist preference is required or the most 

reasonable approach. 

religion alone.’’ 19 A city commented 

that OFCCP’s reliance on Little, 929 F.2d 

944; Kennedy, 657 F.3d 189; Hall, 215 

F.3d 618; and Killinger, 113 F.3d 196, is 

misplaced and misleading because, in 

each of those cases, the courts found 

that a religious institution with a 

substantiated religious purpose could 

discriminate against an employee 

performing work connected in some 

manner to the institution’s religious 

mission. 

The NPRM did not suggest that the 

religious exemption would permit 

religious organizations to single out 

other religions for disfavor. No 

employer OFCCP is aware of holds such 

an exclusionary policy; no commenter 

identified such an employer; and such 

a policy would run contrary to the 

country’s experience under the Title VII 

religious exemption, where no litigant 

to OFCCP’s knowledge has asserted 

such a policy. Instead, the mine run of 

cases have involved a church, religious 

educational institution, or religious 

nonprofit raising the defense that it is 

only requiring employees or 

applicants—whether strictly defined as 

coreligionists or not 20—to follow its 

own religiously inspired standards of 

belief or conduct. The exemption 

historically has been a shield, not a 

sword, and it remains so under this rule. 

OFCCP also believes it has relied 

properly on cases like Little and 

Kennedy. As stated in the NPRM, these 

cases hold that the religious exemption 

‘‘includes permission to employ only 

persons whose beliefs and conduct are 

consistent with the employer’s religious 

precepts.’’ Little, 929 F.2d at 951; see 

also, e.g., Kennedy, 657 F.3d at 194 

(‘‘Congress intended the explicit 

exemptions to Title VII to enable 

religious organizations to create and 

maintain communities composed solely 

of individuals faithful to their doctrinal 

practices, whether or not every 

individual plays a direct role in the 

organization’s ‘religious activities.’ ’’) 

(quoting Little, 929 F.2d at 951); Hall, 

215 F.3d at 624 (‘‘The decision to 

employ individuals ‘of a particular 

religion’ under [42 U.S.C.] § 2000e–1(a) 

and § 2000e–2(e)(2) has been interpreted 

to include the decision to terminate an 

employee whose conduct or religious 

beliefs are inconsistent with those of its 

employer.’’ (citing, inter alia, Little, 929 

F.2d at 951)); Killinger, 113 F.3d at 200 

(‘‘[T]he exemption [in 42 U.S.C. 2000e– 

1(a)] allows religious institutions to 

employ only persons whose beliefs are 

consistent with the employer’s when the 

work is connected with carrying out the 

institution’s activities.’’); accord Att’y 

Gen., Memorandum for All Executive 

Departments and Agencies: Federal Law 

Protections for Religious Liberty (Oct. 6, 

2017), www.justice.gov/opa/pressrelease/file/1001891/download 

(‘‘[R]eligious organizations may choose 

to employ only persons whose beliefs 

and conduct are consistent with the 

organizations’ religious precepts.’’). 

These cases were grounded in the 

basic principle that these religious 

employment criteria are permitted 

because they are necessary for the 

religious organization’s integrity. See 

Little, 929 F.2d at 950 (‘‘[T]he legislative 

history . . . suggests that the sponsors 

of the broadened exception were 

solicitous of religious organizations’ 

desire to create communities faithful to 

their religious principles.’’); Kennedy, 

657 F.3d at 193 (finding the religious 

organization exemption ‘‘ ‘reflect[s] a 

decision by Congress that the 

government interest in eliminating 

religious discrimination by religious 

organizations is outweighed by the 

rights of those organizations to be free 

from government intervention.’ ’’ 

(alteration in original) (quoting Little, 

929 F.2d at 951)); Killinger, 113 F.3d at 

201 (‘‘[F]ederal court[s] must give 

disputes about what particulars should 

or should not be taught in theology 

schools a wide-berth. Congress, as we 

understand it, has told us to do so for 

purposes of Title VII.’’); Hall, 215 F.3d 

at 623 (‘‘In recognition of the 

constitutionally-protected interest of 

religious organizations in making 

religiously-motivated employment 

decisions . . . Title VII has expressly 

exempted religious organizations from 

the prohibition against discrimination 

on the basis of religion . . . .’’). That 

means that the religious employer must 

explain how its sincere religious beliefs 

translate into particular religious 

requirements for its employees and 

applicants. Cf. Geary, 7 F.3d at 330 

(‘‘The institution, at most, is called 

upon to explain the application of its 

own doctrines.’’). But the exemption 

does not require the religious employer 

to further prove that a particular 

employee or applicant’s adherence to 

those religious requirements is 

necessary, in any contested instance, to 

further the religious organization’s 

mission. That added burden would be 

contrary to the 1972 amendment of the 

Title VII religious exemption, which 

expanded the exemption from 

employees who perform work 

connected to the organization’s religious 

activities to employees who perform 

work connected to any of the 

organization’s activities. As the 

Supreme Court observed, this expansion 

was aimed toward relieving religious 

organizations of the kind of burden 

sought by the commenters: 

[I]t is a significant burden on a religious 

organization to require it, on pain of 

substantial liability, to predict which of its 

activities a secular court will consider 

religious. The line is hardly a bright one, and 

an organization might understandably be 

concerned that a judge would not understand 

its religious tenets and sense of mission. 

Amos, 483 U.S. at 336 

OFCCP shares the same concerns 

about requiring contractors to justify 

otherwise-protected employment 

decisions as additionally furthering the 

organization’s mission. Difficulties 

could arise were OFCCP to draw 

distinctions between religiously 

motivated employment decisions that 

further an employer’s religious mission 

and those that do not. Amos observed 

that difficulty, in which the district 

court had drawn an at-least questionable 

distinction between the termination of a 

truck driver at a church-affiliated 

workshop (protected) with the 

termination of a building engineer at a 

church-affiliated gymnasium (not 

protected). See id. at 330, 333 n.13, 336 

n.14. The exemption does not require 

such hair-splitting—indeed, it appears 

to forbid it—and OFCCP sees no useful 

reason to attempt drawing such 

distinctions. See also Little, 929 F.2d at 

951 (‘‘Congress intended the explicit 

exemptions to Title VII to enable 

religious organizations to create and 

maintain communities composed solely 

of individuals faithful to their doctrinal 

practices, whether or not every 

individual plays a direct role in the 

organization’s ‘religious activities.’ ’’). 

d. The Exemption’s Scope: Other 

Protected Bases 

i. Comments 

As is made clear by the text of section 

204(c) of E.O. 11246 and the 

corresponding regulation at 41 CFR 60– 

1.5(a)(5), the religious exemption itself 

does not exempt or excuse a contractor 

from complying with other applicable 

requirements. See E.O. 11246 § 204(c) 

(‘‘Such [religious] contractors and 

subcontractors are not exempted or 

excused from complying with other 

requirements contained in this Order.’’); 

41 CFR 60–1.5(a)(5) (same). Thus, 

religious employers are not exempted 

from E.O. 11246’s requirements 

regarding antidiscrimination and 

affirmative action, generally speaking; 


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notices to applicants, employees, and 

labor unions; compliance with OFCCP’s 

implementing regulations; the 

furnishing of reports and records to the 

government; and flow-down clauses to 

subcontractors. See E.O. 11246 §§ 202– 

203. 

Although Title VII does not contain a 

corresponding proviso, courts have 

generally interpreted the Title VII 

religious exemption to be similarly 

precise, so that religious employers are 

not exempted from Title VII’s other 

provisions protecting employees. See, 

e.g., Kennedy, 657 F.3d at 192; Rayburn 

v. Gen. Conference of Seventh-Day 

Adventists, 772 F.2d 1164, 1166 (4th 

Cir. 1985); cf. Hobby Lobby, 573 U.S. at 

733 (rejecting ‘‘the possibility that 

discrimination in hiring, for example on 

the basis of race, might be cloaked as 

religious practice to escape legal 

sanction’’); Bob Jones Univ. v. United 

States, 461 U.S. 574, 604 (1983) (‘‘[T]he 

Government has a fundamental, 

overriding interest in eradicating racial 

discrimination in education . . . .’’). 

Many commenters nevertheless 

assumed that OFCCP would apply the 

proposed definition to allow religious 

contractors to discriminate on bases 

other than religion. Most of these 

commenters stated that doing so would 

be contrary to E.O. 11246, and they 

argued that OFCCP lacks authority to 

expand the existing exemption or grant 

any new exemption. For example, a 

civil liberties organization commented 

that the preamble indicates that OFCCP 

intends to authorize discrimination 

based even on other protected bases like 

sex or race, contrary to the text of E.O. 

11246. Similarly, a group of U.S. 

Senators commented that the proposed 

rule would allow employers to 

discriminate against employees on bases 

other than religion by, for instance, 

permitting employers to justify sex 

discrimination based on their religious 

tenets. 

These commenters pointed to the 

second sentence of section 204(c) of 

E.O. 11246 as supporting their criticism. 

For example, a legal think tank 

commented that it was unclear how the 

proposed rule’s ‘‘expansive definition of 

‘particular religion’ ’’ could be 

reconciled with its insistence that ‘‘an 

employer may not . . . invoke religion 

to discriminate on other bases protected 

by law.’’ 

Other commenters also stated that it 

would be inconsistent with Title VII 

case law to allow religious contractors 

to discriminate on bases other than 

religion. These commenters, including a 

legal think tank, a group of state 

attorneys general, a labor union, a civil 

liberties organization, and a 

reproductive rights organization, cited 

cases in which, they asserted, courts 

prohibited religious employers from 

discriminating on bases other than 

religion. For example, the civil liberties 

organization commented that courts 

have consistently prohibited religious 

organizations from discriminating on 

other bases, including sex, even where 

that discrimination is motivated by the 

organization’s sincere religious beliefs 

(citing Rayburn, 772 F.2d at 1166; 

Kennedy, 657 F.3d at 192; EEOC v. Pac. 

Press Publ’g Ass’n, 676 F.2d 1272, 1277 

(9th Cir. 1982), abrogated on other 

grounds by Alcazar v. Corp. of Catholic 

Archbishop of Seattle, 598 F.3d 668 (9th 

Cir. 2010); Elbaz v. Congregation Beth 

Judea, Inc., 812 F. Supp. 802, 807 (N.D. 

Ill. 1992); Dolter v. Wahlert High Sch., 

483 F. Supp. 266, 269 (N.D. Iowa 1980); 

accord McClure v. Salvation Army, 460 

F.2d 553, 558 (5th Cir. 1972)). 

Some commenters argued that 

religion has long been used as a way to 

justify discrimination. For example, an 

affirmative action professionals 

association asserted that religious 

freedom has historically been invoked 

to defend slavery, the denial of women’s 

suffrage, Jim Crow laws, and 

segregation. That commenter cited a 

recent news story in which a mixed-race 

couple was allegedly denied the use of 

a hall for a wedding because of the 

owner’s religious beliefs. 

Several commenters expressed 

concern specifically about the effect of 

the proposal on E.O. 11246’s protections 

from discrimination based on sexual 

orientation and gender identity. For 

example, an LGBT rights advocacy 

organization commented that it was 

troubled by the fact that OFCCP failed 

to cite sexual orientation and gender 

identity in the proposed rule as the 

protected characteristics most likely to 

be impacted by the rule. And a legal 

professional organization expressed 

concern that OFCCP may interpret E.O. 

11246 to allow federal contractors to 

discriminate based on sexual orientation 

as long as they cite sincere religious 

reasons for doing so. 

On the other hand, as noted above, 

other commenters expressed support for 

the proposal because they believed it 

would exempt religious organizations 

from the prohibitions on discrimination 

based on sexual orientation and gender 

identify, which would provide them 

protection to staff their organizations 

consistent with their sincere religious 

beliefs. 

Some commenters requested guidance 

to resolve the perceived conflict. For 

example, an individual commenter 

asked whether protection for a client’s 

religion or protection for an applicant or 

employee’s sexual orientation and/or 

gender identity would prevail under the 

proposed regulations. A pastoral 

membership organization stated that if 

the terms ‘‘sexual orientation’’ and 

‘‘gender identity’’ include conduct, it is 

difficult to determine whether the 

prohibition on discrimination based on 

sexual orientation and gender identity 

or the protection for religiouslymotivated conduct applies. 

Many of these commenters criticized 

the proposal for not clearly stating how 

OFCCP would resolve the perceived 

contradiction between its assertion that 

religious contractors would not be 

permitted to discriminate on other 

protected bases and its inclusion in the 

proposed definition of ‘‘acceptance of or 

adherence to religious tenets as 

understood by the employer as a 

condition of employment.’’ For 

example, the legal think tank asserted 

that OFCCP does not explain how it will 

apply these two provisions in cases in 

which they appear to conflict, and 

observed that the proposed regulatory 

text does not limit its definition of 

‘‘religious tenets’’ to tenets defined 

without reference to race, color, sex, 

sexual orientation, gender identity, or 

national origin. A state’s attorney 

general asserted that, because the 

proposed rule fails to define or limit the 

type of ‘‘conduct’’ that can form the 

basis of permissible discrimination by 

religious entities, it allows contractors 

to discriminate based on any arbitrary 

characteristic. 

Many supportive commenters 

recommended that OFCCP resolve the 

perceived conflict by clarifying that the 

non-discrimination requirements of 

Title VII and E.O. 11246 do not apply 

under the corresponding religious 

exemptions. For example, an 

anonymous commenter suggested that 

OFCCP clarify that religious 

organizations are permitted to 

discriminate on the bases of sexual 

orientation and gender identity because, 

in the commenter’s view, an action that 

falls within the religious exemption 

would be outside the bounds of Title VII 

and E.O. 11246, ‘‘regardless of whether 

it would otherwise be prohibited by 

other provisions.’’ Other supportive 

commenters offered a similar view, 

stating that the proposed definition 

provided helpful clarification. For 

example, a religious liberties legal 

organization criticized ‘‘the suggestion 

from the Obama administration’’ that 

the exemption should be limited to 

‘‘religious people cannot be 

discriminatory for hiring only members 

of their own religion’’ rather than ‘‘nondiscrimination law does not apply in 

religious contexts’’ as provided under 


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21See Office of the Att’y Gen., Memorandum for 

All Executive Departments and Agencies: Federal 

Law Protections for Religious Liberty 1–2 (Oct. 6, 

2017). 

22See below for a more fulsome discussion of 

how courts have determined the applicability of the 

religious exemption. 

23This is separate from the question of whether 

application of Title VII in any particular instance 

is tolerable under the First Amendment or other 

law, such as where the employee is a minister, see 

Our Lady of Guadalupe, 140 S. Ct. 2049, or where 

the employment relationship is otherwise ‘‘so 

pervasively religious’’ that it raises First 

Amendment concerns, see DeMarco v. Holy Cross 

High Sch., 4 F.3d 166, 172 (2d Cir. 1993). 

the Civil Rights Act, and praised the 

proposed rule for affirming that 

requiring adherence to an employer’s 

religious tenets does not constitute 

discrimination. Similarly, a U.S. Senator 

commented that the proposed helpfully 

clarifies that religious employers that 

contract with the federal government 

retain the right to hire employees that 

support their religious mission, 

consistent with Title VII. Some 

supportive commenters also noted that 

the proposed definition was consistent 

with the First Amendment and Title VII 

case law. For example, a religious legal 

association and an association of 

evangelical churches and schools 

commented that the principle that 

religious employers should be allowed 

to require their employees to conduct 

themselves in accordance with the 

employers’ code of moral conduct has 

been ‘‘almost universally’’ accepted by 

courts, who have relied alternatively on 

Section 702(a) of Title VII, the First 

Amendment’s Religion Clauses, and 

other considerations recognizing that 

‘‘religious organizations may have 

legitimate, nondiscriminatory reasons’’ 

for practicing their religious beliefs 

through employment decisions. 

In a joint comment, a religious legal 

association and an association of 

evangelical churches and schools 

commented that Section 204(c) of E.O. 

11246 should be construed to exempt 

religious organizations from the 

nondiscrimination mandates of Section 

202, except to the extent that a religious 

organization’s employment decision is 

based on race. 

To address these comments, OFCCP 

here first discusses the applicable Title 

VII principles established by case law, 

including how those principles may 

apply where religious organizations 

maintain sincerely held beliefs 

regarding matters such as marriage and 

intimacy, which may implicate 

protected classes under E.O. 11246. 

OFCCP then discusses its recognition 

that religious organizations in 

appropriate circumstances will be 

entitled to relief under the Religious 

Freedom Restoration Act. 

The public should bear in mind that 

this discussion is restricted solely to 

these difficult and sensitive questions 

raised by commenters. This rule does 

not affect the overwhelming majority of 

federal contractors and subcontractors, 

which are not religious, and OFCCP 

remains fully committed to enforcing all 

E.O. 11246 nondiscrimination 

requirements, including those 

protecting employees from 

discrimination on the bases of sexual 

orientation and gender identity. Even 

for religious organizations that serve as 

government contractors or 

subcontractors, they too must comply 

with all of E.O. 11246’s 

nondiscrimination requirements except 

in some narrow respects under some 

reasonable circumstances recognized by 

law. This rule provides clarity on those 

circumstances, consistent with OFCCP’s 

obligations and desire to also respect 

and accommodate the free exercise of 

religion. 

ii. Legal Principles 

OFCCP acknowledges first and 

foremost the United States’ deeply 

rooted tradition of respect for religion 

and religious institutions. Religious 

individuals and organizations operate 

within and contribute to civil society 

and do not relinquish their religious 

freedom protections when they 

participate in the public square.21

With respect to commenters’ concerns 

and questions here, many relate to the 

interaction of two well-established Title 

VII principles: First, that religious 

organizations can take religion into 

account when making employment 

decisions; and second, that religious 

organizations cannot discriminate on 

other protected bases. Each of those two 

principles taken by itself has clear 

answers. Where an employment 

decision made on the basis of religion 

also implicates another protected basis, 

however, the law is less clear. 

As to the first principle, virtually all 

commenters agreed with what the plain 

text of the exemption provides: That 

religious organizations can consider an 

employee’s particular religion when 

taking employment action. As discussed 

elsewhere in this rule’s preamble, 

commenters disagreed as to the scope of 

that exemption—which employees it 

applies to, and which employer 

actions—but the basic principle was not 

disputed. 

As to the second principle, as many 

commenters recognized, E.O. 11246’s 

other employment protections apply to 

religious organizations. Protections on 

the basis of race, color, sex, sexual 

orientation, gender identity, and 

national origin do not categorically 

disappear when the employer is a 

religious organization. Thus the 

religious exemption does not permit 

religious organizations to engage in 

prohibited discrimination when there is 

no religious basis for the action. For 

instance, a religious organization that 

declined to promote a non-ministerial 

employee not for religious reasons, but 

because of animus borne of the 

employee’s country of birth or skin 

color, would violate E.O. 11246. Courts 

in the Title VII context have engaged in 

careful, fact-bound inquiries to 

determine whether a religious 

organization’s action was based on 

religion or instead on a prohibited 

basis.22 For instance, courts may inquire 

whether a plaintiff was subjected to 

adverse employment action because of 

his or her sex or because of a violation 

of religious tenets. See, e.g., Cline v. 

Catholic Diocese of Toledo, 206 F.3d 

651, 655–56, 658 (6th Cir. 2000); cf. 

EEOC v. Miss. Coll., 626 F.2d 477, 485– 

86 (5th Cir. 1980) (holding if religious 

organization shows that its decision was 

based on religion, the religious 

exemption prohibits a further inquiry 

into pretext). To that extent, courts are 

virtually uniform in the view that the 

religious exemption does not permit 

discrimination on bases other than 

religion.23

The question posed here, however, is 

the interaction of those two principles: 

Specifically, the outcome when a 

religion organization’s action is based 

on and motivated by the employee’s 

adherence to religious tenets yet 

implicates another category protected by 

E.O. 11246. OFCCP concludes, as 

explained in detail below, that the 

religious exemption itself, as interpreted 

by the courts, has left the question open, 

but that such activity would also give 

rise to an inquiry under RFRA, which 

must be assessed based on applicable 

case law and the specific facts 

presented. 

At the federal appellate court level, 

the question of the religious 

exemption’s interaction with other 

protected bases was left open in, for 

instance, EEOC v. Mississippi College, 

where an EEOC subpoena did ‘‘not 

clearly implicate any religious practices 

of the College.’’ 626 F.2d at 487. The 

court noted that the college had a 

scripturally rooted policy of hiring only 

men to teach courses in religion, but 

stated that ‘‘[b]efore the EEOC could 

require the College to alter that practice, 

the College would have an opportunity 

to litigate in a federal forum whether 

[the religious exemption] exempts or the 

first amendment protects that particular 


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24As explained elsewhere in this preamble, the 

religious exemption is more than a mere hiring 

preference for coreligionists. OFCCP nonetheless 

agrees that the policy in Fremont would not be 

covered by the religious exemption because it did 

not pertain to the employee’s particular religion. 

Nothing about the employee’s religious beliefs or 

conduct would affect the policy—only his or her 

sex. 

25RFRA was not raised before the Court in 

Bostock. Thus, the Court left that ‘‘question[ ] for 

future cases.’’ 140 S. Ct. at 1754. 

practice.’’ Id. The Seventh Circuit has 

similarly characterized the question of 

whether ‘‘the religious-employer 

exemptions in Title VII [are] applicable 

only to claims of religious 

discrimination’’ as ‘‘a question of first 

impression in this circuit.’’ Herx v. 

Diocese of Fort Wayne-South Bend, Inc., 

772 F.3d 1085, 1087 (7th Cir. 2014). 

Other courts have indicated that the 

religious exemption may be preeminent 

in such a situation. See Little, 929 F.2d 

at 951 (‘‘[T]he permission to employ 

persons ‘of a particular religion’ 

includes permission to employ only 

persons whose beliefs and conduct are 

consistent with the employer’s religious 

precepts.’’); see also Kennedy, 657 F.3d 

at 194 (‘‘Congress intended the explicit 

exemptions to Title VII to enable 

religious organizations to create and 

maintain communities composed solely 

of individuals faithful to their doctrinal 

practices.’’ (quoting Little, 929 F.2d at 

951)). 

The only two federal appellate-level 

cases with fact patterns involving the 

precise issue are a pair of Ninth Circuit 

cases from the 1980s. The first, EEOC v. 

Pacific Press Publishing Association, 

held as a statutory matter that Title VII’s 

prohibitions on sex discrimination and 

on retaliation applied to a religious 

organization. See 676 F.2d 1272, 1277 

(9th Cir. 1982). But the court 

determined that the practice at issue 

that resulted in sex discrimination 

‘‘does not and could not conflict with 

[the employer’s] religious doctrines, nor 

does it prohibit an activity rooted in 

religious belief.’’ Id. at 1279. Regarding 

retaliation, the court held as a 

constitutional matter that Title VII’s 

anti-retaliation provision should apply 

to the religious organization even when 

the employee was dismissed for 

violating church doctrine that 

prohibited members from bringing 

lawsuits against the church. See id. at 

1280. 

The second decision, EEOC v. 

Fremont Christian School, 781 F.2d 

1362 (9th Cir. 1986), is less instructive. 

It held in relevant part that Title VII 

could be applied to prohibit a 

religiously grounded health benefits 

program that benefited one sex more 

than the other. However, as a statutory 

matter, the court held that the religious 

exemption was not implicated because 

the employment practice did not 

concern the selection of employees 

based on their religion—the text of the 

exemption refers to ‘‘employment of 

individuals of a particular religion’’ 24— 

and as a constitutional matter noted that 

‘‘[e]liminating the employment policy 

involved here would not interfere with 

religious belief and only minimally, if at 

all, with the practice of religion.’’ Id. at 

1366, 1368. 

The Supreme Court also has not 

answered whether an employment 

action motivated by religion but 

implicating a protected classification 

violates Title VII. The Court’s cases offer 

no clear conclusion whether the 

religious exemption should be read so 

narrowly that its protections are 

overcome by the rest of E.O. 11246’s (or 

Title VII’s) protections when they are 

both at issue. For example, in Bostock 

v. Clayton County, 140 S. Ct. 1731 

(2020), the Court held that Title VII’s 

prohibition on discrimination because 

of sex includes discrimination on the 

basis of sexual orientation and 

transgender status. That holding itself is 

not particularly germane to OFCCP’s 

enforcement of E.O. 11246, which has 

expressly protected sexual orientation 

and gender identity since 2015. What is 

certainly germane is the Court’s 

recognition of the ‘‘fear that complying 

with Title VII’s requirement in cases 

like [Bostock] may require some 

employers to violate their religious 

convictions’’ and its assurance that it, 

too, was ‘‘deeply concerned with 

preserving the promise of the free 

exercise of religion enshrined in our 

Constitution; that guarantee lies at the 

heart of our pluralistic society.’’ Id. at 

1753–54. The Court then noted that 

Title VII contains ‘‘an express statutory 

exception for religious organizations,’’ 

but did not explain whether an 

employment action motivated by 

religion that implicates a protected 

classification violates Title VII. Id. at 

1754. 

Regardless, OFCCP ultimately does 

not need to answer this open question 

on the proper interpretation of the 

religious exemption in E.O. 11246, and 

declines to do so, because RFRA can 

guide the agency’s determination if and 

when a particular case presents a 

situation where a religiously motivated 

employment action implicates a 

classification protected under the 

Executive Order. As noted in Bostock, 

RFRA ‘‘prohibits the federal government 

from substantially burdening a person’s 

exercise of religion unless it 

demonstrates that doing so both furthers 

a compelling governmental interest and 

represents the least restrictive means of 

furthering that interest. [42 U.S.C.] 

§ 2000bb–1.’’ Id. Moreover, ‘‘[b]ecause 

RFRA operates as a kind of super 

statute, displacing the normal operation 

of other federal laws, it might supersede 

Title VII’s commands in appropriate 

cases. [42 U.S.C.] § 2000bb–3.’’ Id.25

Concerns raised by supportive 

commenters in this rulemaking have 

alerted the agency that application of 

E.O. 11246 may substantially burden 

their religious exercise, especially if the 

religious exemption does not clearly 

protect their ability to maintain 

employees faithful to their practices and 

beliefs. The ministerial exception offers 

religious organizations broad freedom in 

the selection of ministers, but that is 

only a subset of their employees. See 

generally Our Lady of Guadalupe, 140 

S. Ct. 2049. In contrast, the religious 

exemption applies to all of a religious 

organization’s employees, but the scope 

of its protections is not settled when 

religious tenets implicate other 

protected classes. Thus, the Department 

should consider RFRA, since in some 

circumstances neither the ministerial 

exception nor the religious exemption 

may alleviate E.O. 11246’s burden on 

religious exercise. See Little Sisters of 

the Poor, 140 S. Ct. at 2383–84 (holding 

agencies should consider RFRA when it 

is an important aspect of the problem 

involved in the rulemaking). 

The discussion below addresses in 

general terms how OFCCP views its 

obligations under RFRA in the specific 

situation raised by commenters and 

addressed here: Where the religious 

organization takes employment action 

regarding an applicant or an employee, 

the employment action is motivated 

solely on the employee’s adherence to a 

sincere religious tenet, yet that tenet 

also implicates an E.O. 11246 protected 

category other than race (which is 

discussed separately). RFRA requires a 

fact-specific analysis, so the discussion 

here of necessity can speak only to 

OFCCP’s general approach; specific 

situations involving specific parties will 

require consideration of any additional, 

unique facts. And of course the 

contractor or subcontractor involved 

will need to demonstrate its religious 

sincerity and burden so that it falls 

within this rubric. Nonetheless, OFCCP 

believes its RFRA analysis here will 

provide clarity for religious contractors 

and subcontractors, regardless of how 

future cases may interpret the interplay 

of the religious exemption in and of 

itself with other protected classes under 

Title VII or E.O. 11246. 


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26Case law is clear that RFRA’s substantial 

burden test does not insist that a challenged 

government action require an objecting party to 

violate its religious beliefs. Instead, substantial 

pressure on a party to modify its religiously 

motivated practice is also sufficient to establish a 

substantial burden. See, e.g., Archdiocese of Wash. 

v. Wash. Metro. Area Transit Auth., 897 F.3d 314, 

333 (D.C. Cir. 2018) (defining ‘‘substantial burden’’ 

under RFRA as ‘‘substantial pressure on an 

adherent to modify his behavior and to violate his 

beliefs’’) (quoting Thomas v. Review Bd., 450 U.S. 

707, 718 (1981)); EEOC v. Catholic Univ. of Am., 

83 F.3d 455, 467 (D.C. Cir. 1996) (finding that 

government’s interest in eliminating employment 

discrimination at Catholic university was 

outweighed by university’s right of autonomy in its 

own domain); Jolly v. Coughlin, 76 F.3d 468, 477 

(2d Cir. 1996) (finding that right to free exercise of 

religion is ‘‘substantially burdened’’ within 

meaning of RFRA where state puts substantial 

pressure on adherent to modify his behavior and to 

violate his beliefs); In re Young, 82 F.3d 1407, 1418 

(8th Cir. 1996) (‘‘[D]efining substantial burden 

broadly to include religiously motivated as well as 

religiously compelled conduct is consistent with 

the RFRA’s purpose to restore pre-Smith free 

exercise case law.’’). 

iii. Application of the Religious 

Freedom Restoration Act 

‘‘Congress enacted RFRA in 1993 in 

order to provide very broad protection 

of religious liberty.’’ Hobby Lobby, 573 

U.S. at 693. RFRA responded to 

‘‘Employment Division v. Smith, 494 

U.S. 872 (1990) [in which] the Supreme 

Court virtually eliminated the 

requirement that the government justify 

burdens on religious exercise imposed 

by laws neutral toward religion’’ under 

the First Amendment, and restored by 

statute ‘‘the compelling interest test as 

set forth in Sherbert v. Verner, 374 U.S. 

398 (1963) and Wisconsin v. Yoder, 406 

U.S. 205 (1972).’’ 42 U.S.C. 

2000bb(a)(4), (b)(1); see Hobby Lobby, 

573 U.S. at 693–95. 

Under RFRA, the federal government 

may not ‘‘substantially burden a 

person’s exercise of religion.’’ 42 U.S.C. 

2000bb–1(a). Government is excepted 

from this requirement only if it 

‘‘demonstrates that application of the 

burden to the person—(1) is in 

furtherance of a compelling 

governmental interest; and (2) is the 

least restrictive means of furthering that 

compelling government interest.’’ Id. 

2000bb–1(b). 

RFRA ‘‘applies to all Federal law, and 

the implementation of that law, whether 

statutory or otherwise, and whether 

adopted before or after November 16, 

1993,’’ Id. 2000bb–3(a), including 

agency regulations, see Little Sisters of 

the Poor, 140 S. Ct. at 2383. As ‘‘Federal 

law, and the implementation of that 

law,’’ E.O. 11246 fits within that scope 

as well. 

(1) Substantial Burden 

The question of whether government 

action substantially burdens an 

employer’s exercise of religion can be 

separated into two parts. See Hobby 

Lobby, 573 U.S. at 720–26; Little Sisters 

of the Poor, 140 S. Ct. at 2389 (Alito, J., 

concurring). First, the government must 

ask whether the consequences of 

noncompliance put substantial pressure 

on the objecting party to comply. See 

Hobby Lobby, 573 U.S. at 720–23. 

Second, the government must ask 

whether compliance with the regulation 

would violate or modify the objecting 

party’s sincerely-held religious exercise 

(as the objecting party understands that 

exercise and any underlying beliefs), 

including the party’s ‘‘ability . . . to 

conduct business in accordance with 

[its] religious beliefs.’’ Hobby Lobby, 573 

U.S. at 724; see also Sherbert, 374 U.S. 

at 405–06.26 If the answer to both 

questions is yes, then the regulation 

substantially burdens the exercise of 

religion. 

On the first question, noncompliance 

with the nondiscrimination 

requirements of E.O. 11246 could have 

substantial adverse consequences on 

religious organizations that participate 

in government contracting. One private 

religious university supportive of the 

proposed rule stated that it is ‘‘a large 

research university with dozens of 

active federal contracts at any given 

time,’’ while another stated that 

‘‘religious organizations have long been 

significant participants in federal 

procurement programs.’’ 

Noncompliance with E.O. 11246 can 

result in awards of back pay and other 

make-whole relief to affected employees 

and applicants, cancellation or 

suspension of the contract, and even 

suspension or debarment. See E.O. 

11246 § 202(7); 41 CFR 60–1.26. That is 

substantial pressure. Indeed, it is a 

substantial burden for the government 

to compel someone ‘‘to choose between 

the exercise of a First Amendment right 

and participation in an otherwise 

available public program.’’ Thomas, 450 

U.S. at 716; Sherbert, 374 U.S. at 404 

(‘‘It is too late in the day to doubt that 

the liberties of religion and expression 

may be infringed by the denial of or 

placing of conditions upon a benefit or 

privilege.’’). ‘‘Governmental imposition 

of such a choice puts the same kind of 

burden upon the free exercise of religion 

as would a fine imposed’’ for engaging 

in religious action. Sherbert, 374 U.S. at 

404. ‘‘Where the state conditions receipt 

of an important benefit upon conduct 

proscribed by a religious faith, or where 

it denies such a benefit because of 

conduct mandated by religious belief, 

thereby putting substantial pressure on 

an adherent to modify his behavior and 

to violate his beliefs, a burden upon 

religion exists. While the compulsion 

may be indirect, the infringement upon 

free exercise is nonetheless 

substantial.’’). Thomas, 450 U.S. at 717– 

18. 

On the second question, the Supreme 

Court emphasized in Hobby Lobby that, 

in determining whether compliance 

with a particular mandate would 

substantially burden the objecting 

party’s ability to operate in accordance 

with its religious beliefs, the federal 

government must ‘‘not presume to 

determine the plausibility of a religious 

claim.’’ Hobby Lobby, 573 U.S. at 724 

(quoting Smith, 494 U.S. at 887). It is 

not for a court, or for OFCCP, to say 

whether a particular set of religious 

beliefs is ‘‘mistaken or insubstantial.’’ 

Hobby Lobby, 573 U.S. at 725. 

Furthermore, religious exercise means 

more than being able to express 

particular views—a right to freedom of 

religion requires the right to act in 

conformance with that religion. See 

Espinoza, 140 S. Ct. at 2277 (Gorsuch, 

J., concurring) (‘‘The right to be religious 

without the right to do religious things 

would hardly amount to a right at all.’’). 

It is this right to engage in conduct 

consistent with sincerely held belief— 

and a right to be free of demands to 

engage in conduct conflicting with those 

sincerely held beliefs—that RFRA 

protects. See Little Sisters of the Poor, 

140 S. Ct. at 2390. 

Compliance with the 

nondiscrimination provisions in E.O. 

11246, if interpreted to apply when an 

employment action is motivated by 

religion yet also implicates a protected 

classification, could force religious 

organizations to violate their sincerely 

held religious beliefs or to compromise 

their religious integrity or mission by 

placing substantial pressure on them to 

violate or modify their religious tenets 

related to their employees and their 

religious communities. The comments 

on the proposed rule made this clear. 

For example, a private religious 

university noted the importance for 

religious employers to be able to 

‘‘employ[ ] persons whose beliefs and 

conduct are consistent with [their] 

religious precepts.’’ Similarly, a 

nationwide ecclesiastical organization 

stated in its comment that faith-based 

organizations should be able to 

‘‘lawfully prefer for employment those 

who, by word and conduct, accept and 

adhere to that faith as the organization 

understands it, regardless of the 

applicant’s or employee’s religious 

affiliation.’’ An association of religious 

universities echoed these sentiments, 

stating that ‘‘[o]ur schools are 

committed to upholding their religionbased standards by aligning 


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27Amos also implicated such facts. The appellee 

had been discharged for failing to ‘‘qualify for a 

temple recommend, that is, a certificate that he is 

a member of the Church and eligible to attend its 

temples,’’ which ‘‘are issued only to individuals 

who observe the Church’s standards in such matters 

as regular church attendance, tithing, and 

abstinence from coffee, tea, alcohol, and tobacco.’’ 

Amos, 483 U.S. at 330 & n.4. The plaintiffs below 

had alleged that those standards necessitated 

employer inquiries into their ‘‘sexual activities’’ 

and ‘‘moral cleanliness and purity.’’ Amos, 594 F. 

Supp. at 830. 

employment expectations exclusively 

with applicants and employees who 

concur with these expectations. These 

expectations are essential to fulfilling 

our religious mission.’’ While the 

commenter explained that generally its 

associated ‘‘schools do not accept direct 

government funding,’’ it highlighted the 

importance for its members that ‘‘no 

organization should be excluded by the 

government from competing for 

contracts or other funds simply because 

the religious organization is serious 

about maintaining its religious identity 

and religious practices.’’ 

The case law also indicates that 

certain E.O. 11246 obligations may 

impose a burden on religious 

organizations. Bostock expressly 

acknowledged that enforcing certain 

nondiscrimination provisions could 

pose challenges for religious employers 

under RFRA. See 140 S. Ct. at 1754. 

And many cases show instances of 

religious employers seeking to apply 

religiously inspired codes of conduct 

that pertain to matters of marriage and 

sexual intimacy. See Little, 929 F.2d at 

946 (upholding termination of employee 

for violations of ‘‘Cardinal’s Clause,’’ 

which included ‘‘entry by the teacher 

into a marriage which is not recognized 

by the Catholic Church’’ (emphasis in 

original)); Cline, 206 F.3d at 666 

(holding fact issue remained as to 

whether plaintiff was terminated for 

pregnancy or for whether she had 

‘‘violated her clear duties as a teacher by 

engaging in premarital sex’’); Boyd v. 

Harding Acad. of Memphis, Inc., 88 

F.3d 410, 414 (6th Cir. 1996) (upholding 

district court’s determination that the 

defendant ‘‘articulated a legitimate, nondiscriminatory reason for plaintiff’s 

termination when it stated that plaintiff 

was fired not for being pregnant, but for 

having sex outside of marriage in 

violation of Harding’s code of conduct’’ 

and rejecting claim of pretext when 

school’s president ‘‘had terminated at 

least four individuals, both male and 

female, who had engaged in extramarital 

sexual relationships that did not result 

in pregnancy’’); Gosche v. Calvert High 

Sch., 997 F. Supp. 867, 872 (N.D. Ohio 

1998) (dismissing Title VII claim of 

plaintiff fired for having affair and 

concluding that ‘‘[w]hatever Plaintiff’s 

own post-hoc claims may be regarding 

the relevance of her sexual conduct to 

her employment at a Catholic school, it 

is clear that the Diocese and Parish 

considered her sexual conduct to be 

relevant to her employment’’); Ganzy v. 

Allen Christian Sch., 995 F. Supp. 340, 

359–60 (E.D.N.Y. 1998) (noting in case 

with similar facts and holding as Cline 

that ‘‘[r]eligious institutions . . . are 

provided leeway under federal 

constitutional and statutory law in 

regulating the sexual conduct of those in 

their employ in keeping with their 

religious views’’); Dolter v. Wahlert 

High Sch., 483 F. Supp. 266, 270 (N.D. 

Iowa 1980) (‘‘Nor does the court quarrel 

with defendant’s contention that it can 

define moral precepts and prescribe a 

code of moral conduct that its teachers 

. . . must follow.’’).27

Of particular concern here as well is 

that ‘‘[f]ear of potential liability might 

affect the way an organization carried 

out what it understood to be its religious 

mission.’’ Amos, 483 U.S. at 336; cf. 

Hosanna-Tabor, 565 U.S. at 197 

(Thomas, J., concurring) (‘‘[U]ncertainty 

about whether its ministerial 

designation will be rejected, and a 

corresponding fear of liability, may 

cause a religious group to conform its 

beliefs and practices regarding 

‘ministers’ to the prevailing secular 

understanding.’’). Here, out of fear of 

violating E.O. 11246’s requirements, a 

religious organization might simply 

choose to forsake certain of its religious 

tenets related to employment. That is a 

religious burden in itself. And that 

change could in turn result in the 

organization hiring and retaining 

employees who, by word or deed, 

undermine the religious organization’s 

character and purpose—but which the 

organization would feel compelled to 

accept rather than risk liability. That is 

a second religious burden, which in 

particular may pose a risk to smaller or 

nontraditional religious groups. Cf. 

Hosanna-Tabor, 565 U.S. at 197 

(Thomas, J., concurring) (noting that a 

bright-line test or multifactor analysis 

for the definition of ‘‘minister’’ ‘‘risk[s] 

disadvantaging those religious groups 

whose beliefs, practices, and 

membership are outside of the 

‘mainstream’ or unpalatable to some,’’ 

including by ‘‘caus[ing] a religious 

group to conform its beliefs and 

practices regarding ‘ministers’ to the 

prevailing secular understanding’’). 

Alternatively, to avoid this problem, 

the religious organization might 

consider drawing stricter lines around 

those it considers ‘‘coreligionists,’’ for 

even the narrowest reading of the 

religious exemption permits religious 

organizations to prefer ‘‘coreligionists’’ 

in employment decisions. In that case, 

religious organizations would draw 

strict lines by stating that certain 

behaviors, beliefs, or statements are 

anathema to the religion and take one 

outside the religious community. That 

way, employment action would be more 

readily identified as resting solely on 

religious grounds as a preference against 

a non-coreligionist. See Mississippi 

College, 626 F.2d at 484–85; cf. Amos, 

483 U.S. at 343 (Brennan, J., concurring) 

(‘‘A religious organization therefore 

would have an incentive to characterize 

as religious only those activities about 

which there likely would be no dispute, 

even if it genuinely believe that 

religious commitment was important in 

performing other tasks as well.’’). Here, 

the religious burden would be 

government pressure on how the 

religious organization defines who is 

and who is not a member of its religious 

community. 

Demonstrating burden is necessarily 

fact-dependent. There may be instances 

where the organization sincerely 

believes as a religious matter that it can 

tolerate some kinds of religious 

noncompliance from some of its 

employees without seriously 

compromising its religious mission or 

identity. That may be the case especially 

for employees in less prominent roles or 

who have little interaction with 

students or the public. But there may be 

other instances where, in the sincere 

view of the organization, a nonministerial employee must adhere to the 

organization’s religious tenets as an 

important part of furthering the 

organization’s religious mission and 

maintaining its religious identity, and 

where strict enforcement of certain E.O. 

11246 requirements would substantially 

burden those aims. 

(2) Compelling Interest 

Many courts have recognized the 

importance of the government’s interest 

in enforcing Title VII’s 

nondiscrimination provisions. See, e.g., 

Rayburn, 772 F.2d at 1169; Pacific 

Press, 676 F.2d at 1280. The following 

RFRA analysis does not address 

OFCCP’s enforcement program broadly, 

including the context of a religious 

organization’s discriminating on the 

basis of a protected characteristic other 

than religion for non-religious reasons. 

OFCCP will continue to fully enforce 

E.O. 11246’s requirements in those 

contexts. Rather, the compelling-interest 

analysis here focuses solely on the 

questions raised by commenters 

regarding a situation in which a 

religious organization takes employment 


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28OFCCP, ‘‘Coronavirus National Interest 

Exemption Frequently Asked Questions,’’ Question 

#12, https://www.dol.gov/agencies/ofccp/faqs/ 

covid-19#Q12. 

action based solely on sincerely held 

religious tenets that also implicate a 

protected classification. 

To satisfy RFRA, OFCCP must do 

more than assert a generalized 

compelling interest on a ‘‘categorical’’ 

basis. O Centro, 546 U.S. at 431. Instead, 

‘‘RFRA requires the Government to 

demonstrate that the compelling interest 

test is satisfied through application of 

the challenged law ‘to the person’—the 

particular claimant whose sincere 

exercise of religion is being 

substantially burdened.’’ Id. at 430–31 

(quoting 42 U.S.C. 2000bb–1(b)). This 

requires ‘‘look[ing] beyond broadly 

formulated interests justifying the 

general applicability of government 

mandates and scrutiniz[ing] the asserted 

harm of granting specific exemptions to 

particular religious claimants.’’ Id. at 

431. 

Thus OFCCP must demonstrate that it 

has a compelling governmental interest 

in enforcing a nondiscrimination 

requirement against ‘‘particular 

religious claimants’’ (e.g., particular 

contractors who qualify for the religious 

exemption) when doing so places a 

substantial burden on the ability of 

those particular contractors to freely 

exercise their religion. Id. This statutory 

requirement is reflected in OFCCP’s 

current RFRA policy, under which 

‘‘OFCCP will consider’’ a contractor’s 

request for ‘‘an exemption to E.O. 11246 

pursuant to RFRA . . . based on the 

facts of the particular case.’’ OFCCP, 

Religious Employers and Religious 

Exemption, www.dol.gov/agencies/ 

ofccp/faqs/religious-employersexemption. As explained below, OFCCP 

has determined on the basis of several 

independent reasons that it has less 

than a compelling interest in enforcing 

nondiscrimination requirements— 

except for protections on the basis of 

race—when enforcement would 

seriously infringe the religious mission 

or identity of a religious organization. 

Exceptions provided other 

contractors. OFCCP’s general interest in 

enforcing E.O. 11246 is less than 

compelling in the religious context 

addressed here, given the numerous 

exceptions from its nondiscrimination 

requirements it has authority to grant, 

and has granted, in nonreligious 

contexts. Granting accommodations in 

nonreligious contexts strongly suggests 

that OFCCP does not have a compelling 

interest in disfavoring religious 

contractors by refusing to grant 

accommodations in religious contexts. 

See O Centro, 546 U.S. at 436 (‘‘RFRA 

operates by mandating consideration, 

under the compelling interest test, of 

exceptions to ‘rule[s] of general 

applicability.’ ’’ (quoting 42 U.S.C. 

2000bb–1(a))). When ‘‘[t]he proffered 

objectives are not pursued with respect 

to analogous nonreligious conduct,’’ 

those exceptions suggest that ‘‘those 

interests could be achieved by narrower 

ordinances that burdened religion to a 

far lesser degree.’’ Holt, 574 U.S. at 367. 

The President has granted OFCCP 

broad authority and discretion to 

exempt contracts from the requirements 

of E.O. 11246. Most prominent is 

section 204(a) of E.O. 11246, which 

authorizes the Secretary of Labor to 

grant exemptions from any or all of the 

equal opportunity clause’s requirements 

‘‘when the Secretary deems that special 

circumstances in the national interest so 

require.’’ This is not the kind of 

language government typically uses 

when it seeks a policy of absolute 

enforcement. Rather, it is the kind of 

language government uses when 

granting highly discretionary power. Cf. 

Webster v. Doe, 486 U.S. 592, 600 (1988) 

(removing an employee ‘‘whenever the 

Director ‘shall deem such termination 

necessary or advisable in the interests of 

the United States’ ’’ is a standard that 

‘‘fairly exudes deference to the Director’’ 

(quoting National Security Act § 102(c)). 

The Executive Order contains many 

other exceptions as well. Section 204(b) 

authorizes the Secretary to exempt 

contracts that are to be performed 

outside the United States, contracts that 

are for standard commercial supplies or 

raw materials, contracts that do not 

meet certain thresholds (dollar amounts 

or numbers of employees), and 

subcontracts below a specified tier. 

Section 204(d) authorizes the Secretary 

to exempt a contractor’s facilities that 

are separate and distinct from activities 

related to the performance of the 

contract, as long as ‘‘such an exemption 

will not interfere with or impede the 

effectuation of the purposes of this 

Order.’’ OFCCP’s implementing 

regulations contain exemptions as well. 

OFCCP has implemented section 204(b) 

to the maximum extent possible by 

exempting all contracts and 

subcontracts for work performed outside 

the United States by employees not 

recruited in the United States. See 41 

CFR 60–1.5(3). OFCCP’s regulations also 

contain a religious exemption for 

religious educational institutions and 

permit a preference for ‘‘Indians living 

on or near an Indian reservation in 

connection with employment 

opportunities on or near an Indian 

reservation.’’ 41 CFR 60–1.5(6)–(7). 

On several occasions OFCCP has used 

its power to exempt contracts ‘‘in the 

national interest.’’ ‘‘Prior 

administrations granted [national 

interest exemptions] for Hurricanes 

Sandy and Katrina,’’ 28 and OFCCP has 

granted temporary exemptions from 

some E.O. 11246 requirements in 

response to more recent national 

disasters. OFCCP has similarly granted 

an exemption during the COVID–19 

pandemic. See OFCCP, National Interest 

Exemptions, https://www.dol.gov/ 

agencies/ofccp/national-interestexemption. And the National Interest 

Exemptions that OFCCP has granted can 

be quite broad, applying, for example, to 

all new contracts providing coronavirus 

relief during the applicable time period. 

See OFCCP, Coronavirus National 

Interest Exemption Frequently Asked 

Questions, https://www.dol.gov/ 

agencies/ofccp/faqs/covid-19#Q1. 

OFCCP has also issued a final rule 

effecting a permanent exemption from 

all OFCCP authority for healthcare 

providers that participate in the 

TRICARE program and have no 

otherwise covered contracts. The final 

rule expressed OFCCP’s view that a 

2011 statute removed whatever 

authority OFCCP may have had over 

TRICARE providers and did not replace 

it with a separate nondiscrimination 

provision; Congress’ action indicates 

that OFCCP’s interest is less than 

compelling interest. See 85 FR 39834, 

39837–39 (July 2, 2020). Additionally, 

the final rule exempted TRICARE 

providers on the alternative ground of a 

national interest exemption, citing its 

concern that ‘‘the prospect of exercising 

authority over TRICARE providers is 

affecting or will affect the government’s 

ability to provide health care to 

uniformed service members, veterans, 

and their families,’’ a determination that 

‘‘pursuing enforcement efforts against 

TRICARE providers is not the best use 

of its resources’’ given a history of 

litigation and legal uncertainty in the 

area, and the need to ‘‘provide 

uniformity and certainty in the health 

care community with regard to legal 

obligations concerning participation in 

TRICARE.’’ Id. at 39839. 

The various exemptions that OFCCP 

can and does provide in secular settings 

show that its interest in enforcing E.O. 

11246’s requirements can give way to 

other considerations. Many of those 

same considerations exist here, so 

OFCCP’s enforcement interest should 

similarly give way to religious 

accommodation. For example, many of 

the same reasons underlying OFCCP’s 

exemption for TRICARE providers apply 

here as well: Conservation of resources 

in an area that could lead to protracted 


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litigation; the need to bring clarity to a 

group of potential contractors under a 

cloud of legal uncertainty; and a goal of 

improving the government’s access to 

certain services. In the TRICARE rule, 

the goal was to foster access to care for 

veterans and their families. In this rule, 

it is the goal of fostering the equal 

participation of religious organizations 

in government contracting and 

subcontracting in order to increase the 

contracting pool’s competition and 

diversity and thus improve economy 

and efficiency in procurement. Likewise 

OFCCP’s limited exemptions during 

emergencies and the pandemic 

demonstrate the agency’s judgment that 

securing services for the government 

can override aspects of E.O. 11246’s 

obligations. Here, too, a limited 

religious accommodation may 

encourage religious organizations to 

begin or continue participating in 

government contracting and 

subcontracting. And like those other 

exemptions, a religious accommodation 

here would be limited. It would be 

limited to employment action grounded 

in a sincere religious belief with respect 

to the employee’s religion. It would not 

excuse religious organizations from 

their antidiscrimination obligations 

otherwise and never on the basis of race, 

nor from their affirmative-action 

obligations, reporting requirements, or 

other requirements under E.O. 11246. 

E.O. 11246’s many available 

exemptions, and OFCCP’s history of 

recognizing exemptions, also undercuts 

the idea that individualized religious 

exemptions would undermine the 

agency’s overall enforcement of E.O. 

11246 or that their denial would be 

equitable to religious organizations. See 

Holt, 574 U.S. at 368 (‘‘At bottom, this 

argument is but another formulation of 

the ‘classic rejoinder . . . : If I make an 

exception for you, I’ll have to make one 

for everybody, so no exceptions.’ We 

have rejected a similar argument in 

analogous contexts, and we reject it 

again today.’’) (internal citations 

omitted) (quoting O Centro, 546 U.S. at 

436); Fraternal Order of Police Newark 

Lodge No. 12 v. City of Newark, 170 

F.3d 359, 365 (3d Cir. 1999) (‘‘[W]e 

conclude that the Department’s decision 

to provide medical exemptions while 

refusing religious exemptions is 

sufficiently suggestive of discriminatory 

intent so as to trigger heightened 

scrutiny.’’). 

Recognizing the value that religious 

contractors provide, OFCCP has 

determined that it has less than a 

compelling interest in enforcing E.O. 

11246 when a religious organization 

takes employment action solely on the 

basis of sincerely held religious tenets 

that also implicate a protected 

classification, other than race. OFCCP 

has determined that, in these 

circumstances, it should instead 

appropriately accommodate religion, 

especially when doing so (as with 

national interest exemptions) would 

foster a more competitive pool of 

government contractors. See Boyle v. 

United Techs. Corp., 487 U.S. 500, 506 

(1988) (noting that ‘‘the Federal 

Government’s interest in the 

procurement of equipment is 

implicated’’ where ‘‘[t]he imposition of 

liability on Government contractors’’ 

will cause the contractors to ‘‘decline to 

manufacture’’ a good or to ‘‘raise its 

price’’). 

Establishment Clause concerns. 

OFCCP’s interest in enforcing E.O. 

11246 is attenuated when doing so 

seriously risks violating the 

Establishment Clause. But as noted 

earlier, strict application of all E.O. 

11246 requirements to religious 

organizations could, in some instances, 

chill their protected religiously based 

requirements for employment out of fear 

of liability. It could also chill religious 

organizations from taking employment 

action despite an employee, by word or 

deed, undermining the religious 

organization’s tenets and purposes. 

Alternatively, it could incentivize 

religious organizations, because of the 

risk that the government might 

misunderstand the organization’s 

motivations, to draw stricter lines 

around who it considers a coreligionist. 

In this situation, the religious 

organization would first take some form 

of purely religious action against an 

employee to designate the employee as 

no longer a part of the religious 

community, and then take employment 

action, so that employment action 

would be more readily identified as 

resting solely on grounds of religious 

preference. And it poses a risk to 

smaller or nontraditional religious 

groups, whose membership practices 

may not be as readily understood by the 

government. Cf. Hosanna-Tabor, 565 

U.S. at 197 (Thomas, J., concurring). 

Such government pressure on 

religious organizations’ membership 

and doctrinal decisions would raise 

serious concerns under not only the 

Free Exercise Clause, but the 

Establishment Clause as well. ‘‘[T]he 

Religion Clauses protect the right of 

churches and other religious institutions 

to decide matters ‘of faith and doctrine’ 

without government intrusion. . . . 

[A]ny attempt by government to dictate 

or even to influence such matters would 

constitute one of the central attributes of 

an establishment of religion.’’ Our Lady 

of Guadalupe, 140 S. Ct. at 2060 

(emphasis added) (quoting HosannaTabor, 565 U.S. at 186 (opinion for the 

court)); see also Hosanna-Tabor, 565 

U.S. at 197 (Thomas, J., concurring) 

(‘‘These are certainly dangers that the 

First Amendment was designed to guard 

against.’’). In essence, such an approach 

could have the unfortunate consequence 

of pushing religious organizations to 

extremes to avoid liability. Religious 

organizations could do so either by 

forsaking their religiously based 

requirements for employment, or by 

engaging in more definitive religious 

actions to demonstrate their religious 

disassociation from someone who 

breaches a religiously based 

requirement for employment. OFCCP 

also has concerns about inter-religious 

discrimination, since some bona fide 

religious organizations require 

adherence to a common set of beliefs or 

tenets but do not have a formal 

membership structure, see World 

Vision, 633 F.3d at 728 (O’Scannlain, J., 

concurring), so they may have more 

difficulty than traditional churches in 

showing that an employee or applicant 

is not (or is no longer) a coreligionist. 

OFCCP cannot avoid this 

Establishment Clause problem by 

attempting to determine whether a 

religious organization’s decision to 

deem someone a non-coreligionist was 

motivated by discriminatory animus 

rather than a sincere application of 

religious tenets. Unlike the fact-finding 

to determine the reason for an 

employment decision, which does not 

always raise Establishment Clause 

concerns, this would be fact-finding to 

determine the reason for a religious 

decision on community membership. 

Testing the basis of that decision would 

most likely violate the First 

Amendment. It would violate the 

religious organization’s right to choose 

its membership free of government 

influence, and the process of inquiry 

alone into such a sensitive area ‘‘would 

risk judicial entanglement in religious 

issues.’’ Our Lady of Guadalupe, 140 S. 

Ct. at 2069; see Catholic Bishop, 440 

U.S. at 502. 

The absence of a clear command. 

Finally, a compelling interest ought to 

be one that is clearly spelled out by the 

government. For instance, in his 

concurrence in Little Sisters of the Poor, 

Justice Alito observed that it was highly 

significant that Congress itself had not 

treated free access to contraception as a 

compelling government interest. See 

Little Sisters of the Poor, 140 S. Ct. at 

2392–93 (Alito, J., concurring). Here, 

however, the scope of the religious 

exemption is unsettled. As discussed 

above, courts have consistently 

interpreted the religious exemption to 


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29The Court also observed that ‘‘other employers 

in other cases may raise free exercise arguments 

that merit careful consideration.’’ Bostock, 140 S. 

Ct. at 1754. 

prohibit religious organizations from 

discriminating on bases other than 

religion. But Bostock left open the scope 

of the exemption’s protection for 

religious discrimination, and only two 

federal court of appeal decisions have 

addressed a fact pattern in which a 

religious organization’s religious tenets 

conflicted with a non-religious Title VII 

protection. See Fremont, 781 F.2d at 

1368 (finding challenged religious 

practice outside the scope of the 

religious exemption and changing the 

practice would pose little interference 

with the organization’s religious belief 

and practice); Pacific Press, 676 F.2d at 

1279 (determining that the EEOC’s 

action ‘‘does not and could not conflict 

with [the employer’s] religious 

doctrines, nor does it prohibit an 

activity rooted in religious belief’’). 

Without stronger legal evidence that the 

religious exemption’s protections are 

cabined by E.O. 11246’s other 

protections (and thus may seriously 

infringe religious freedom), OFCCP is 

hesitant to describe that theory as 

furthering a compelling government 

interest. 

(3) Least Restrictive Means 

In the third step of the RFRA analysis, 

OFCCP assesses whether its application 

of the religious burden to the person ‘‘is 

the least restrictive means of furthering 

that compelling government interest.’’ 

42 U.S.C. 2000bb–1(b)(2). Because 

OFCCP believes that it has less than a 

compelling interest in enforcing E.O. 

11246 in the circumstances 

contemplated for purposes of this 

general RFRA analysis it need not 

consider whether that foreclosed 

enforcement would be by the least 

restrictive means. When the Supreme 

Court has found a regulation violated 

RFRA, the Court has permitted the 

regulatory agency to determine the 

correct remedy. See, e.g., Hobby Lobby, 

573 U.S. at 726, 731, 736; 79 FR 51118 

(Aug. 27, 2014) (proposed modification 

in light of Hobby Lobby). As a result, 

OFCCP has discretion to determine an 

appropriate accommodation without 

having to also determine the least 

restrictive alternative. As Justice Alito 

recently explained, RFRA ‘‘does not 

require . . . that an accommodation of 

religious belief be narrowly tailored to 

further a compelling interest. . . . 

Nothing in RFRA requires that a 

violation be remedied by the narrowest 

permissible corrective.’’ Little Sisters of 

the Poor, 140 S. Ct. at 2396 (Alito, J., 

concurring). OFCCP further believes the 

RFRA approach outlined here is an 

appropriate accommodation, which 

applies only to bona fide religious 

employers and which permits only 

employment actions based on sincere 

religious tenets; employees remain 

protected from discrimination 

motivated by animus or any other nonreligious reason, and employment 

actions based on race always remain 

prohibited. 

(4) The Harris Case 

OFCCP does not view the Sixth 

Circuit’s opinion in EEOC v. R.G. &. 

G.R. Harris Funeral Homes, Inc., 884 

F.3d 560 (6th Cir. 2018), aff’d, Bostock 

v. Clayton Cnty., 140 S. Ct. 1731 (2020), 

as requiring a different analysis here. In 

that case (one of three consolidated in 

Bostock), an employee of a funeral home 

informed the funeral home’s owner of 

the employee’s intention to present as a 

member of the opposite sex while at 

work. The owner stated that he would 

violate his religious beliefs were he to 

permit the employee to do so and 

terminated the employee. See id. at 568– 

69. In the ensuing litigation, the funeral 

home raised a RFRA defense. The Sixth 

Circuit held that Title VII 

discrimination claims ‘‘will necessarily 

defeat’’ RFRA defenses to such 

discrimination. Id. at 595. The court 

addressed each element of RFRA. 

Regarding substantial burden, the court 

held in relevant part that the employer’s 

mere toleration of the employee’s 

conduct to comply with Title VII is not 

an endorsement of it, so it was not a 

substantial burden. Regarding the 

furtherance of a compelling interest, the 

court held that failure to enforce Title 

VII would result in the employee 

suffering discrimination, ‘‘an outcome 

directly contrary to the EEOC’s 

compelling interest in combating 

discrimination in the workforce.’’ Id. at 

592. Regarding least-restrictive means, 

the court held that enforcement of Title 

VII is itself the least-restrictive means 

for eradicating employment 

discrimination on the basis of sex. See 

id. at 593–97. 

The defendant in Harris did not raise 

the RFRA issue to the Supreme Court, 

but the Court in Bostock nonetheless 

observed that, ‘‘[b]ecause RFRA operates 

as a kind of super statute . . . it might 

supersede Title VII’s commands in 

appropriate cases.’’ 29 Bostock, 140 S. Ct. 

at 1754. To the extent Harris remains 

good law, OFCCP does not view the 

Sixth Circuit’s RFRA analysis as 

applicable here, as the facts of the case 

are readily distinguishable from this 

rule’s protections for religious 

organizations. The funeral home at the 

center of the Harris case was not a 

religious organization. See 884 F.3d at 

581. Unlike the religious employers that 

are OFCCP’s focus here, the funeral 

home had ‘‘virtually no religious 

characteristics,’’ id. at 582: No 

religiously inspired code of conduct, no 

doctrinal statement, and no other 

religious requirement for employees. 

Nor did the funeral home through its 

work seek to advance the values of a 

particular religion. See id. Indeed, the 

funeral home was clearly outside the 

scope of OFCCP’s religious exemption— 

which exists to prevent E.O. 11246’s 

nondiscrimination provisions from 

interfering with a religious 

organization’s freedom to employ 

‘‘individuals of a particular religion’’— 

and furthermore the funeral home’s own 

testimony indicated that its conduct was 

motivated by commercial rather than 

religious concerns. See id. at 576 n.5, 

586, 589 n.10. 

Bearing those key factual differences 

in mind, OFCCP disagrees that, at least 

as applied to religious organizations 

regulated by OFCCP, ‘‘tolerating’’ 

employee conduct that is contrary to the 

organization’s sincerely held religious 

tenets can never constitute a substantial 

burden under RFRA, as the court held 

in Harris. Id. at 588. That holding is, at 

the very least, in tension with Little 

Sisters of the Poor, Hobby Lobby, and 

the Free Exercise Clause precedents 

they rested on. See Hobby Lobby, 573 

U.S. at 723–25; see also Little Sisters of 

the Poor, 140 S. Ct. at 2383 (‘‘[In Hobby 

Lobby,] we made it abundantly clear 

that, under RFRA, the Departments 

must accept the sincerely held 

complicity-based objections of religious 

entities.’’); id. at 2390 (Alito, J., 

concurring) (observing that ‘‘federal 

courts have no business addressing 

whether the religious belief asserted in 

a RFRA case is reasonable,’’ including 

religious beliefs underlying complicitybased objections). When government 

requires conduct proscribed by religious 

faith on pain of substantial penalty, 

there is a burden upon religious 

exercise. See Sherbert, 374 U.S. at 404. 

Additionally, the burden is even 

clearer for an objecting religious 

organization than it was for the funeral 

home in Harris. Unlike a secular 

employer, a religious organization has a 

religious foundation and purpose and 

may select its employees on the basis of 

their religious adherence. Requiring 

religious employers to maintain 

employees who disregard the 

organization’s religious tenets thus more 

seriously threatens to undermine the 

organization’s mission and integrity. 

This gives even more credence to a 

claim that forcing a religious employer 


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30Cf. Masterpiece Cakeshop, 138 S. Ct. at 1727 

(stating that a clergy member’s refusal to perform 

a gay marriage ‘‘would be well understood in our 

constitutional order as an exercise of religion, an 

exercise that gay persons could recognize and 

accept without serious diminishment to their own 

dignity and worth’’). 

to maintain such an employee would 

substantially burden its religious 

exercise. 

OFCCP also does not view Harris’s 

treatment of the compelling-interest 

prong of RFRA as persuasive when 

applied to religious organizations 

regulated by OFCCP. First, because the 

defendant was not a religious 

organization, the Harris court did not 

consider the antecedent question of 

whether the government has a 

compelling interest in applying 

nondiscrimination laws to a religious 

organization when doing so would 

threaten to compromise the 

organization’s integrity or mission, with 

its attendant more-severe infringements 

on religious free exercise and 

establishment problems. As discussed 

above, there are instances where that 

could occur, so accordingly in that 

situation the RFRA analysis is different. 

Additionally, E.O. 11246 contains 

additional and discretionary exceptions 

that Title VII does not have, which 

further alter the compelling-interest 

balance. 

(5) OFCCP’s Compelling Interest in 

Prohibiting Racial Discrimination 

In response to commenters who raised 

the issue, OFCCP reiterates here that it 

has a compelling interest in eradicating 

racial discrimination, even as against 

religious organizations. To be sure, 

OFCCP is currently unaware of any 

contractor contending that its religious 

beliefs required it to take employment 

actions that implicate race, and 

commenters supplied no evidence of 

that occurring. Nonetheless, in response 

to commenters’ broader concerns, 

OFCCP makes clear here that its 

overwhelming interest in eradicating 

racial discrimination would defeat 

RFRA claims in the context addressed 

in this section of the rule’s preamble. 

OFCCP will enforce E.O. 11246 against 

any contractor or subcontractor that 

takes employment actions on the basis 

of race, even if religiously motivated. At 

least one commenter that strongly 

supported the proposed rule likewise 

recognized that the religious exemption 

should not protect ‘‘a religious 

organization’s employment decision 

. . . based on racial status.’’ 

OFCCP treats racial discrimination as 

unique because the Constitution does as 

well. The Supreme Court recognizes 

that ‘‘[r]acial bias is distinct.’’ PenaRodriguez v. Colorado, 137 S. Ct. 855, 

868 (2017). Indeed, a long history of the 

Court’s ‘‘decisions demonstrate that 

racial bias implicates unique historical, 

constitutional, and institutional 

concerns.’’ Id. (emphasis added). 

Although this final rule recognizes that 

religious accommodations may be 

necessary in certain other contexts 

regarding considerations of sex, 

‘‘discrimination on the basis of race, 

‘odious in all aspects, is especially 

pernicious in the administration of 

justice.’ ’’ Id. (quoting Rose v. Mitchell, 

443 U.S. 545, 555 (1979)). 

The Supreme Court has elsewhere 

recognized the government’s unique 

interest in eradicating racial 

discrimination. In Hobby Lobby, the 

Court considered ‘‘the possibility that 

discrimination in hiring, for example on 

the basis of race, might be cloaked as 

religious practice to escape legal 

sanction,’’ but explained that ‘‘[t]he 

Government has a compelling interest in 

providing an equal opportunity to 

participate in the workforce without 

regard to race, and prohibitions on 

racial discrimination are precisely 

tailored to achieve that critical goal.’’ 

573 U.S. at 733. In Bob Jones University, 

the Court similarly concluded that the 

government had a ‘‘compelling’’ 

interest—described as ‘‘a fundamental 

overriding interest’’—‘‘in eradicating 

racial discrimination,’’ and further 

explained the ‘‘governmental interest’’ 

in eradicating racial discrimination 

‘‘substantially outweighs whatever 

burden’’ the government action in that 

case ‘‘place[d] on petitioners’ exercise of 

their religious beliefs.’’ Bob Jones, 461 

U.S. at 604; see also Newman v. Piggie 

Park Enters., Inc., 390 U.S. 400, 402 n.5 

(1968) (describing as ‘‘patently 

frivolous’’ the argument that a 

prohibition on racial discrimination 

‘‘was invalid because it contravenes the 

will of God and constitutes an 

interference with the free exercise of the 

Defendant’s religion’’) (internal 

quotation marks omitted). 

The government’s heightened interest 

in eradicating racial discrimination is 

further exhibited by the Supreme 

Court’s jurisprudence regarding the 

Equal Protection Clause of the 

Fourteenth Amendment. In Equal 

Protection Clause cases, the Court 

applies ‘‘strict scrutiny’’ to instances of 

race-based classifications, meaning that 

‘‘all racial classifications, imposed by 

whatever federal, state, or local 

governmental actor . . . are 

constitutional only if they are narrowly 

tailored measures that further 

compelling governmental interests.’’ 

Adarand Constructors, Inc. v. Pena, 515 

U.S. 200, 227 (1995). Strict scrutiny 

presents a more pressing standard than 

the ‘‘intermediate scrutiny’’ that the 

Court applies in Equal Protection Clause 

cases to instances of sex-based 

classifications, see, e.g., Craig v. Boren, 

429 U.S. 190, 197 (1976)) 

(‘‘[C]lassifications by gender must serve 

important governmental objectives and 

must be substantially related to 

achievement of those objectives.’’); id. at 

218 (Rehnquist, J., dissenting) (referring 

to the majority approach as 

‘‘intermediate’’ scrutiny), and the 

‘‘rational-basis scrutiny’’ that the Court 

has sometimes applied to classifications 

based on sexual orientation, see 

Lawrence v. Texas, 539 U.S. 558, 578 

(2003); Romer v. Evans, 517 U.S. 620, 

631–32 (1996). The Supreme Court has 

further recognized that traditional views 

on marriage do not suggest bigotry or 

invidious discrimination but instead are 

held ‘‘in good faith by reasonable and 

sincere people here and throughout the 

world.’’ Obergefell v. Hodges, 576 U.S. 

644, 657 (2015).30 The Constitution, as 

interpreted by the Supreme Court, is 

more protective of race than other 

protected classifications. Thus, the 

Court’s long-established Equal 

Protection jurisprudence supports the 

conclusion that although the 

government has an interest in 

eradicating discrimination on the bases 

of all protected classes, the 

governmental interest in eradicating 

racial discrimination is particularly 

strong. This final rule is consistent with 

that framework. 

e. Application of the Religious 

Exemption 

As explained in the proposed rule, 

when evaluating allegations of 

discrimination on bases other than 

religion against employers that are 

entitled to the Title VII religious 

exemption, courts carefully evaluate 

whether the employment action was 

permissibly based on the ‘‘particular 

religion’’ of the employee. The 

particulars vary. In the absence of direct 

evidence of discrimination on a 

protected basis other than religion, 

courts generally invoke the burdenshifting framework of McDonnell 

Douglas Corp. v. Green, 411 U.S. 792 

(1973), to determine whether a religious 

employer’s invocation of religion (or a 

religiously motivated policy) in making 

an employment decision was genuine 

or, instead, was merely a pretext for 

discrimination prohibited under Title 

VII. See Cline, 206 F.3d 651; Boyd, 88 

F.3d 410; cf. Geary, 7 F.3d 324 (applying 

McDonnell Douglas in assessing 

religious-exemption defense to claim 

under the Age Discrimination in 

Employment Act). At least one other 


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case has noted that ‘‘[o]ne way’’ to show 

discriminatory intent using 

circumstantial evidence ‘‘is through the 

burden-shifting framework set out in 

McDonnell Douglas,’’ but another way is 

to ‘‘show enough non-comparison 

circumstantial evidence to raise a 

reasonable inference of intentional 

discrimination.’’ Hamilton v. Southland 

Christian Sch., Inc., 680 F.3d 1316, 1320 

(11th Cir. 2012). 

In undertaking this evaluation, 

OFCCP, like courts, ‘‘merely asks 

whether a sincerely held religious belief 

actually motivated the institution’s 

actions.’’ Geary, 7 F.3d at 330. The 

religious organization’s burden ‘‘to 

explain is considerably lighter than in a 

non-religious employer case,’’ since the 

organization, ‘‘at most, is called upon to 

explain the application of its own 

doctrines.’’ Id. ‘‘Such an explanation is 

no more onerous than is the initial 

burden of any institution in any First 

Amendment litigation to advance and 

explain a sincerely held religious belief 

as the basis of a defense or claim.’’ Id.; 

see Seeger, 380 U.S. at 185 (holding 

whether a belief is ‘‘truly held’’ is ‘‘a 

question of fact’’). The sincerity of 

religious exercise is often undisputed or 

stipulated. See, e.g., Hobby Lobby, 573 

U.S. at 717 (‘‘The companies in the case 

before us are closely held corporations, 

each owned and controlled by a single 

family, and no one has disputed the 

sincerity of their religious beliefs.’’); 

Holt, 574 U.S. at 361 (‘‘Here, the 

religious exercise at issue is the growing 

of a beard, which petitioner believes is 

a dictate of his religious faith, and the 

Department does not dispute the 

sincerity of petitioner’s belief.’’). In 

assessing sincerity, OFCCP takes into 

account all relevant facts, including 

whether the contractor had a preexisting 

basis for its employment policy and 

whether the policy has been applied 

consistently to comparable persons, 

although absolute uniformity is not 

required. See Kennedy, 657 F.3d at 194 

(noting that the Title VII religious 

exemption permits religious 

organizations to ‘‘consider some attempt 

at compromise’’); LeBoon, 503 F.3d at 

229 (‘‘[R]eligious organizations need not 

adhere absolutely to the strictest tenets 

of their faiths to qualify for Section 702 

protection.’’); see also Killinger, 113 

F.3d at 199–200. OFCCP will also 

evaluate any factors that indicate an 

insincere sham, such as acting ‘‘in a 

manner inconsistent with that belief’’ or 

‘‘evidence that the adherent materially 

gains by fraudulently hiding secular 

interests behind a veil of religious 

doctrine.’’ Philbrook, 757 F.2d at 482 

(quoting Barber, 650 F.2d at 441) 

(internal quotation mark omitted); cf., 

e.g., Hobby Lobby, 573 U.S. at 117 n.28 

(‘‘To qualify for RFRA’s protection, an 

asserted belief must be ‘sincere’; a 

corporation’s pretextual assertion of a 

religious belief in order to obtain an 

exemption for financial reasons would 

fail.’’); Quaintance, 608 F.3d at 724 

(Gorsuch, J.) (‘‘[T]he record contains 

additional, overwhelming contrary 

evidence that the [defendants] were 

running a commercial marijuana 

business with a religious front.’’). 

Other decisions have not used the 

McDonnell Douglas framework, 

particularly when an inquiry into 

purported pretext would risk entangling 

the court in the internal affairs of a 

religious organization or require a court 

or jury to assess religious doctrine or the 

relative weight of religious 

considerations. See Geary, 7 F.3d at 

330–31 (discussing cases). Depending 

on the circumstances, such an inquiry 

by a court or an agency could 

impermissibly infringe on the First 

Amendment rights of the employer. 

This arises most prominently in the 

context of the ministerial exception, a 

judicially recognized exemption 

grounded in the First Amendment from 

employment-discrimination laws for 

decisions regarding employees who 

‘‘minister to the faithful.’’ HosannaTabor, 565 U.S. at 189; see also Our 

Lady of Guadalupe, 140 S. Ct. at 2060. 

The exemption ‘‘is not limited to the 

head of a religious congregation,’’ nor 

subject to ‘‘a rigid formula for deciding 

when an employee qualifies as a 

minister.’’ Hosanna-Tabor, 565 U.S. at 

190; see also Our Lady of Guadalupe, 

140 S. Ct. at 2067. ‘‘The interest of 

society in the enforcement of 

employment discrimination statutes is 

undoubtedly important. But so too is the 

interest of religious groups in choosing 

who will preach their beliefs, teach their 

faith, and carry out their mission.’’ 

Hosanna-Tabor, 565 U.S. at 189. The 

ministerial exception thus bars ‘‘an 

employment discrimination suit brought 

on behalf of a minister.’’ Id.; see also 

Our Lady of Guadalupe, 140 S. Ct. at 

2073. In such a situation, it is 

dispositive that the employee is a 

minister; there is no further inquiry into 

the employer’s motive. See HosannaTabor, 565 U.S. at 706 (‘‘By imposing an 

unwanted minister, the state infringes 

the Free Exercise Clause . . . and the 

Establishment Clause’’); see, e.g., 

Rayburn, 772 F.2d at 1169 (‘‘In 

‘quintessentially religious’ matters, the 

free exercise clause of the First 

Amendment protects the act of decision 

rather than a motivation behind it.’’ 

(quoting Serbian E. Orthodox Diocese v. 

Milivojevich, 426 U.S. 696, 720 (1976))). 

Some commenters, such as a religious 

legal association and an association of 

evangelical churches and schools, 

agreed with OFCCP that governmental 

inquiry into religious employers’ 

practices could violate the First 

Amendment. A religious legal 

organization commended OFCCP for 

deferring to religious organizations on 

matters of doctrine and religious 

observance, and commented that doing 

otherwise could lead to unconstitutional 

entanglement with religion. These are 

the constitutional concerns that likewise 

constrain courts’ analyses when an 

employer makes an employment 

decision based on religious criteria, yet 

the employee disputes the religious 

criteria. In those situations, courts have 

stated that ‘‘if a religious institution . . . 

presents convincing evidence that the 

challenged employment practice 

resulted from discrimination on the 

basis of religion, § 702 deprives the 

EEOC of jurisdiction to investigate 

further to determine whether the 

religious discrimination was a pretext 

for some other form of discrimination.’’ 

Little, 929 F.2d at 948 (quoting 

Mississippi College, 626 F.2d at 485). 

Courts have noted the constitutional 

dangers of ‘‘choos[ing] between parties’ 

competing religious visions’’ and 

entangling themselves in deciding 

whether the employer or the employee 

has the better reading of doctrine, or 

which tenets an employee must follow 

or believe to remain in employment. 

Geary, 7 F.3d at 330; see Curay-Cramer, 

450 F.3d at 141 (‘‘While it is true that 

the plaintiff in Little styled her 

allegation as one of religious 

discrimination whereas [this plaintiff] 

alleges gender discrimination, we do not 

believe the difference is significant in 

terms of whether serious constitutional 

questions are raised by applying Title 

VII. Comparing [plaintiff] to other 

Ursuline employees who have 

committed ‘offenses’ against Catholic 

doctrine would require us to engage in 

just the type of analysis specifically 

foreclosed by Little.’’); Little, 929 F.2d at 

949 (‘‘In this case, the inquiry into the 

employer’s religious mission is not only 

likely, but inevitable, because the 

specific claim is that the employee’s 

beliefs or practices make her unfit to 

advance that mission. It is difficult to 

imagine an area of the employment 

relationship less fit for scrutiny by 

secular courts.’’); Maguire, 627 F. Supp. 

at 1507 (‘‘Despite [plaintiff’s] protests 

that she is a Catholic, ‘of a particular 

religion,’ the determination of who fits 

into that category is for religious 


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authorities and not for the government 

to decide.’’). 

Some commenters criticized OFCCP’s 

description of the extent to which it 

would be permissible to inquire into 

whether a religious employer’s adverse 

employment action was based on 

religion or on another protected 

characteristic. Many of these 

commenters believed OFCCP’s proposed 

approach is inconsistent with courts’ 

inquiry in Title VII cases. For example, 

a group of state attorneys general 

asserted that, unlike the definition in 

the proposed rule, Title VII 

jurisprudence and case law has required 

nuanced and fact-dependent inquiry 

into whether a religious employer 

discriminated against a worker based on 

his or her ‘‘particular religion’’ or on 

another protected basis. An LGBT rights 

advocacy organization criticized OFCCP 

for rejecting the traditional burdenshifting framework set forth in 

McDonnell Douglas and instead placing 

the burden on workers. Some of these 

commenters stated that OFCCP’s 

proposed inquiry would not be 

adequately rigorous. For example, a 

civil liberties and human rights legal 

advocacy organization asserted that 

OFCCP’s approach as described in the 

preamble ‘‘allows religion to serve as a 

pretext for discrimination, and creates 

roadblocks for individuals seeking to 

bring claims of discrimination against 

federal contractors.’’ An organization 

that advocates separation of church and 

state asserted that a more rigorous 

inquiry would not violate the First 

Amendment and stated that OFCCP’s 

concerns about impermissible 

entanglement are overblown and cannot 

justify its refusal to engage in any 

investigation of religious employers at 

all. An anti-bigotry religious 

organization similarly asserted that a 

more rigorous inquiry would not violate 

RFRA, citing Hobby Lobby, 573 U.S. at 

733. 

Some commenters believed the 

proposal did not clearly describe the 

inquiry that OFCCP would undertake to 

determine whether an adverse action 

was based on religion or another 

protected characteristic. For example, a 

legal think tank commented that 

OFCCP’s failure to meaningfully address 

various cases discussing the issue of 

pretext on the basis that they ‘‘turn on 

their individual facts’’ contravenes 

OFCCP’s stated goal of ‘‘bringing clarity 

and certainty to federal contractors.’’ 

OFCCP disagrees with these 

commenters’ characterization of the 

NPRM, but reiterates—and to the extent 

necessary, clarifies for their benefit— 

that OFCCP intends to apply the 

religious exemption as it has been 

applied in the mine run of Title VII 

cases. In line with those cases, there are 

indeed aspects of the discrimination 

inquiry that are necessarily and rightly 

nuanced and fact-dependent, and there 

are aspects where inquiry can infringe 

upon religious organizations’ autonomy 

and are either prohibited or must be 

performed with care. The principles set 

out in those cases are reiterated below. 

First, if a contractor raises the defense 

that an employee or applicant is covered 

by the ministerial exception, OFCCP can 

inquire whether that is in fact so. But if 

so, then that is the end of the inquiry. 

OFCCP will not apply the executive 

order in those circumstances. See Our 

Lady of Guadalupe, 140 S. Ct. at 2060– 

61; Hosanna–Tabor, 565 U.S. at 194–95. 

Second, when the ministerial 

exception does not apply and the 

employee or applicant suffers adverse 

employment action by a contractor that 

is entitled to the religious exemption, 

OFCCP will apply traditional Title VII 

tools to ascertain whether the action 

was impermissible discrimination. In 

the absence of direct evidence of 

discrimination on a protected basis 

other than religion, this will typically 

involve application of the familiar 

McDonnell Douglas framework, in 

which (1) OFCCP must establish a prima 

facie case of discrimination on a 

protected basis other than religion; (2) 

the employer can respond with a 

nondiscriminatory reason, such as an 

explanation that its action was 

permitted under the religious exemption 

as pertaining to the individual’s 

particular religion; and (3) OFCCP, to 

find a violation, must rebut that 

explanation as a mere pretext. See 

McDonnell Douglas, 411 U.S. 792. 

Third, ascertaining whether unlawful 

discrimination motivated an employer’s 

action requires consideration of all 

relevant facts and circumstances. 

OFCCP will consider all available 

evidence as to whether a religious 

organization’s employment action was 

in fact sincerely motivated by the 

applicant’s or employee’s particular 

religion—such as, for instance, their 

adherence to the organization’s religious 

tenets—or whether that was a mere 

pretext for impermissible 

discrimination. 

Fourth, while OFCCP can inquire into 

the sincerity of the employer’s religious 

belief, it is constitutionally prohibited 

from refereeing internal religious 

matters of contractors that are entitled to 

the religious exemption. Thus OFCCP 

cannot decide, when the matter is 

disputed, whether the employer or the 

employee has the better reading of 

religious doctrine; whether an employee 

should be considered a faithful member 

of a religious organization’s community; 

whether some religious offenses or 

requirements are more important than 

others and should merit particular 

employment responses; whether the 

employer’s sincerely held religious view 

is internally consistent or logically 

appealing; and similar issues. 

Fifth, OFCCP believes these 

principles will cover the vast majority of 

scenarios, but there may be rare 

instances where an inquiry by a court or 

an agency into employment practices 

otherwise threatens First Amendment 

rights. See DeMarco v. Holy Cross High 

Sch., 4 F.3d 166, 172 (2d Cir. 1993) 

(‘‘There may be cases involving lay 

employees in which the relationship 

between employee and employer is so 

pervasively religious that it is 

impossible to engage in an agediscrimination inquiry without serious 

risk of offending the Establishment 

Clause.’’). Commenters argued that this 

final caveat detracted from the clarity of 

the proposed rule. OFCCP disagrees. 

This observation merely notes, as have 

courts, that there may be instances 

outside the ministerial exception where 

a discrimination case might involve the 

kinds of questions prohibited by the 

First Amendment. See id. (finding 

employee’s failed religious duties were 

‘‘easily isolated and defined,’’ so a trial 

could be conducted ‘‘without putting 

into issue the validity or truthfulness of 

Catholic religious teaching’’). Instructive 

here are the sorts of questions found 

constitutionally offensive by the 

Supreme Court in Catholic Bishop, in 

which a hearing officer tested a 

witness’s memory and knowledge of 

Catholic liturgies and masses. See 

Catholic Bishop, 440 U.S. at 502 & n.10; 

id. at 507–08 (appendix); see also Great 

Falls, 278 F.3d at 1343. OFCCP believes 

these cases provide sufficient principles 

for the agency to properly guide its 

inquiry if and when needful. 

f. Causation 

OFCCP proposed to apply a but-for 

standard of causation when evaluating 

claims of discrimination by religious 

organizations based on protected 

characteristics other than religion. 

Specifically, where a contractor that is 

entitled to the religious exemption 

claims that its challenged employment 

action was based on religion, OFCCP 

proposed finding a violation of E.O. 

11246 only if it could prove by a 

preponderance of the evidence that a 

protected characteristic other than 

religion was a but-for cause of the 

adverse action. See Univ. of Tex. Sw. 

Med. Ctr. v. Nassar, 570 U.S. 338, 362– 

63 (2013); Gross v. FBL Fin. Servs., Inc., 

557 U.S. 167, 180 (2009). OFCCP stated 


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that this approach was necessary in 

situations where a religious 

organization, acting on a sincerely held 

belief, took adverse action against an 

employee on the basis of the employee’s 

religion. OFCCP believed that 

application of the motivating factor 

framework in such cases might result in 

inappropriate encroachment upon the 

organization’s religious integrity. 

However, the NPRM recognized that in 

prior notice-and-comment rulemaking 

implementing Executive Order 13665, 

79 FR 20749 (Apr. 11, 2014) (amending 

E.O. 11246 to include pay transparency 

nondiscrimination), OFCCP rejected 

comments stating that a but-for 

causation standard was required and 

instead adopted the motivating factor 

framework as expressed in the Title VII 

post-1991 Civil Rights Act for analyzing 

causation. See 80 FR 54934, 54944–46 

(Sept. 11, 2015). 

A few commenters encouraged 

OFCCP to adopt the proposed but-for 

causation standard because they felt it 

would reduce government 

encroachment on religious autonomy. 

For instance, a private religious 

university commented that the proposed 

but-for standard is in line with statutory 

and First Amendment jurisprudence 

requiring the use of the least restrictive 

means to achieve government objectives 

that impinge on the exercise of religion. 

Another private religious university 

echoed this sentiment and added that 

the proposed but-for standard would 

enable religious entities to make 

employment decisions consistent with 

their sincerely held religious beliefs 

while still participating fully in the 

marketplace. 

However, the majority of commenters 

who addressed the proposed but-for 

standard opposed it, and many 

recommended that OFCCP instead 

continue to apply the motivating-factor 

standard of causation to all claims of 

discrimination under E.O. 11246. These 

commenters cited a wide variety of 

concerns related to the proposed but-for 

standard. 

Several commenters stated that the 

proposed standard would be too 

deferential to employers and/or impose 

too heavy a burden on employees. For 

instance, a national interfaith 

organization commented that, as long as 

an employer can cite another plausible 

reason for its actions, an employee 

cannot prove that discrimination 

occurred. The organization noted that 

under this standard, employees are far 

less likely to prevail. 

Other commenters expressed 

skepticism at OFCCP’s proffered 

rationale for departing from its 

established policy and practice of 

interpreting the nondiscrimination 

requirements of E.O. 11246 in a manner 

consistent with Title VII principles. For 

instance, a national reproductive rights 

organization commented that, for 

decades, courts have resolved claims of 

employment discrimination by religious 

organizations without implicating the 

concerns OFCCP cites. The organization 

added that OFCCP’s concerns about 

impermissible entanglement are 

overblown and unsupported by case 

law. A transgender legal professional 

organization expressed similar 

concerns. 

Relatedly, a number of commenters 

opposed the proposed but-for standard 

on the basis that it conflicts with Title 

VII and related case law. Several of 

these commenters criticized OFCCP’s 

reliance on Nassar, 570 U.S. at 362–63, 

and Gross, 557 U.S. at 180, and argued 

that these cases do not bridge the gap 

between the proposed but-for standard 

and Title VII principles. For instance, a 

contractor association commented: ‘‘The 

Supreme Court has adopted the ‘but for’ 

standard for retaliation claims under 

Title VII (Nassar) and for ADEA claims 

(Gross); it has not done so for 

discrimination claims under Title VII.’’ 

Similarly, an LGBT rights advocacy 

organization commented the two cases 

cited by OFCCP did not adopt a but-for 

causation requirement for Title VII or 

E.O. 11246 cases. 

Additionally, multiple commenters 

expressed concern that the proposed 

but-for standard would run contrary to 

E.O. 11246’s prohibition on 

discrimination and/or OFCCP’s core 

mission of enforcing the Executive 

Order. For instance, a group of state 

attorneys general commented that the 

proposed but-for standard is contrary to 

law and exceeds OFCCP’s authority 

because it impermissibly interprets the 

Executive Order’s anti-discrimination 

provisions. And a national health policy 

organization commented: ‘‘The new 

proposed rule threatens to jeopardize 

the very mission of OFCCP and the 

original intent of the E.O. 11246 to 

protect workers from discrimination 

. . . .’’ 

Finally, several commenters raised 

practical objections to the proposed butfor standard. For instance, an atheist 

civil liberties organization commented 

that applying different causation 

standards to cases involving similarly 

situated employers would ‘‘make it 

challenging for contractors seeking to 

comply with federal law, resulting in 

extra expense and legal confusion for 

workers and employers.’’ An 

organization that advocates separation 

of church and state expressed similar 

concerns, arguing that ‘‘status-based 

discrimination claims based on 

identical conduct would be evaluated 

according to different standards of 

proof.’’ 

Considering the comments received, 

OFCCP will apply the motivating-factor 

analysis to all claims of discrimination, 

including discrimination by religious 

organizations based on protected 

characteristics other than religion. 

OFCCP agrees that it can avoid 

impermissible entanglement while 

applying a motivating-factor standard of 

causation. See, e.g., Curay-Cramer, 450 

F.3d at 139 (‘‘[A]s long as the plaintiff 

did not challenge the validity or 

plausibility of the religious doctrine 

said to support her dismissal, but only 

questioned whether it was the actual 

motivation, excessive entanglement 

questions were not raised.’’) (citing 

Geary, 7 F.3d at 330); DeMarco, 4 F.3d 

at 170–71)). Where there is a dispute as 

to whether an employment action was 

motivated by the employee’s adherence 

to religious tenets, or instead was 

motivated by impermissible 

discrimination—a ‘‘one or the other’’ 

scenario—OFCCP will apply the 

principles just discussed in subsection 

II.A.5.e, ‘‘Application of the Religious 

Exemption.’’ Where instead an 

employment action is motivated by the 

employee’s adherence or non-adherence 

to religious tenets that implicate another 

protected category, OFCCP will assess 

the action on a case-by-case basis in 

accordance with the general RFRA 

analysis discussed earlier. The approach 

adopted in this final rule is consistent 

with OFCCP’s longstanding policy and 

practice as well as Title VII principles 

and case law. 

f. Conclusion 

For the reasons described above and 

in the NPRM, and considering the 

comments received, OFCCP finalizes the 

proposed definition of Particular 

religion without modification. 

B. Section 60–1.5 Exemptions 

This rule proposed to add paragraph 

(e) to 41 CFR 60–1.5 to establish a rule 

of construction for subpart A of 41 CFR 

part 60–1 that provides for the broadest 

protection of religious exercise 

permitted by the Constitution and laws, 

including RFRA. This rule of 

construction is adapted from RLUIPA, 

42 U.S.C. 2000cc–3(g). Significantly, 

RFRA applies to all government 

conduct, not just to legislation or 

regulation. 42 U.S.C. 2000bb–1. 

Paragraph (e) is clarifying, since the 

Constitution and federal law, including 

RFRA, already bind OFCCP. 

Some commenters expressed general 

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construction based on the importance of 

protecting religious freedom, including 

constitutional protections. For example, 

a religious leadership and policy 

organization approved of the fact that 

the proposal gives religious freedom due 

deference by advocating for a broad and 

robust interpretation of its protections. 

In a joint comment, a religious legal 

association and an association of 

evangelical churches and schools 

commented that the proposed rule of 

construction reflects longstanding 

religious freedom principles recognized 

by Congress and protected by the First 

Amendment. A pastoral membership 

organization commented that the 

proposed rule of construction gives 

religious exercise the special protection 

required by the constitutional text and 

history. A religious professional 

education association commented that 

the proposed rule of construction 

provided clarity regarding the meaning, 

scope, and application of the religious 

exemption. Additional supportive 

commenters, including an evangelical 

chaplains’ advocacy organization, stated 

that the rule of construction is 

consistent with executive orders and the 

Attorney General’s memorandum on 

religious liberty. 

Other commenters opposed the 

proposed rule of construction for a 

variety of reasons, including arguing 

that its application in this context 

would actually be inconsistent with the 

U.S. Constitution and federal laws. For 

example, a labor organization 

commented that the interpretation goes 

beyond the Constitution and law, 

including RFRA. An anti-bigotry 

religious organization further noted, 

with regard to RFRA, the Supreme 

Court’s holding in Hobby Lobby that 

‘‘anti-discrimination prohibitions are 

the least restrictive means of achieving 

the government’s compelling interest in 

providing equality in the workplace,’’ 

and commented that this principle 

applied with greater force to 

employment by federal contractors. 

Other commenters, including a group of 

state attorneys general and a transgender 

advocacy organization, cautioned that 

construing the religious exemption 

broadly would ‘‘exceed[ ] statutory and 

judicial limits’’ and conflict with the 

purpose and text of federal equal 

employment laws to provide maximum 

nondiscrimination protections for 

workers. A talent management 

assessment company commented that 

the ‘‘maximum extent permitted by 

law’’ standard was vague and left too 

much discretion to the agency charged 

with enforcement. 

OFCCP did not intend, in proposing 

the rule of construction at § 60–1.5(e), to 

create any new legal obligation or 

proscription on the rights of workers, 

but rather sought only to reaffirm 

existing protections found in federal law 

that already apply to OFCCP. The 

parallel rule of construction in RLUIPA 

has been in place for nearly 20 years 

and has proved to be a workable legal 

standard. OFCCP emphasizes that this 

rule of construction provides for broad 

protection of both employers’ and 

employees’ religious exercise. Moreover, 

by its terms, the provision limits the 

agency’s interpretation of this protection 

to what is permitted under the U.S. 

Constitution, RFRA, and other 

applicable laws. It thus reflects the 

Supreme Court’s recognition that, 

within the religion clauses of the First 

Amendment, there is ‘‘room for play in 

the joints productive of a benevolent 

neutrality which will permit religious 

exercise to exist without sponsorship 

and without interference.’’ Walz, 397 

U.S. at 669. Accordingly, for the reasons 

described above and in the NPRM, 

considering the comments received, 

OFCCP finalizes the proposed rule of 

construction without modification. 

C. Severability 

The Department has decided to 

include severability provisions as part 

of this final rule. To the extent that any 

provision of this final rule is declared 

invalid by a court of competent 

jurisdiction, the Department intends for 

all other provisions that are capable of 

operating in the absence of the specific 

provision that has been invalidated to 

remain in effect. Severability clauses 

have been added at the end of 41 CFR 

60–1.3 and as a new paragraph, 41 CFR 

60–1.5(f). 

III. Other Comments 

Numerous commenters raised a 

variety of other general points about the 

proposed rule. 

A. Religious Liberty for Employees 

Several commenters opposed the 

proposed rule as undermining or failing 

to promote religious liberty. For 

instance, a group of U.S. Senators 

commented that the proposed rule will 

allow employers to refuse to interview 

even highly qualified candidates simply 

because they do not regularly attend 

religious services in their employer’s 

faith. According to the Senators, this 

could create a situation in which 

religious employers are allowed to 

discriminate against workers ‘‘who 

practice their faith differently—a 

fundamental right guaranteed by the 

Constitution.’’ A religious women’s 

organization echoed this concern and 

also stated that the proposed rule would 

promote one interpretation of one 

religion—namely, evangelical 

Christianity—at the expense of religious 

liberty more broadly. Some commenters 

stated that the proposal would allow 

contractors to compel employees to 

follow their religious practices, which 

they argued directly violates Title VII 

and even the Constitution. A group of 

state attorneys general commented that, 

under the proposed rule, employers’ 

religious freedom would come at the 

cost of the loss of the religious freedom 

of employees forced to abide by their 

employers’ religious beliefs. A legal 

professional organization commented 

that the proposed rule would protect 

for-profit or nominally religious 

employers’ right to require employees to 

participate in prayer or other religious 

practices. A religious organization 

commented that employers could 

invoke the religious exemption to coerce 

their workers into participating in 

certain religious practices under the 

threat of termination. Several other 

commenters, including a legal 

professional association, an organization 

that advocates separation of church and 

state, an anti-bigotry religious 

organization, and a migrants’ rights 

organization, expressed general concern 

that the proposed rule would weaken 

religious liberty. 

OFCCP believes that the final rule’s 

overall effect will be to promote 

religious liberty. See, e.g., Hobby Lobby, 

573 U.S. at 707 (‘‘[P]rotecting the freeexercise rights of corporations like 

Hobby Lobby, Conestoga, and Mardel 

protects the religious liberty of the 

humans who own and control those 

companies.’’). The Supreme Court has 

described the expansion of the Title VII 

religious exemption as ‘‘lifting a 

regulation that burdens the exercise of 

religion.’’ Amos, 483 U.S. 327, 338 

(1987). As described above, the 

proposed definitions have been altered 

in the final rule to respond to 

commenters’ concerns that nominally 

religious employers might qualify for 

the exemption, as well as to clarify the 

steps OFCCP will take in analyzing 

claims of discrimination by religious 

contractors. To the extent that 

commenters believe that the religious 

exemption itself increases employers’ 

religious liberty at the expense of 

employees’ religious liberty, OFCCP 

reiterates that it is required to 

administer the religious exemption as 

part of E.O. 11246. The President, 

following Congress’s lead, has already 

decided how to balance the religious 

liberty of religious employers and their 

employees, and OFCCP cannot modify 

that. Additionally, claiming the 


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religious exemption and taking 

employment action under its 

protections is purely optional for 

employers; the government does not 

require any employment action that may 

be protected by the exemption. 

B. Establishment Clause and Other 

Constitutional Questions 

Several commenters stated that the 

proposal violates constitutional 

prohibitions on aiding private actors 

that discriminate. This concern was 

shared by an affirmative action 

professionals association, a civil 

liberties organization, a professional 

organization of educators, and an 

organization that advocates separation 

of church and state, among others. The 

civil liberties organization commented, 

for instance, that the proposed rule 

would permit contractors to 

discriminate with federal funds, thus 

putting the government’s imprimatur on 

discrimination in violation of the Equal 

Protection and Establishment Clauses. 

A variety of commenters opposed the 

proposed rule on the basis that it 

violates the Establishment Clause and/ 

or general church-state separation 

principles. For instance, an atheist civil 

liberties organization commented that 

the proposed rule will violate the 

Constitution’s religion clauses by 

involving the government in religious 

practice, promoting dominant religious 

practices, burdening unpopular 

religious practices, and harming third 

parties. Similarly, a labor union raised 

concerns that the rule crosses into 

territory proscribed by the 

Establishment Clause by authorizing 

federal contractors to advance their 

religious preferences and practices 

through the receipt of federal funds and 

the performance of public functions. 

Other commenters stated that the 

proposed rule violates separation of 

powers. For instance, an LGBT rights 

advocacy organization stated that since 

2001, Congress has repeatedly rejected 

efforts to extend the Title VII exemption 

to government-funded entities. 

Likewise, a consortium of federal 

contractors and subcontractors asserted 

that it would be inappropriate for 

OFCCP to regulate the religious 

exemption without direct and actual 

legislative or constitutional guidance. 

Finally, several commenters, 

including an anti-bigotry religious 

organization and a civil liberties and 

human rights legal advocacy 

organization, raised concerns that the 

proposal violates a variety of other 

constitutional principles, including the 

no-religious-tests clause, the free speech 

clause, and the constitutional right of 

privacy. 

Other commenters supported the 

proposed rule as consistent with 

constitutional principles. These 

commenters stated, among other things, 

that the proposal appropriately respects 

freedom of religion, helpfully clarifies 

that religious hiring protections apply 

even when federal funding is involved, 

and is consistent with the Establishment 

Clause. A religious liberties legal 

organization commented, for instance, 

that the proposed rule adheres to the 

traditional understanding that ‘‘the 

Constitution [does not] require complete 

separation of church and state; it 

affirmatively mandates accommodation, 

not merely tolerance, of all religions, 

and forbids hostility toward any’’ 

(quoting Lynch v. Donnelly, 465 U.S. 

668, 668 (1984)). A religious leadership 

and policy organization commented that 

the proposal reflects an accurate 

understanding of the free exercise of 

religion and ‘‘its place in our society.’’ 

OFCCP agrees with the commenters 

who stated that the proposal is 

consistent with constitutional 

principles. As noted in the NPRM and 

above, OFCCP believes that the final 

rule is supported by recent Supreme 

Court decisions that protect religionexercising organizations and individuals 

under the U.S. Constitution and federal 

law. See, e.g., Little Sisters of the Poor, 

140 S. Ct. 2367; Espinoza, 140 S. Ct. 

2246; Our Lady of Guadalupe, 140 S. Ct. 

2049; Masterpiece Cakeshop, 138 S. Ct. 

1719; Trinity Lutheran, 137 S. Ct. 2012; 

Hobby Lobby, 573 U.S. 682; HosannaTabor, 565 U.S. 171. These decisions 

make clear, among other constitutional 

principles, that ‘‘condition[ing] the 

availability of benefits upon a 

recipient’s willingness to surrender his 

religiously impelled status effectively 

penalizes the free exercise of his 

constitutional liberties.’’ Trinity 

Lutheran, 137 S. Ct. at 2022 (alterations 

omitted) (quoting McDaniel, 435 U.S. at 

626 (plurality opinion)); see also 

Espinoza, 140 S. Ct. at 2256. OFCCP 

believes that the final rule achieves 

consistency with these landmark 

Supreme Court decisions and is 

constitutionally valid. Moreover, the 

definitions and rule of construction 

adopted in the final rule will help 

OFCCP avoid the ‘‘constitutional 

minefield’’ into which some courts have 

fallen when adjudicating Title VII 

claims against religious organizations. 

World Vision, 633 F.3d at 730 

(O’Scannlain, J., concurring). The final 

rule will enable OFCCP to apply the 

religious exemption without engaging in 

an analysis that would be inherently 

subjective and indeterminate, outside its 

competence, susceptible to 

discrimination among religions, or 

prone to entanglement with religious 

activity. See, e.g., Mitchell v. Helms, 530 

U.S. 793, 828 (2000) (plurality opinion); 

Colo. Christian Univ. v. Weaver, 534 

F.3d 1245, 1261–62 (10th Cir. 2008); 

Great Falls, 278 F.3d at 1342–43. We 

address these points in more detail next. 

1. Neutrality Toward Religion 

The rule does not impermissibly favor 

religion. In Bowen v. Kendrick, 487 U.S. 

589 (1988), the Supreme Court held that 

a religious organization is not 

disqualified from government programs 

that fund religious and nonreligious 

entities alike on a neutral basis. A 

‘‘neutral basis’’ means that the criteria 

are neutral and secular, with no 

preference for religious institutions 

because of their religious character. Id.; 

see also Rosenberger v. Rector & Visitors 

of Univ. of Va., 515 U.S. 819 (1995) (‘‘A 

central lesson of our decisions is that a 

significant factor in upholding 

governmental programs in the face of 

Establishment Clause attack is their 

neutrality towards religion.’’); U.S. Dep’t 

of Justice, Office of Legal Counsel, 

Religious Restrictions on Capital 

Financing for Historically Black 

Colleges and Universities, 2019 WL 

4565486 (Aug. 15, 2019) (‘‘Religious 

Restrictions’’) (‘‘The neutrality principle 

runs throughout the Court’s decisions, 

and is broadly consistent with a 

tradition of federal support for religious 

institutions that dates from the time of 

the Founding.’’). 

This rule is motivated by legitimate 

secular purposes: To expand the eligible 

pool of federal contractors to include 

religious organizations, so that the 

federal government may choose from 

among competing vendors the best 

combination of price, quality, reliability, 

and other purely secular criteria; to 

clarify the law for religious 

organizations and thus reduce 

compliance burdens; to correct any 

misperception that religious 

organizations are disfavored in 

government contracting; and ‘‘to 

alleviate significant governmental 

interference with the ability of religious 

organizations to define and carry out 

their religious missions,’’ Amos, 483 

U.S. at 336, by appropriately protecting 

their autonomy to hire employees who 

will further their religious missions. The 

final rule also has a religion-neutral 

effect. Under the final rule, both 

religious and secular organizations will 

retain the ability to bid on government 

contracts. Proposed vendors will have to 

compete solely on the basis of secular 

criteria. The use of sectarian criteria 

remains forbidden; nothing in the 


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proposed rule sanctions the use of 

sectarian criteria for contract awards. 

2. Secular and Sectarian Activities 

Nothing in the final rule sanctions 

direct federal funding of religious 

activities. In Kendrick, the Court forbade 

such direct funding of religious activity 

but upheld a statute authorizing 

payments to religious organizations that 

sought to eliminate or reduce the social 

and economic problems caused by 

teenage sexuality because the services to 

be provided under the statute were ‘‘not 

religious in character.’’ Kendrick, 487 

U.S. at 605; see also U.S. Dep’t of 

Justice, Office of Legal Counsel, 

Department of Housing and Urban 

Development Restrictions on Grants to 

Religious Organizations that Provide 

Secular Social Services, 12 Op. O.L.C. 

190, 199 (1998) (concluding that the 

government can fund a religious 

organization’s secular activities if they 

can be meaningfully and reasonably 

separated from the sectarian activities). 

Likewise here, in the relatively rare 

circumstances in which a proposed 

vendor both qualifies as a religious 

organization and receives a federal 

contract, the federal funds will pay the 

organization to fulfill the terms of the 

secular contract, not to pray or to 

proselytize. 

Moreover, the Establishment Clause 

does not forbid the federal government 

from contracting with religious 

organizations for a secular purpose, 

even if the receipt of the contract 

incidentally helps the religious 

organization advance its sectarian 

purpose. As Kendrick explained, 

‘‘Nothing in our previous cases prevents 

Congress from . . . recognizing the 

important part that religion or religious 

organizations may play in resolving 

certain secular problems. . . . To the 

extent that this congressional 

recognition has any effect of advancing 

religion, the effect is at most ‘incidental 

and remote.’ ’’ 487 U.S. at 607; see, e.g., 

Roemer v. Bd. of Pub. Works of Md., 426 

U.S. 736 (1976) (‘‘[R]eligious 

institutions need not be quarantined 

from public benefits that are neutrally 

available to all.’’); Barnes-Wallace v. 

City of San Diego, 704 F.3d 1067 (9th 

Cir. 2012) (finding no Establishment 

Clause violation where city leased land 

to both secular and sectarian 

organizations). Here, as in Kendrick, 

nothing in the final rule ‘‘indicates that 

a significant proportion of the federal 

funds will be disbursed to ‘pervasively 

sectarian’ institutions.’’ Kendrick, 487 

U.S. at 610. There are also no concerns 

that funds will be used for an 

‘‘essentially religious endeavor’’; rather, 

funds will be used to fulfill the 

government’ secular contracting 

requirements. Espinoza, 140 S. Ct. at 

225. The rule simply allows religious 

organizations to compete with secular 

organizations on the basis of secular 

criteria without being forced to 

compromise their religious purpose. 

Commenters objecting on this basis are 

dissatisfied with the existence of the 

exemption. 

3. Respecting the First Amendment 

Of great significance to OFCCP, the 

rule’s clarifications and 

accommodations better comport with 

the Free Exercise Clause by affording 

religious organizations an appropriate 

level of autonomy in their hiring 

decisions while still permitting them to 

engage in federal contracting. As the 

Court explained in Trinity Lutheran, 

137 S. Ct. at 2022, the government 

violates the Free Exercise Clause when 

it conditions a generally available 

public benefit on an entity’s giving up 

its religious character, unless that 

condition withstands the strictest 

scrutiny. ‘‘[D]enying a generally 

available benefit solely on account of 

religious identity imposes a penalty on 

the free exercise of religion that can be 

justified only by a state interest of the 

highest order.’’ Id.; see also Locke v. 

Davey, 540 U.S. 712 (2004) (holding 

government may not deny generally 

available funding to a sectarian 

institution because of its religious 

character); Trinity Lutheran, 137 S. Ct. 

at 2021 (‘‘The Department’s policy 

expressly discriminates against 

otherwise eligible recipients by 

disqualifying them from a public benefit 

solely because of their religious 

character. . . . [S]uch a policy imposes 

a penalty on the free exercise of religion 

that triggers the most exacting scrutiny.’’ 

(citing Lukumi, 508 U.S. at 546)). When 

the government conditions a program in 

this way, the government ‘‘has punished 

the free exercise of religion. ‘‘To 

condition the availability of benefits 

. . . upon [a recipient’s] willingness to 

. . . surrender[] his religiously impelled 

[status] effectively penalizes the free 

exercise of his constitutional liberties.’’ 

Id. at 2022 (quoting McDaniel, 435 U.S. 

at 626 (plurality opinion)); cf. Trinity 

Lutheran, 137 S. Ct. at 2022 (citing Ne. 

Fla. Chapter, Associated Gen. 

Contractors of Am. v. Jacksonville, 508 

U.S. 656, 666 (1993) (‘‘[T]he ‘injury in 

fact’ is the inability to compete on an 

equal footing in the bidding process, not 

the loss of a contract.’’)). 

In a recent opinion, the Department of 

Justice’s Office of Legal Counsel 

concluded that the government violates 

the Free Exercise Clause by denying 

sectarian organizations an opportunity 

to compete on equal footing for federal 

dollars. See Religious Restrictions, 2019 

WL 4565486. As an initial matter, OLC 

explained that ‘‘[t]he Establishment 

Clause permits the government to 

include religious institutions, along 

with secular ones, in a generally 

available aid program that is secular in 

content. There is nothing inherently 

religious in character about loans for 

capital improvement projects; this is not 

a program in which the government is 

‘dol[ing] out crosses or Torahs to [its] 

citizens.’ ’’ Id. at *6 (citing Am. Atheists, 

Inc. v. City of Detroit Downtown Dev. 

Auth., 567 F.3d 278, 292 (6th Cir. 

2009)). Because the capital-financing 

program at issue was a secular, neutral 

aid program, it did not violate the 

Establishment Clause. On the other 

hand, the government would violate the 

Free Exercise Clause by denying loans 

to an institution ‘‘in which a substantial 

portion of its functions is subsumed in 

a religious mission,’’ because such a 

restriction ‘‘discriminates based on the 

religious character of an institution.’’ 

OLC concluded that the appropriate 

balance was to deny loans under the 

program only for facilities that are 

predominantly used for devotional 

religious activity, or for facilities that 

offer only programs of instruction 

devoted to vocational religious 

education. 

Here, some commenters made clear 

that the federal government’s current 

practice presented religious 

organizations with a dubious choice: 

They may participate in the government 

contracting process or retain their 

religious integrity, but not both. As one 

commenter noted, ‘‘If the best service 

provider or subcontractor happens to be 

a religious entity, they are often 

unwilling to comply with the federal 

anti-discrimination laws for fear that 

they will no longer be able to preserve 

the integrity of their organizations. This 

is a direct result of the uncertainty in 

the applicability of the religious 

exemption under the current law.’’ 

Similarly, another commenter, an 

association of medical professionals, 

recently surveyed health professional 

members working in faith-based 

organizations overseas and found that 

almost half, 49%, feel that the U.S. 

government is not inclined to work with 

faith-based organizations. The final rule 

thus removes any such concerns raised 

by contractors and instead provides 

appropriate religious accommodation. 

4. Use of Federal Funds 

Some commenters expressed concern 

that the rule would allow employers to 

use federal funds to discriminate against 

job applicants and employees on the 


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basis of religion. That is a critique of the 

E.O. 11246 religious exemption itself, 

not this rule. OFCCP cannot and does 

not by this rule reopen that 

determination by the President. 

Additionally, as noted earlier, claiming 

the religious exemption and taking 

employment action under its 

protections is purely optional for 

employers; the government does not 

require any employment action that may 

be protected by the exemption. 

Regardless, as the Department of 

Justice’s Office of Legal Counsel has 

pointed out, the federal government has 

repeatedly permitted religious 

organizations to receive federal funds 

while also maintaining autonomy over 

their hiring practices. See 31 O.L.C. 162, 

185–86 (2007); accord Office of the Att’y 

Gen., Memorandum for All Executive 

Departments and Agencies: Federal Law 

Protections for Religious Liberty at 6 

(Oct. 6, 2017), available at 

www.justice.gov/opa/press-release/file/ 

1001891/download. Likewise, the 

proposed rule does not run afoul of the 

Establishment Clause merely because of 

the possibility that, in some rare 

instance, a court may determine that a 

particular contract award to a religious 

organization impermissibly endorses 

religion. ‘‘[W]hile religious 

discrimination in employment might be 

germane to the question whether an 

organization’s secular and religious 

activities are separable in a governmentfunded program, that factor is not 

legally dispositive.’’ U.S. Dep’t of 

Justice, Office of Legal Counsel, 

Memorandum for William P. Marshall 

from Randolph D. Moss at 20 (Oct. 12, 

2000), available at justice.gov/olc/page/ 

file/936211/download. To the contrary, 

if the government ‘‘is generally 

indifferent to the criteria by which a 

private organization chooses its 

employees and to the identity and 

characteristics of those employees, there 

would be less likelihood that the 

government could reasonably be 

perceived to endorse the organization’s 

use of religious criteria in employment 

decisions.’’ Id. at 25. And in some 

situations, the religious exemption 

‘‘might be a permissible religious 

accommodation that alleviates special 

burdens rather than an impermissible 

religious preference.’’ Id. at 30. For 

instance, the Office of Legal Counsel 

concluded that RFRA in one instance 

required the Department’s grant-making 

arm to exempt a religious organization 

from the religious nondiscrimination 

provisions of Title VII. See id.; see also 

31 O.L.C. 162, 190 (2007). Here, several 

religious organizations commented that 

the current contracting rules erect a 

barrier to participation by eroding their 

ability to hire members of their 

particular faith. Generally speaking, 

then, OFCCP, in line with case law from 

Amos to Trinity Lutheran, views this 

rule as merely providing permissible 

accommodation rather than 

impermissibly establishing religion. 

5. Effects on Applicants and Employees 

Finally, several commenters opposed 

the proposed rule on the basis that it 

would increase discrimination against 

contractors’ employees and applicants. 

Some cited historical discrimination 

against disadvantaged groups, warning 

that the proposal would cause a 

regression in civil rights protections, 

and stated that religion has often been 

used as a way to justify discrimination. 

For example, an affirmative action 

professionals association asserted that 

employment discrimination permitted 

by the proposed rule could eliminate 

the civil rights protections that 

minorities and women have enjoyed for 

decades. 

Commenters also gave examples of 

how potential discrimination could play 

out. For example, an organization 

advocating for the separation of church 

and state commented that, for instance, 

an evangelical Christian might refuse to 

hire a gay man, but agree to hire a twicedivorced, thrice-married man, even 

though both homosexuality and divorce 

are prohibited by evangelical 

Christianity. An LGBT civil rights 

organization argued that even a 

construction company, janitorial 

service, or low-level healthcare provider 

could claim a religious mission and 

refuse to hire or provide services to 

single parents or individuals who 

become pregnant outside marriage or 

within a same-sex relationship. 

Many commenters warned that 

adoption of the proposed rule would 

increase discrimination against lesbian, 

gay, bisexual, transgender, and queer 

(LGBTQ) individuals, specifically. Some 

commenters alleged that the proposed 

rule was part of a concerted effort to roll 

back the rights of LGBTQ individuals 

and other disadvantaged groups. Several 

commenters stated that transgender 

employees in particular already face 

high rates of discrimination and 

poverty, and that this proposal would 

leave them even more vulnerable. A 

transgender civil rights and advocacy 

organization commented specifically 

that transgender people are already far 

more likely to be unemployed, and that 

approximately 1 in 4 earn less than 

$24,000 per year. A women and family 

rights advocacy organization wrote that, 

currently, almost half of LGBTQ 

workers report actively concealing their 

identity out of fear of discrimination, 

and that the proposal would exacerbate 

this issue. Commenters wrote that 

effects might include LGBTQ 

individuals being less inclined to seek 

HIV care and services for the aging, as 

well as facing increased vulnerability to 

trafficking. Others stated that the 

proposal would permit contractors to 

discriminate against people in same-sex 

relationships, including refusing to hire 

applicants, terminating employees when 

they marry someone of the same sex, or 

denying spousal benefits. Several 

commenters stated that even LGBTQ 

people of faith would be discriminated 

against. 

Commenters also asserted that the 

proposed rule could increase 

discrimination against women and 

pregnant people based on religious 

beliefs about work, family roles, and 

reproduction. This included the 

possibility of discrimination against 

women for becoming pregnant outside 

of marriage, using contraception, using 

in vitro fertilization, seeking abortions, 

or getting divorced. An organization 

combatting hunger wrote that even 

facially neutral practices may 

‘‘disproportionately’’ harm women, 

because when an employer opposes 

‘‘sexual practices out of wedlock, those 

who bear the physical evidence— 

pregnancy—are going to be the ones that 

get fired.’’ Several commenters also 

stated that employers may discriminate 

against women based on religious 

beliefs that women should not work 

outside the home. For example, a 

women and family rights advocacy 

organization commented that some 

employers may refuse to hire women 

altogether, and that women may also be 

denied health insurance, professional 

growth opportunities, or other benefits 

because of an employer’s belief that 

women are not the ‘‘head of the 

household’’ and therefore do not need 

such benefits. Additionally, an 

interfaith policy and advocacy 

organization commented that an 

employer could cite a belief that women 

should not be alone with men they are 

not married to in order to deny female 

employees access to mentorship, 

training opportunities, and senior 

leadership positions in the workplace. 

Commenters also asserted that the 

proposal would increase discrimination 

against religious minorities and/or 

atheists. Many stated that federal 

contractors should not be permitted to 

categorically exclude applicants of a 

particular religion. A transgender civil 

rights and advocacy organization 

commented that the proposed rule 

would promote sectarianism by 

allowing people of different faiths to 


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discriminate against one another. A 

number of commenters, including a 

civil liberties advocacy group and an 

interfaith policy and advocacy 

organization, commented: ‘‘Federal 

contractors should not be allowed to 

hang a sign that says ‘Jews, Sikhs, 

Catholics, Latter-day Saints need not 

apply.’ ’’ 

Many commenters asserted that the 

proposal could allow racial 

discrimination as well. An organization 

combatting hunger claimed that 

discrimination would occur by citing a 

2014 study in their comment which 

found that only 10% of Americans were 

comfortable permitting a small business 

to refuse service to African-Americans 

based on a religious reason. 

Commenters including an LGBTQ 

wellness organization also warned that, 

under the proposal, a religious 

contractor will be permitted to 

discriminate against interracial couples 

if it believes that marriage should be 

between a man and a woman of the 

same race. A legal think tank 

commented that employers could 

require employees to join a majority- or 

exclusively-white church, for instance, 

or to share particular religious beliefs 

that have racial implications and/or are 

more common among white Christians. 

Some commenters argued that federal 

funds should not be used by contractors 

who may commit hiring discrimination. 

For example, a transgender advocacy 

organization commented that people 

should not be legally compelled to 

financially support entities that would 

refuse to employ them because of their 

identities, and noted that religious 

employers who seek to employ only 

‘‘their own kind’’ should seek out nonfederal funding. Other commenters 

stated that U.S. federal government 

contracting serves as a model for the 

private sector or foreign nations, which 

may emulate discriminatory practices 

permitted by this proposal. 

As explained above, the religious 

exemption generally speaking does not 

excuse a contractor from complying 

with E.O. 11246’s requirements 

regarding antidiscrimination and 

affirmative action; notices to applicants, 

employees, and labor unions; 

compliance with OFCCP’s 

implementing regulations; the 

furnishing of reports and records to the 

government; and flow-down clauses to 

subcontractors. See E.O. 11246 §§ 202– 

203. Religious organizations that serve 

as government contractors must comply 

with all of E.O. 11246’s 

nondiscrimination requirements except 

in some narrow respects, under some 

narrow and reasonable circumstances 

recognized under law, where religious 

organizations maintain, for instance, 

sincerely held religious tenets regarding 

matters such as marriage and intimacy 

which may implicate certain protected 

classes under E.O. 11246. 

Some commenters argued that the 

proposed rule would violate the 

Establishment Clause specifically 

because of the increased discrimination 

they believed it would permit. Most of 

these commenters argued that potential 

discrimination will unconstitutionally 

burden third parties, including 

employees, applicants, and beneficiaries 

of contracting services. A labor union 

wrote that granting employers a broad 

religious exemption would harm 

employees and applicants based on 

their own religious beliefs and practices 

(or lack thereof), in violation of the 

Establishment Clause. 

As noted above, the Supreme Court 

upheld Title VII’s religious exemption, 

on which E.O. 11246’s exemption is 

modeled, against an Establishment 

Clause challenge. Amos, 483 U.S. at 

330. It did so in spite of the fact that the 

application of the exemption ‘‘had some 

adverse effect on those holding or 

seeking employment with those 

organizations.’’ Tex. Monthly, Inc. v. 

Bullock, 489 U.S. 1, 18 n.8 (1989); cf. 

Amos, 483 U.S. at 338–39 (rejecting the 

claim that the religious exemption 

‘‘offends equal protection principles by 

giving less protection to the employees 

of religious employers than to the 

employees of secular employers’’ in part 

because the exemption had ‘‘a 

permissible purpose of limiting 

governmental interference with the 

exercise of religion’’). If the E.O. 11246 

religious exemption similarly affects 

some third parties, it does so to 

‘‘prevent[ ] potentially serious 

encroachments on protected religious 

freedoms.’’ Texas Monthly, 489 U.S. at 

18 n.8. 

Some commenters stated that what 

they viewed as the proposal’s failure to 

consider the effects of increased 

discrimination made the proposed rule 

inconsistent with OFCCP’s previous 

rulemakings. Multiple commenters 

stated that previous rulemakings 

identified discrimination as wasteful of 

taxpayers’ money, and that this proposal 

failed to address this issue. For 

example, a state civil liberties 

organization commented that, in prior 

rules, OFCCP has consistently stated 

that discrimination in government 

contracting wastes taxpayer funds by 

preventing the hiring of the best talent, 

increasing turnover, and decreasing 

productivity. In addition, several 

commenters, including a women and 

family rights advocacy organization, 

referred to the rule as an ‘‘abrupt 

departure’’ from OFCCP’s previous EEO 

enforcement. A civil liberties 

organization commented that the 

‘‘Department itself has previously 

acknowledged the harms of 

discrimination to the country as a 

whole, but ignores them entirely in the 

Proposed Rule.’’ An LGBT legal services 

organization commented that the 

proposed rule indicates that OFCCP will 

not enforce the relevant protections 

sufficiently. 

Some commenters noted more 

specifically that they believe the 

proposal is inconsistent with the 

agency’s rule implementing E.O. 13672, 

which added sexual orientation and 

gender identity to the bases protected by 

E.O. 11246. For example, a legal think 

tank commented that, in its rule on 

sexual orientation and gender identity, 

OFCCP took into account the benefits of 

nondiscrimination—meaning that it 

would be arbitrary and capricious for 

OFCCP to ignore these benefits of nondiscrimination ‘‘in the present 

rulemaking.’’ A watchdog organization 

wrote that ‘‘undoing these protections 

could have adverse long-term effects on 

the federal contracting system, 

including lower-quality goods and 

services, and impaired federal programs 

and missions.’’ 

Commenters also criticized the 

proposal as purportedly inconsistent 

with OFCCP’s 2016 sex discrimination 

rule. A civil liberties organization 

commented that, in that rule, the agency 

cited social science research supporting 

the need for effective nondiscrimination 

enforcement. Similarly, a legal think 

tank wrote that, in its sex discrimination 

rulemaking, OFCCP specifically cited 

research indicating that employment 

discrimination against transgender 

workers is pervasive. These commenters 

asserted that OFCCP ignored such 

statistics in proposing the current rule. 

OFCCP continues to believe that 

discrimination by federal contractors 

generally has a negative impact on the 

economy and efficiency of government 

contracting. Indeed, that is one of the 

primary justifications for E.O. 11246. 

However, it has long been recognized 

that a religious exemption in the 

Executive Order is also warranted, 

Congress has determined that 

accommodations under RFRA are 

sometimes required, and OFCCP’s 

policy is to respect the religious dignity 

of employers and employees to the 

maximum extent permissible by law. 

Further, OFCCP believes that this rule 

will have a net benefit to the economy 

and efficiency of government 

contracting. For those current and 

potential federal contractors and 

subcontractors interested in the 


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31See EEOC, Questions and Answers: Religious 

Discrimination in the Workplace (July 22, 2008), 

www.eeoc.gov/laws/guidance/questions-andanswers-religious-discrimination-workplace; EEOC, 

EEOC Compliance Manual § 12–I.C.1 (July 22, 

2008), www.eeoc.gov/laws/guidance/section-12- 

religious-discrimination. The EEOC’s website states 

for both these documents that, ‘‘[a]s a result of the 

Supreme Court’s decision in Our Lady of 

Guadalupe School v. Morrissey-Berru, we are 

currently working on updating this web page.’’ Id. 

32See EEOC, ‘‘PROPOSED Updated Compliance 

Manual on Religious Discrimination’’ (Nov. 17, 

2020), https://beta.regulations.gov/document/ 

EEOC-2020-0007-0001 (last accessed November 18, 

2020). 

33 Id. at 21. 

34 Id. at 20. 

exemption, this rule will help them 

understand its scope and requirements 

and may encourage a broader pool of 

organizations to compete for 

government contracts and more of them, 

which will inure to the government’s 

benefit. 

Commenters’ concerns here are also 

exaggerated. As explained above, 

OFCCP does not anticipate this rule will 

affect the vast majority of contractors or 

the agency’s regulation of them, since 

they do not and would not seek to 

qualify for the religious exemption. As 

commenters noted, religious 

organizations do not appear to be a large 

portion of federal contractors. And even 

for them, adherence to E.O. 11246’s 

nondiscrimination provisions is 

required except in those circumstances 

well-established under law, including 

the religious exemption, the ministerial 

exception, and RFRA. OFCCP also 

reemphasizes that the proposed 

definitions have been altered in the final 

rule to respond to commenters’ 

concerns that nominally religious 

employers might qualify for the 

exemption, as well as to clarify the steps 

OFCCP will take in analyzing claims of 

discrimination by religious contractors. 

As explained in more detail in the 

Regulatory Procedures section below, 

OFCCP has considered the possible 

adverse effects of the rule and believes 

they will be minimal and will be 

outweighed by the benefits. 

C. The Equal Employment Opportunity 

Commission 

Some commenters raised concerns 

about this rule’s compatibility with the 

positions of the EEOC. Different aspects 

of this concern have been described and 

addressed in earlier parts of this 

preamble. OFCCP consolidates those 

concerns and addresses them here as 

well. Those concerns included general 

concerns that the proposed rule would 

undermine the EEOC’s efforts by taking 

positions contrary to the EEOC or that 

the proposed rule would introduce 

confusion by subjecting federal 

contractors to conflicting or at least 

different legal regimes. Commenters also 

objected to specific aspects of the rule 

on grounds that they differed from the 

EEOC’s position, including the 

proposed rule’s inclusion of for-profit 

entities as among those able to qualify 

for the religious exemption, the 

proposed rule’s disagreement that the 

exemption’s scope is limited to a 

coreligionist preference, and the 

proposed rule’s but-for causation 

standard. 

OFCCP has a decades-long 

partnership with the EEOC and works 

closely with it to ensure equal 

employment opportunity for American 

workers. OFCCP rejects the idea that 

this rule would undermine that 

longstanding and constructive 

partnership. The EEOC reviewed the 

proposed rule and this final rule. This 

final rule applies only to government 

contractors and subcontractors, not the 

broader swath of U.S. employers that 

the EEOC regulates. Within that smaller 

segment of employers, it applies only to 

that small minority of contractors and 

subcontractors that qualify or may seek 

to qualify for the religious exemption. 

Among that group, they would need to 

have 15 or more employees to be 

covered by the EEOC. And within that 

group, there would still need to be a 

situation in which any differences 

between the views of OFCCP and EEOC 

would cause a different result. In short, 

OFCCP doubts this rule will create any 

systemic disharmony between the 

agencies’ enforcement programs. 

For the small universe of employers 

remaining as defined above, the 

differences that may exist are minor. At 

the outset, OFCCP notes that EEOC does 

not have substantive rulemaking 

authority under Title VII, see EEOC v. 

Arabian Am. Oil Co., 499 U.S. 244, 257 

(1991), and the EEOC statements on this 

issue are in nonbinding subregulatory 

guidance. As to the specifics of that 

guidance, the differences that do exist 

are small. OFCCP has revised its 

approach in the final rule to adopt a 

motivating-factor standard of causation, 

so a difference there, assuming there 

was one, no longer exists. Regarding 

OFCCP’s definition of Religious 

corporation, association, educational 

institution, or society, the EEOC’s 

current subregulatory guidance on this 

topic has not been updated since 2008, 

before World Vision and Hobby Lobby 

were decided.31 Contrary to some 

commenters’ assertions, this guidance 

treats for-profit status as a significant 

factor, but not as dispositive; this final 

rule does the same. Notably, the EEOC 

very recently issued a proposal to 

update its compliance manual on 

religious discrimination.32 This rule is 

not inconsistent with the proposal 

either, which notes that ‘‘[t]he religious 

organization exemption under Title VII 

does not mention nonprofit and forprofit status’’ and states that ‘‘[w]hether 

a for-profit corporation can constitution 

a religious corporation under Title VII is 

an open question.’’ 33 The EEOC’s 2008 

guidance states that the exception is 

only for organizations that are primarily 

religious. Its recently proposed guidance 

describes the inquiry as one into 

‘‘whether an entity is religious.’’ 34

OFCCP’s test also seeks to identify 

organizations that are primarily 

religious—through an appropriately 

guided, reliable, and objective inquiry. 

The EEOC’s 2008 guidance (and its 

proposed guidance) suggests an openended set of non-dispositive factors, 

while this final rule uses a set of clearly 

defined factors that are sufficient for 

non-profit entities; regarding for-profit 

entities, additional evidence compatible 

with some of the additional factors 

listed by the EEOC’s 2008 guidance may 

come into play. Insofar as any difference 

still remains between this final rule and 

EEOC’s 2008 guidance, OFCCP believes 

that difference is tolerable when 

weighed against the subsequent 

developments in the case law, the 

reasoning of which OFCCP finds 

persuasive, and OFCCP’s desire for a 

more structured test, especially given 

OFCCP’s unique contract-based 

regulatory structure. 

Regarding OFCCP’s definition of 

Particular religion, the same EEOC 

guidance documents from 2008 state 

that the religious exemption ‘‘only 

allows religious organizations to prefer 

to employ individuals who share their 

religion.’’ It then addresses two 

religiously based views that are not 

protected by the exemption: Racial 

discrimination and differences in fringe 

benefits between men and women. This 

final rule is fully compatible with both 

those examples. As discussed earlier in 

this preamble, OFCCP always has a 

compelling interest in enforcing 

prohibitions on racial discrimination, 

and OFCCP endorses the result in 

Fremont, 781 F.2d 1362. This final rule, 

however, does provide an exemption 

broader than a mere coreligionist hiring 

preference. OFCCP believes, for the 

reasons stated earlier in this preamble, 

that that view is sufficiently supported 

by the Title VII case law, and in fact is 

the more persuasive view of the law. 

OFCCP also believes that a broader view 

is more likely to encourage religious 

organizations to enter the pool of 

competitors for government contracts, 

which benefits the government. For 


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35EEOC, ‘‘PROPOSED Updated Compliance 

Manual on Religious Discrimination’’ at 24. 

36 Id. (citing Hall, 215 F.3d at 625; Little, 929 F.3d 

at 951). 

these reasons, OFCCP believes that any 

issues arising from any differences with 

the EEOC’s views as stated in 

subregulatory guidance from 2008 are 

outweighed by the benefits of adopting 

a broader view of the exemption. 

Additionally, OFCCP believes any 

differences on this issue may be 

resolved in the near future. The EEOC’s 

proposed guidance is even more 

consistent with OFCCP’s final rule. The 

proposed guidance states that ‘‘the 

exemption allows religious 

organizations to prefer to employ 

individuals who share their religion, 

defined not by the self-identified 

religious affiliation of the employee, but 

broadly by the employer’s religious 

observances, practices, and beliefs.’’ 35

The guidance goes on to state that ‘‘[t]he 

prerogative of a religious organization to 

employ individuals ‘‘ ‘of a particular 

religion’ . . . has been interpreted to 

include the decision to terminate an 

employee whose conduct or religious 

beliefs are inconsistent with those of its 

employer.’’ 36

OFCCP also believes some 

commenters mischaracterize any 

differences between the OFCCP and 

EEOC in this area as presenting 

contractors with conflicting liability. 

OFCCP’s final rule is at least as, or 

more, protective of religious 

organizations than the view stated in the 

EEOC’s guidance. A contractor can 

choose to adhere to the view articulated 

by the EEOC in 2008 and be in full 

compliance under the view of both 

agencies. 

Finally, OFCCP must balance its 

coordination with the EEOC with its 

need to follow directives from the 

President and the U.S. Department of 

Justice. Section 4 of Executive Order 

13798 states that ‘‘[i]n order to guide all 

agencies in complying with relevant 

Federal law, the Attorney General shall, 

as appropriate, issue guidance 

interpreting religious liberty protections 

in Federal law.’’ The Attorney General 

issued such guidance on October 6, 

2017, ‘‘to guide all administrative 

agencies and executive departments in 

the executive branch.’’ Office of the 

Att’y Gen., Memorandum for All 

Executive Departments and Agencies: 

Federal Law Protections for Religious 

Liberty at 1 (Oct. 6, 2017), available at 

www.justice.gov/opa/press-release/file/ 

1001891/download. This rule is fully 

compatible with that guidance: 

Religious corporations, associations, 

educational institutions, and societies—that 

is, entities that are organized for religious 

purposes and engage in activity consistent 

with, and in furtherance of, such purposes— 

have an express statutory exemption from 

Title VII’s prohibition on religious 

discrimination in employment. Under that 

exemption, religious organizations may 

choose to employ only persons whose beliefs 

and conduct are consistent with the 

organizations’ religious precepts. For 

example, a Lutheran secondary school may 

choose to employ only practicing Lutherans, 

only practicing Christians, or only those 

willing to adhere to a code of conduct 

consistent with the precepts of the Lutheran 

community sponsoring the school. Indeed, 

even in the absence of the Title VII 

exemption, religious employers might be able 

to claim a similar right under RFRA or the 

Religion Clauses of the Constitution. 

Id. at 6; see also id. at 12a–13a 

IV. Regulatory Procedures 

A. Executive Order 12866 (Regulatory 

Planning and Review), Executive Order 

13563 (Improving Regulation and 

Regulatory Review), and Executive 

Order 13771 (Reducing Regulation and 

Controlling Regulatory Costs) 

Under Executive Order 12866 (E.O. 

12866), OMB’s Office of Information 

and Regulatory Affairs (OIRA) 

determines whether a regulatory action 

is significant and, therefore, subject to 

the requirements of E.O. 12866 and 

OMB review. Section 3(f) of E.O. 12866 

defines a ‘‘significant regulatory action’’ 

as an action that is likely to result in a 

rule that: (1) Has an annual effect on the 

economy of $100 million or more, or 

adversely affects in a material way a 

sector of the economy, productivity, 

competition, jobs, the environment, 

public health or safety, or State, local or 

tribal governments or communities (also 

referred to as economically significant); 

(2) creates serious inconsistency or 

otherwise interferes with an action 

taken or planned by another agency; (3) 

materially alters the budgetary impacts 

of entitlement grants, user fees, or loan 

programs, or the rights and obligations 

of recipients thereof; or (4) raises novel 

legal or policy issues arising out of legal 

mandates, the President’s priorities, or 

the principles set forth in E.O. 12866. 

This final rule has been designated a 

‘‘significant regulatory action’’ although 

not economically significant, under 

section 3(f) of E.O. 12866. The Office of 

Management and Budget has reviewed 

this final rule. Pursuant to the 

Congressional Review Act (5 U.S.C. 801 

et seq.), OIRA designated this rule as not 

a ‘‘major rule,’’ as defined by 5 U.S.C. 

804(2). 

Executive Order 13563 (E.O. 13563) 

directs agencies to adopt a regulation 

only upon a reasoned determination 

that its benefits justify its costs; tailor 

the regulation to impose the least 

burden on society, consistent with 

obtaining the regulatory objectives; and 

in choosing among alternative 

regulatory approaches, select those 

approaches that maximize net benefits. 

E.O. 13563 recognizes that some 

benefits are difficult to quantify and 

provides that, where appropriate and 

permitted by law, agencies may 

consider and discuss qualitatively 

values that are difficult or impossible to 

quantify, including equity, human 

dignity, fairness, and distributive 

impacts. 

This final rule is an E.O. 13771 

deregulatory action because it is 

expected to reduce compliance costs 

and potentially the cost of litigation for 

regulated entities. 

1. The Need for the Regulation 

As discussed in the preamble, OFCCP 

received numerous comments 

addressing the need for the regulation. 

Some commenters stated the proposal 

was necessary to ensure religious 

entities could contract with the federal 

government without compromising their 

religious identities or missions. Some 

commenters also agreed with OFCCP’s 

observation that religious organizations 

have been reluctant to participate as 

federal contractors because of the lack of 

clarity or perceived narrowness of the 

E.O. 11246 religious exemption. 

OFCCP also received comments 

objecting to the proposal because they 

claimed it would permit taxpayer- or 

government-funded discrimination. 

Commenters argued that the 

Government should not allow federal 

contractors to fire or refuse to hire 

qualified individuals because they do 

not regularly attend religious services or 

adhere to the ‘‘right’’ religion. 

Additionally, commenters expressed 

skepticism about religious 

organizations’ reluctance to participate 

as federal contractors. Many of these 

commenters stated that OFCCP 

provided no evidence to support its 

claim or asserted that the proposed rule 

would increase rather than reduce 

confusion. In addition, several 

commenters cited a report from a 

progressive policy institute concluding 

that faith-based organizations that had 

objected to the lack of an expanded 

religious exemption in E.O. 13672 

continued to be awarded government 

contracts. 

OFCCP disagrees with commenters’ 

characterization of the rule as 

discriminatory. OFCCP is committed to 

enforcing all of E.O. 11246’s protections, 

including those protecting employees 

from discrimination on the basis of 

religion. OFCCP emphasizes again that 


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37U.S. General Services Administration, System 

for Award Management, data released in monthly 

files, available at https://sam.gov. The SAM 

database is an estimate with the most recent 

download of data occurring November 2020. 

38While the final rule may result in more 

religious corporations, associations, educational 

institutions or societies entering into federal 

contracting or subcontracting, there is no way to 

estimate the volume of increase. As noted above, 

OFCCP does not anticipate that the number of 

religious contractors will grow to be equal to nonreligious contractors, but uses this estimate due to 

the lack of data. 

this rule will have no effect on the 

overwhelming majority of federal 

contractors. Even for religious 

organizations that serve as government 

contractors, they too must comply with 

all of E.O. 11246’s nondiscrimination 

requirements except in some narrow 

respects under some narrow and 

reasonable circumstances recognized 

under law. This rule provides clarity on 

those circumstances, consistent with 

OFCCP’s obligations to also respect and 

accommodate the free exercise of 

religion. 

OFCCP agrees with the comments 

stating that the religious exemption 

contained in section 204(c) of E.O. 

11246 is necessary to ensure religious 

organizations can contract with the 

federal government without 

compromising their religious identities 

or missions. The fact that some faithbased organizations have been willing to 

enter into federal contracts does not 

mean that other faith-based 

organizations have not been reluctant to 

do so. Indeed, a few commenters offered 

evidence that religious organizations 

have been reluctant to contract with or 

receive grants from the federal 

government because of the lack of 

clarity regarding religious exemptions in 

federal law. In addition, although some 

commenters objected to the provision of 

any religious exemption for federal 

contractors, the religious exemption is 

part of E.O. 11246 that OFCCP is 

obligated to administer and enforce and 

has been part of the Executive Order for 

nearly two decades. 

OFCCP is publishing this final rule to 

clarify the scope and application of the 

religious exemption. The intent is to 

provide certainty and make clear that 

the exemption includes not only 

churches but employers that are 

organized for religious purpose, hold 

themselves out to the public as carrying 

out a religious purpose, and engage in 

activity consistent with and in 

furtherance of that religious purpose. 

OFCCP believes that the rule will 

promote consistency in OFCCP’s 

administration and that it will be clearer 

for contractors to follow. Further, 

OFCCP believes it will help achieve 

consistency with the administration 

policy to enforce federal law’s robust 

protections of religious freedom. 

2. Discussion of Impacts 

In this section, OFCCP presents a 

summary of the costs associated with 

the new definitions in § 60–1.3 and the 

new rule of construction in § 60–1.5. 

While this rule will only apply to 

federal contractors that are religious, 

OFCCP lacks data to determine the 

number of contractors that would fall 

within that definition and thus 

evaluates the impacts using data for the 

entire contractor universe despite the 

fact this number significantly overstates 

the number of religious contractors. 

Prior to publication of the NPRM, 

OFCCP surveyed the list of contractors 

in the General Service Administration’s 

System for Award Management (SAM) 

to identify organizations whose North 

American Industry Classification 

System (NAICS) descriptions or names 

included the word ‘‘religious,’’ 

‘‘church,’’ ‘‘mosque,’’ etc. This survey 

was not a useful or appropriate proxy 

for the number of potentially affected 

entities for several reasons. First, not all 

organizations with ‘‘religious’’ NAICS 

codes or names would qualify for the 

exemption, given that any formulation 

of the religious-organization test is factintensive and requires much more than 

that the organization simply have (what 

is commonly understood to be) a 

religious term in its name. This holds 

true under any formulation of the test, 

whether that used in a case like LeBoon 

or the test set out in the NPRM and 

refined in the final rule. Second, and 

similarly, many religious organizations 

that could qualify for the religious 

employer exemption at issue here may 

not include one of those three specific 

descriptors in their NAICS description 

much like many religious organizations 

do not include one of those three words 

in their legal names. Third, the religious 

exemption is an optional 

accommodation. Organizations that 

qualify for it may choose to use it, or 

not, and OFCCP has no reliable way of 

determining which will do so. Fourth, 

OFCCP believes that, as a government 

agency, it would be a fraught matter for 

it to search for potentially religious 

organizations based on its own view of 

what sorts of terms are religious, assess 

the results in the abstract, and attempt 

to attribute religious characteristics to 

the organizations found. This rule 

elsewhere rejects that sort of approach. 

For all these reasons, OFCCP has chosen 

to use broader estimates of the 

contractor universe. 

Further, OFCCP anticipates that many 

contractors would affirmatively 

disclaim any religious basis and thus 

OFCCP recognizes that the following 

analysis will be an overestimate, but 

uses it out of an abundance of caution. 

OFCCP determined that there are 

approximately 435,000 entities 

registered in the SAM database.37

Entities registered in the SAM database 

consist of contractor firms and other 

entities (such as state and local 

governments and other organizations) 

that are interested in federal contracting 

opportunities and other forms of federal 

financial assistance. The total number of 

entities in the SAM database fluctuates 

and is posted on a monthly basis. The 

current database includes 

approximately 435,000 entities. Thus, 

OFCCP determines that 435,000 entities 

is a reasonable representation of the 

number of entities that may be affected 

by the final rule.38 OFCCP recognizes 

that this SAM number likely results in 

an overestimation for two reasons: The 

system captures firms that do not meet 

the jurisdictional dollar thresholds for 

the three laws that OFCCP enforces, and 

it captures contractor firms for work 

performed outside the United States by 

individuals hired outside the United 

States, over which OFCCP does not have 

authority. Further, because this rule 

only applies to religious contractors, 

OFCCP is confident that this estimate 

overstates the true universe of 

contractors affected by the rule. 

OFCCP anticipates three main groups 

that potentially will be impacted: 

Religious organizations that decide to 

become federal contractors because of 

this final rule’s clarity on the scope and 

application of the religious exemption, 

religious organizations that are already 

federal contractors, and all current 

federal contractors. OFCCP is unable to 

reasonably quantify the costs, benefits, 

and transfers for these three groups of 

organizations, but provides the 

following qualitative analysis. Though 

religious organizations new to federal 

contracting will likely incur upfront 

costs and compliance costs associated 

with becoming a federal contractor, it is 

reasonable to assume they believe that 

becoming a federal contractor will 

further their goals, which will result in 

benefits to the organization (whether 

increased revenues, more financial 

stability, or better market access). In 

addition, if the new potential 

contractors are awarded government 

contracts, the government and the 

public will receive better quality or 

lower-cost services because most federal 

contracts are rewarded through 

competitive bidding which selects 

(generally speaking) either the lowest 


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cost per unit or highest quality unit at 

a specific price. As the number of 

potential federal contractors rises, the 

competitive process should result in 

better quality and prices for goods and 

services which will enhance the societal 

benefits of federal contracting. If total 

costs from contracting with the new 

organization are lower than the status 

quo, the result will be a transfer to 

taxpayers. 

Religious organizations which are 

already federal contractors will see a 

minimal cost for rule familiarization 

and compliance and will continue to 

efficiently provide services to the U.S. 

government. The clear boundaries of the 

religious exemption may permit these 

contractors to more freely seek the 

religious exemption with assurance that 

they are complying with their legal 

obligations under Executive Order 

11246, and they may revisit their 

employment practices accordingly. 

OFCCP cannot determine quantitatively 

the direction or magnitude of any 

changes in employment but believes the 

overall effects will be quite small at 

these organizations, as most employees 

at them were likely attracted to them 

because of a shared sense of religious 

mission, and extremely small when 

considering the entire contractor 

universe or the economy as a whole. On 

one hand, religious employers may feel 

more free to hire those that are not 

denominational coreligionists, given 

this final rule’s explanation, consistent 

with law, that an organization does not 

forfeit the exemption when it hires 

outside strict denominational 

boundaries, and that an organization 

may require acceptance of or adherence 

to particular religious tenets as part of 

the employment relationship regardless 

of employees’ denominational 

membership. On the other hand, given 

this clarity, religious employers may 

also feel more confident in their ability 

to hire and retain employees based on 

religious criteria. Additionally, OFCCP 

believes these assurances for religious 

organizations will result in reduced 

legal costs for both the religious 

contractors and OFCCP. 

All current federal contractors may 

face additional competition as new 

potential competitors enter the market. 

Since the total amount of available 

government contracts is not anticipated 

to change, the increased competition 

may provide better prices for the 

government, but may also result in a 

reallocation of the contracts. Should this 

occur, it is possible that revenues will 

be transferred between various 

government contractors or from current 

contractors to new entrants. 

3. Public Comments 

In this section, OFCCP addresses the 

public comments specifically received 

on the Regulatory Impact Analysis. 

One commenter, a public policy 

research and advocacy organization, 

asserted that OFCCP underestimated the 

wage rate of the employees who would 

likely review the rule. The commenter 

asserted that the employee would likely 

be an attorney rather than a human 

resource manager. The commenter 

suggested that most contractors would 

consult in-house or outside counsel to 

help with rule familiarization. The 

commenter also provided an alternate 

fully loaded hourly compensation rate 

for Lawyers (SOC 23–1011). OFCCP 

acknowledges that some contractors 

may have in-house counsel review the 

final rule. However, some contractors do 

not have in-house counsel, and their 

review will be conducted by human 

resource managers. Taking into 

consideration this comment, OFCCP has 

adjusted its wage rate to reflect review 

by either in-house counsel or human 

resource managers. 

Several commenters addressed the 

time needed for a contractor to become 

familiar with the final rule. These 

commenters asserted that the estimate of 

one half-hour was too low. One 

commenter provided no additional 

information or alternative calculation. 

The remaining two provided alternative 

estimates ranging from 1.5 hours to 2.5 

hours to become familiar with the final 

rule. OFCCP acknowledges that the 

precise amount of time each company 

will take to become familiar with 

understanding the new regulations is 

difficult to estimate. However, the 

elements that OFCCP uses in its 

calculation take into account the length 

and complexity of the final rule. The 

final rule adds definitions to the 

existing regulations implementing E.O. 

11246 and clarifies the exemption 

contained in section 204(c) of E.O. 

11246. As such, the final rule clarifies 

requirements and reduces burdens on 

contractors trying to understand their 

obligations and responsibilities of 

complying with E.O. 11246. Thus, 

OFCCP has decided to retain its initial 

estimate of one half-hour for rule 

familiarization. This estimate accounts 

for the time needed to read the final rule 

or participate in an OFCCP webinar 

about the final rule. 

Many commenters asserted that 

OFCCP did not address the potential 

costs of the final rule on employees, 

taxpayers, and minority groups, 

including LGBT individuals, women, 

and religious minorities. The 

commenters asserted that OFCCP failed 

to address the economic and noneconomic costs to employees in the 

form of lost wages and benefits, out of 

pocket medical expenses, job searches, 

and negative mental and physical health 

consequences of discrimination. Two 

commenters, a civil liberties 

organization and a labor union, 

mentioned that there are 25 states 

without explicit statutory protections 

barring employment discrimination 

based on gender identity and sexual 

orientation and asserted that workers in 

these states are not otherwise covered 

by statutory protections. The 

commenters who made these assertions 

provided no additional information or 

data to support their assertions. 

Additionally, given Bostock’s holding 

that Title VII’s prohibition on sex 

discrimination includes discrimination 

on the basis of sexual orientation and 

transgender status, these concerns seem 

lessened. 

OFCCP has reviewed these comments 

and notes that any attempt to project 

costs to employees would necessarily 

require OFCCP to speculate that certain 

workers will face discrimination only 

once this rule is finalized. Further, the 

commenters ignore the possibility that 

contractors may choose to hire 

individuals of greater religious diversity 

as a result of this rule because their 

incentive to only hire coreligionists will 

be diminished. Absent data regarding 

the number of individuals who are not 

discriminated against in the status quo 

but would be discriminated against 

when this rule is finalized, and noncoreligionist individuals who will be 

hired by a contractor as a result of this 

rule that OFCCP cannot assess the mere 

possibility that some workers could face 

different costs. Likewise, OFCCP lacks 

data for the number of new contractors 

that may enter the market and the 

number of employees that work for such 

companies. As such, OFCCP does not 

estimate the benefits to the employees of 

those new contractors. 

Commenters also said that OFCCP 

failed to address the costs to taxpayers 

in the form of a restricted labor pool, 

decreased productivity, employee 

turnover, and increased health care 

costs related to employment 

discrimination and increased social 

stigma. In addition, some commenters 

mentioned that OFCCP did not account 

for intangible costs related to reductions 

in equity, fairness, and personal 

freedom that would result from allowing 

businesses and organizations receiving 

taxpayer dollars to opt out of critical 

nondiscrimination provisions that 

protect employees based on gender 

identity and sexual orientation. The 

commenters who made these assertions 


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39BLS, Occupational Employment Statistics, 

Occupational Employment and Wages, May 2019, 

https://www.bls.gov/oes/current/oes_nat.htm. 

40BLS, Employer Costs for Employee 

Compensation, https://www.bls.gov/ncs/data.htm. 

Wages and salaries averaged $24.26 per hour 

worked in 2017, while benefit costs averaged 

$11.26, which is a benefits rate of 46%. 41Cody Rice, U.S. Environmental Protection 

Agency, ‘‘Wage Rates for Economic Analyses of the 

Toxics Release Inventory Program’’ (June 10, 2002), 

https://www.regulations.gov/document?D=EPA-HQOPPT-2014-0650-0005. 

42OFCCP believes that contractor firms that may 

be potentially affected by the rule may take more 

time to review the final rule, while contractor firms 

that may not be affected may take less time, so the 

one half-hour reflects an estimated average for all 

contractor firms. 

provided no additional information or 

data to support their assertions. Further, 

the commenters provide no additional 

support for their assertion that the rule 

will increase costs to taxpayers and 

ignore the possibility that the rule will 

expand the pool of federal contractors, 

thereby saving taxpayers money. 

Similarly, several commenters 

addressed the potential impact of the 

rule on state and local governments. 

Three commenters, a city attorney, a 

state’s attorney, and a civil liberties and 

human rights legal advocacy 

organization, mentioned that state and 

local governments may lose important 

tax revenue if people relocate or choose 

to withdraw from the workforce because 

of the final rule. Another commenter 

mentioned that state and local 

governments that serve victims of 

discrimination will need to contribute 

to, provide, and administer more public 

benefits programs for vulnerable 

populations. These comments are 

assume that the rule will impose costs 

on workers and that those costs will in 

turn be imposed upon the communities 

in which those workers live. None of 

these commenters provided additional 

information or data to support their 

statements. 

One individual commenter asserted 

that OFCCP did not properly determine 

the rule’s economic significance. The 

commenter asserted that the Regulatory 

Impact Analysis in the NPRM did not 

take into account ‘‘the actual monetary 

impact of the regulation.’’ Using all 

available information and data, OFCCP 

has addressed the quantifiable and 

qualitative costs and benefits of this 

final rule as required. It provides an 

assessment of the costs associated with 

rule familiarization and concludes that 

the addition of definitions and 

clarification of an exemption do not 

create additional burdens for the 

regulated community. As stated in the 

preamble, the intent of the final rule is 

to clarify the scope of the religious 

exemption and promote consistency in 

OFCCP’s administration of it. The 

commenter also asserted that OFCCP 

did not account for the impact on larger 

contractors. The Regulatory Flexibility 

Act requires agencies to consider the 

impact of a regulation on a wide range 

of small entities, including small 

businesses, nonprofit organizations, and 

small governmental jurisdictions. It 

does not address larger corporations. 

However, OFCCP’s assessment reflects 

that it does not anticipate any costs 

beyond rule familiarization for 

contractors. 

Taking the Regulatory Impact 

Analysis comments into consideration, 

OFCCP has assessed the costs and 

benefits of the final rule as follows. 

OFCCP believes that either a Human 

Resource Manager (SOC 11–3121) or a 

Lawyer (SOC 23–1011) would review 

the final rule. OFCCP estimates that 

50% of the reviewers would be human 

resource managers and 50% would be 

in-house counsel. Thus, the mean 

hourly wage rate reflects a 50/50 split 

between human resource managers and 

lawyers. The mean hourly wage of 

human resource managers is $62.29 and 

the mean hourly wage of lawyers is 

$69.86.39 Therefore, the average hourly 

wage rate is $66.08 (($62.29 + $69.86)/ 

2). OFCCP adjusted this wage rate to 

reflect fringe benefits such as health 

insurance and retirement benefits, as 

well as overhead costs such as rent, 

utilities, and office equipment. OFCCP 

used a fringe benefits rate of 46%40 and 

an overhead rate of 17%,41 resulting in 

a fully loaded hourly compensation rate 

of $107.71 ($66.08 + ($66.08 × 46%) + 

($66.08 × 17%)). 

TABLE 1—LABOR COST

Major occupational groups 

Average 

hourly wage 

rate 

Fringe benefit 

rate 

(%) 

Overhead 

rate 

(%) 

Fully loaded 

hourly 

compensation 

Human Resources Managers and Lawyers .................................................... $66.08 46 17 $107.71 

4. Cost of Regulatory Familiarization 

OFCCP acknowledges that 5 CFR 

1320.3(b)(1)(i) requires agencies to 

include in the burden analysis the 

estimated time it will take for 

contractors to review and understand 

the instructions for compliance. In order 

to minimize the burden, OFCCP will 

publish compliance assistance 

materials, such as fact sheets and 

answers to frequently asked questions. 

OFCCP may also host webinars for 

interested persons that describe the new 

regulations and conduct listening 

sessions to identify any specific 

challenges contractors believe they face, 

or may face, when complying with the 

new regulations. OFCCP notes that such 

informal compliance guidance is not 

binding. 

OFCCP believes that human resource 

managers or lawyers at each contractor 

firm would be the employees 

responsible for understanding the new 

regulations. OFCCP further estimates 

that it will take a minimum of one halfhour for a human resource professional 

or lawyer at each contractor firm to read 

the rule, read the compliance assistance 

materials provided by OFCCP, or 

participate in an OFCCP webinar to 

learn the new requirements.42

Consequently, the estimated burden for 

rule familiarization would be 217,500 

hours (435,000 contractor firms × 1⁄2

hour). OFCCP calculates the total 

estimated cost of rule familiarization as 

$23,426,925 (217,500 hours × $107.71/ 

hour) in the first year, which amounts 

to a 10-year annualized cost of 

$2,666,359 at a discount rate of 3% 

(which is $6.13 per contractor firm) or 

$3,117,259 at a discount rate of 7% 

(which is $7.17 per contractor firm). 

TABLE 2—REGULATORY FAMILIARIZATION COSTS

Total number of contractors ............................................................................................................................................................. 435,000. 

Time to review rule ........................................................................................................................................................................... 30 minutes. 


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TABLE 2—REGULATORY FAMILIARIZATION COSTS—Continued 

Human resources manager and lawyer fully loaded hourly compensation ..................................................................................... $107.71. 

Regulatory familiarization cost .......................................................................................................................................................... $23,426,925. 

Annualized cost with 3% discounting ............................................................................................................................................... $2,666,359. 

Annualized cost per contractor with 3% discounting ....................................................................................................................... $6.13. 

Annualized cost with 7% discounting ............................................................................................................................................... $3,117,259. 

Annualized cost per contractor with 7% discounting ....................................................................................................................... $7.17. 

5. Cost Savings 

OFCCP expects that contractors 

impacted by the rule will experience 

cost savings. Specifically, the clarity 

provided in the new definitions and the 

interpretation provided will reduce the 

risk of noncompliance to contractors 

and the potential legal costs that 

findings of noncompliance with 

OFCCP’s requirements might impose. 

One mass mail campaign of commenters 

asserted that allowing religious 

organizations to continue to provide a 

variety of services, such as assisting 

victims of sexual abuse, the hungry, and 

the homeless, is effective because it 

saves taxpayer dollars through 

contracting instead of expanding 

government bureaucracy. 

Some commenters argued that the 

rule will decrease clarity and will thus 

increase costs for contractors, especially 

if those contractors believe their 

obligations under the EEOC conflict 

with their obligations under the final 

rule. First, OFCCP believes that the E.O. 

11246 nondiscrimination obligations it 

enforces remain in force and that the 

rule is sufficiently consistent with Title 

VII case law and principles and that it 

will promote consistency in 

administration. Second, even assuming 

for purposes of this analysis that 

contractors’ obligations under EEOC and 

E.O. 11246 differ (e.g., that the 

exemption in E.O. 11246 permits an 

action forbidden under the EEOC’s view 

of Title VII), a contractor remains 

obligated to abide by Title VII and any 

exemption from E.O. 11246 simply 

prevents additional liability before 

OFCCP for the same action. 

Accordingly, only those contractors that 

wish to rely on the E.O. 11246 

exemption need consider it, and we 

expect that the additional costs incurred 

by such organizations to understand the 

exemption beyond their existing 

compliance costs will be minimal. 

6. Benefits 

E.O. 13563 recognizes that some rules 

have benefits that are difficult to 

quantify or monetize but are important, 

and states that agencies may consider 

such benefits. This final rule improves 

equity and fairness by giving contractors 

clear guidance on the scope and 

application of the religious exemption 

to E.O. 11246. It also increases religious 

freedom for religious employers. 

The final rule increases clarity for 

federal contractors. This impact most 

likely yields a benefit to taxpayers (if 

contractor fees decrease because they do 

not need to engage third-party 

representatives to interpret OFCCP’s 

requirements). While some commenters 

expressed concern that the rule was not 

clear, OFCCP believes that the rule is 

sufficiently consistent with Title VII 

case law and principles and that it will 

promote consistency in administration. 

Furthermore, by increasing clarity for 

both contractors and for OFCCP 

enforcement, the final rule may reduce 

the number and costs of enforcement 

proceedings by making it clearer to both 

sides at the outset what is required 

under the regulations. This would also 

most likely represent a benefit to 

taxpayers (since fewer resources would 

be spent in OFCCP administrative 

litigation). 

OFCCP notes that some commenters 

asserted that OFCCP did not provide 

evidence that faith-based organizations 

have been reluctant to contract with the 

federal government because of the lack 

of certainty about the religious 

exemption. The fact that some small 

number of faith-based organizations 

have been willing to enter into federal 

contracts does not mean that other faithbased organizations have not been 

reluctant to do so. OFCCP believes that 

providing clarity to the religious 

exemption currently included under 

E.O. 11246 will promote clarity and 

certainty for all contractors. Moreover, a 

few commenters confirmed OFCCP’s 

observation that religious organizations 

have been reluctant to participate as 

federal contractors because of the lack of 

clarity or perceived narrowness of the 

E.O. 11246 religious exemption. One 

individual commenter described his 

experience with religious organizations’ 

reluctance to contract or subcontract 

with the federal government, and two 

other commenters offered examples or 

evidence of religious organizations’ 

reluctance to participate in other 

contexts, such as federal grants. Thus, 

OFCCP expects that the number of new 

contractors may increase because 

religious entities may be more willing to 

contract with the government after the 

religious exemption is clarified. 

A further benefit of this rule would be 

that some religious contractors will 

increase the diversity of their workforce. 

Under some prior interpretations, the 

religious exemption was only provided 

to contractors who hired co-religionists 

(e.g., a Catholic company hiring only 

Catholics; a Latter-day Saint contractor 

hiring only Latter-day Saints; etc.) and 

thus religious contractors were 

incentivized to limit their hiring to only 

co-religionists. Once this rule is 

finalized, such religious contractors will 

no longer be required to limit their 

hiring. The likely outcome of this 

change is that the workforces of 

religious employers will become more 

diverse. 

B. Regulatory Flexibility Act and 

Executive Order 13272 (Consideration 

of Small Entities) 

The agency did not receive any public 

comments on the Regulatory Flexibility 

Analysis. 

The Regulatory Flexibility Act of 1980 

(RFA), 5 U.S.C. 601 et seq., establishes 

‘‘as a principle of regulatory issuance 

that agencies shall endeavor, consistent 

with the objectives of the rule and 

applicable statutes, to fit regulatory and 

informational requirements to the scale 

of the businesses, organizations, and 

governmental jurisdictions subject to 

regulation.’’ Public Law 96–354, 2(b). 

The RFA requires agencies to consider 

the impact of a regulation on a wide 

range of small entities, including small 

businesses, nonprofit organizations, and 

small governmental jurisdictions. 

Agencies must review whether a final 

rule would have a significant economic 

impact on a substantial number of small 

entities. See 5 U.S.C. 603. If the rule 

would, then the agency must prepare a 

regulatory flexibility analysis as 

described in the RFA. See id. However, 

if the agency determines that the rule 

would not be expected to have a 

significant economic impact on a 

substantial number of small entities, 

then the head of the agency may so 

certify and the RFA does not require a 

regulatory flexibility analysis. See 5 

U.S.C. 605. The certification must 

provide the factual basis for this 

determination. 


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OFCCP does not expect the final rule 

to have a significant economic impact 

on a substantial number of small entities 

and does not believe the final rule has 

any recurring costs. The regulatory 

familiarization cost discounted at a 7% 

rate of $50.33 per contractor or $7.17 

annualized is a de minimis cost. 

Therefore, the first year and annualized 

burdens as a percentage of the smallest 

employer’s revenue would be far less 

than 1%. Accordingly, OFCCP certifies 

that the final rule would not have a 

significant economic impact on a 

substantial number of small entities. 

That is consistent with the Department’s 

analysis in the NPRM. 

C. Paperwork Reduction Act 

The Paperwork Reduction Act of 1995 

requires that OFCCP consider the 

impact of paperwork and other 

information collection burdens imposed 

on the public. See 44 U.S.C. 3507(d). An 

agency may not collect or sponsor the 

collection of information or impose an 

information collection requirement 

unless the information collection 

instrument displays a currently valid 

OMB control number. See 5 CFR 

1320.5(b)(1). 

OFCCP has determined that there is 

no new requirement for information 

collection associated with this final 

rule. The final rule provides definitions 

and a rule of construction to clarify the 

scope and application of current law. 

The information collections contained 

in the existing E.O. 11246 regulations 

are currently approved under OMB 

Control Number 1250–0001 

(Construction Recordkeeping and 

Reporting Requirements) and OMB 

Control Number 1250–0003 

(Recordkeeping and Reporting 

Requirements—Supply and Service). 

Consequently, this final rule does not 

require review by the Office of 

Management and Budget under the 

authority of the Paperwork Reduction 

Act. 

D. Unfunded Mandates Reform Act of 

1995 

For purposes of the Unfunded 

Mandates Reform Act of 1995, 2 U.S.C. 

1532, this final rule does not include 

any federal mandate that may result in 

excess of $100 million in expenditures 

by state, local, and tribal governments in 

the aggregate or by the private sector. 

E. Executive Order 13132 (Federalism) 

OFCCP has reviewed this final rule in 

accordance with Executive Order 13132 

regarding federalism. OFCCP recognizes 

that there may be some existing costs 

that may shift from the federal 

government to state or local 

governments; however, the agency 

believes that these effects will be neither 

direct nor substantial. Thus, OFCCP has 

determined that it does not have 

‘‘federalism implications.’’ This rule 

will not ‘‘have substantial direct effects 

on the States, on the relationship 

between the national government and 

the States, or on the distribution of 

power and responsibilities among the 

various levels of government.’’ 

F. Executive Order 13175 (Consultation 

and Coordination With Indian Tribal 

Governments) 

This final rule does not have tribal 

implications under Executive Order 

13175 that would require a tribal 

summary impact statement. The final 

rule will not ‘‘have substantial direct 

effects on one or more Indian tribes, on 

the relationship between the Federal 

Government and Indian tribes, or on the 

distribution of power and 

responsibilities between the Federal 

Government and Indian tribes.’’ 

List of Subjects in 41 CFR Part 60–1 

Civil rights, Employment, Equal 

employment opportunity, Government 

contracts, Government procurement, 

Investigations, Labor, and Reporting and 

recordkeeping requirements. 

Craig E. Leen, 

Director, OFCCP. 

For the reasons set forth in the 

preamble, OFCCP revises 41 CFR part 

60–1 as follows: 

PART 60–1—OBLIGATIONS OF 

CONTRACTORS AND 

SUBCONTRACTORS 

■ 1. The authority citation for part 60– 

1 continues to read as follows: 

Authority: Sec. 201, E.O. 11246, 30 FR 

12319, 3 CFR, 1964–1965 Comp., p. 339, as 

amended by E.O. 11375, 32 FR 14303, 3 CFR, 

1966–1970 Comp., p. 684, E.O. 12086, 43 FR 

46501, 3 CFR, 1978 Comp., p. 230, E.O. 

13279, 67 FR 77141, 3 CFR, 2002 Comp., p. 

258 and E.O. 13672, 79 FR 42971. 

■ 2. Amend § 60–1.3 by 

■ a. Adding in alphabetical order the 

definitions of ‘‘Particular religion,’’ 

‘‘Religion,’’ ‘‘Religious corporation, 

association, educational institution, or 

society,’’ and ‘‘Sincere,’’ and 

■ b. Adding paragraph (a) and adding 

and reserving paragraph (b). 

The revisions read as follows: 

§ 60–1.3 Definitions. 

* * * * * 

Particular religion means the religion 

of a particular individual, corporation, 

association, educational institution, 

society, school, college, university, or 

institution of learning, including 

acceptance of or adherence to sincere 

religious tenets as understood by the 

employer as a condition of employment, 

whether or not the particular religion of 

an individual employee or applicant is 

the same as the particular religion of his 

or her employer or prospective 

employer. 

* * * * * 

Religion includes all aspects of 

religious observance and practice, as 

well as belief. 

* * * * * 

Religious corporation, association, 

educational institution, or society. (1) 

Religious corporation, association, 

educational institution, or society 

means a corporation, association, 

educational institution, society, school, 

college, university, or institution of 

learning that: 

(i) Is organized for a religious 

purpose; 

(ii) Holds itself out to the public as 

carrying out a religious purpose; 

(iii) Engages in activity consistent 

with, and in furtherance of, that 

religious purpose; and 

(iv)(A) Operates on a not-for-profit 

basis; or 

(B) Presents other strong evidence that 

its purpose is substantially religious. 

(2) Whether an organization’s 

engagement in activity is consistent 

with, and in furtherance of, its religious 

purpose is determined by reference to 

the organization’s own sincere 

understanding of its religious tenets. 

(3) To qualify as religious a 

corporation, association, educational 

institution, society, school, college, 

university, or institution of learning 

may, or may not: Have a mosque, 

church, synagogue, temple, or other 

house of worship; or be supported by, 

be affiliated with, identify with, or be 

composed of individuals sharing, any 

single religion, sect, denomination, or 

other religious tradition. 

(4) The following examples apply this 

definition to various scenarios. It is 

assumed in each example that the 

employer is a federal contractor subject 

to Executive Order 11246. 

(i)(A) Example. A closely held forprofit manufacturer makes and sells 

metal candlesticks and other decorative 

items. The manufacturer’s mission 

statement asserts that it is committed to 

providing high-quality candlesticks and 

similar items to all of its customers, a 

majority of which are churches and 

synagogues. Some of the manufacturer’s 

items are also purchased by federal 

agencies for use during diplomatic 

events and presentations. The 

manufacturer regularly consults with 


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79372 Federal Register / Vol. 85, No. 237 / Wednesday, December 9, 2020 / Rules and Regulations 

ministers and rabbis regarding new 

designs to ensure that they conform to 

any religious specifications. The 

manufacturer also advertises heavily in 

predominantly religious publications 

and donates a portion of each sale to 

charities run by churches and 

synagogues. 

(B) Application. The manufacturer 

likely does not qualify as a religious 

organization. Although the 

manufacturer provides goods 

predominantly for religious 

communities, the manufacturer’s 

fundamental purpose is secular and 

pecuniary, not religious, as evidenced 

by its mission statement. Because the 

manufacturer lacks a religious purpose, 

it cannot carry out activity consistent 

with that (nonexistent) religious 

purpose. And while the manufacturer 

advertises heavily in religious 

publications and consults with religious 

functionaries on its designs, the 

manufacturer does not identify itself, as 

opposed to its customers, as religious. 

Finally, given that the manufacturer is 

a for-profit entity, it would need to 

make a strong evidentiary showing that 

it is a religious organization, which it 

has not. 

(ii)(A) Example. A nonprofit 

organization enters government 

contracts to provide chaplaincy services 

to military and federal law-enforcement 

organizations around the country. The 

contractor is organized as a non-profit, 

but it charges the military and other 

clients a fee, similar to fees charged by 

other staffing organizations, and its 

manager and employees all collect a 

market-rate salary. The organization’s 

articles of incorporation state that its 

purpose is to provide religious services 

to members of the same faith wherever 

they may be in the world, and to 

educate other individuals about the 

faith. Similar statements of purpose 

appear on the organization’s website 

and in its bid responses to government 

requests for proposals. All employees 

receive weekly emails, and occasionally 

videos, about ways to promote faith in 

the workplace. The employee handbook 

contains several requirements regarding 

personal and workplace conduct to 

ensure ‘‘a Christian atmosphere where 

the Spirit of the Lord can guide the 

organization’s work.’’ 

(B) Application. Under these facts, the 

contractor likely qualifies as a religious 

organization. The contractor’s 

organizing documents expressly state 

that its mission is primarily religious in 

nature. Moreover, the contractor 

exercises religion through its business 

activities, which is providing 

chaplaincy services, and through its 

hiring and training practices. Through 

its emails and other communications, 

the contractor holds itself out as a 

religious organization to its employees, 

applicants, and clients. Finally, 

notwithstanding that the contractor 

collects a placement fee similar to 

nonreligious staffing companies, it is 

organized as a non-profit. 

(iii)(A) Example. A small catering 

company provides kosher meals 

primarily to synagogues and for various 

events in the Jewish community, but 

other customers, including federal 

agencies, sometimes hire the caterer to 

provide meals for conferences and other 

events. The company’s two owners are 

Hasidic Jews and its six employees, 

while not exclusively Jewish, receive 

instruction in kosher food preparation 

to ensure such preparation comports 

with Jewish laws and customs. This 

additional work raises the company’s 

operating costs higher than were it to 

provide non-kosher meals. The 

company’s mission statement, which 

has remained substantially the same 

since the company was organized, 

describes its purpose as fulfilling a 

religious mandate to strengthen the 

Jewish community and ensure Jewish 

persons can participate fully in public 

life by providing kosher meals. The 

company’s ‘‘about us’’ page on its 

website states that above all else, the 

company seeks to ‘‘honor G-d’’ and 

maintain the strength of the Jewish 

religion through its kosher meal 

services. The company also donates a 

portion of its proceeds to charitable 

projects sponsored by local Jewish 

congregations. In its advertising and on 

its website, the company prominently 

includes religious symbols and text. 

(B) Application. The company likely 

qualifies as a religious organization. The 

company’s mission statement and other 

materials show a religious purpose. Its 

predominant business activity of 

providing kosher meals directly furthers 

and is wholly consistent with that selfidentified religious purpose, as are its 

hiring and training practices. Through 

its advertising and website, the 

company holds itself out as a religious 

organization. Finally, although the 

company operates on a for-profit basis, 

the other facts here show strong 

evidence that the company operates as 

a religious organization. 

(iv)(A) Example. A for-profit collector 

business sells a wide variety of artistic, 

cultural, religious, and archeological 

items. The government purchases some 

of these from time to time for research 

or aesthetic purposes. The business’s 

mission statement provides that its 

purpose is to curate the world’s 

treasures to perpetuate its historic, 

cultural, and religious legacy. Most of 

the business’s customers are private 

individuals or museums interested in 

the items as display pieces or for their 

cultural value. The business’s marketing 

materials include examples of religious 

iconography and artifacts from a variety 

of world religions, as well as various 

cultural and artistic items. 

(B) Application. The business likely 

does not qualify as a religious 

organization. Its mission statement 

references an arguably religious 

purpose, namely perpetuating the 

world’s religious legacy, but in context 

that appears to have more to do with 

religion’s historic value rather than 

evidencing a religious conviction of the 

business or its owner. Similarly, it is at 

best unclear whether the business is 

engaging in activities in furtherance of 

this purpose when most of its sales 

serve no religious purpose. Finally, 

while the business displays some 

religious items, these appear to be a 

minor part of the business’s overall 

presentation and do not convey that the 

business has a religious identity. The 

factors to qualify as a religious 

organization do not appear to be met, 

especially given that the business as a 

for-profit entity would need to make a 

strong evidentiary showing that it is a 

religious organization. 

* * * * * 

Sincere means sincere under the law 

applied by the courts of the United 

States when ascertaining the sincerity of 

a party’s religious exercise or belief. 

* * * * * 

(a) Severability. Should a court of 

competent jurisdiction hold any 

provision(s) of this section to be invalid, 

such action will not affect any other 

provision of this section. 

(b) [Reserved] 

■ 3. Amend § 60–1.5 by adding 

paragraphs (e) and (f) to read as follows: 

§ 60–1.5 Exemptions. 

* * * * * 

(e) Broad interpretation. This subpart 

shall be construed in favor of a broad 

protection of religious exercise, to the 

maximum extent permitted by the U.S. 

Constitution and law, including the 

Religious Freedom Restoration Act of 

1993, as amended, 42 U.S.C. 2000bb et 

seq. 

(f) Severability. Should a court of 

competent jurisdiction hold any 

provision(s) of this section to be invalid, 

such action will not affect any other 

provision of this section. 

[FR Doc. 2020–26418 Filed 12–8–20; 8:45 am] 

BILLING CODE 4510–45–P 


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