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Trump Administration Issues Directive Authorizing Federal Contractors to Discriminate Based on Religious Beliefs

Posted on: August 14th, 2018 by Art Leonard No Comments

Acting Director Craig E. Leen of the Office of Federal Contract Compliance Programs (OFCCP), an agency within the U.S. Department of Labor that is responsible for enforcing the non-discrimination policies with which federal contractors must comply, issued a “Directive” to agency staff and federal contractors on August 10, construing three recent Supreme Court decisions and two Trump Executive Orders to allow contractors to discriminate in carrying out their contracts based on their religious beliefs.

The first decision cited by Leen is Masterpiece Cakeshop v. Colorado Civil Rights Commission, the Supreme Court’s June 4, 2018, ruling that reversed a lower court decision against a Denver-area baker who refused to make a wedding cake for a same-sex couple. The Supreme Court did not rule in Masterpiece Cakeshop that businesses have a general right to deny services to gay couples based on the owners’ religious beliefs, however.  The Court finessed that issue, finding instead that the lower court’s ruling had to be reversed because the Court discerned evidence that the Colorado Civil Rights Commission had exhibited overt hostility to religion in its treatment of baker Jack Phillips, who refused to bake a wedding cake for a same-sex couples based on his religious objections to same-sex marriage.  The evidence for this “hostility” boiled down to public statements by two commissioners, one of whom accurately summarized the legal rule that religious beliefs do not excuse a business from complying with state anti-discrimination law, and the other characterizing as “ugly” the use of religion to justify discrimination.  Justice Anthony Kennedy’s decision for the Court emphasized that generally businesses do not enjoy a right to discriminate based on the owners’ religious beliefs, and that a “neutral forum” free of overt hostility to religion could enforce the anti-discrimination laws against a religious objector.

Kennedy’s ruling also contended that Phillips could have believed he was entitled to decline the business because, at the time, same-sex marriages were not allowed or recognized in Colorado, and that the Commission had evinced hostility to religion by dismissing charges brought by a man who was turned down by several bakers who refused his request to make cakes decorated with religiously-based anti-gay scriptural quotes and slogans. The Court’s majority apparently believed the Commission was insufficiently evenhanded in dealing with cases involving religious views.

But Leen’s directive, consistent with two Trump Executive Orders and a Memorandum issued last fall by Attorney General Jeff Sessions, reorients the issue as “discrimination” against religious individuals when they are required to comply with non-discrimination requirements that conflict with their religious beliefs. “Recent court decisions have addressed the broad freedoms and anti-discrimination protections that must be afforded religion-exercising organizations and individuals under the United States Constitution and federal law,” he wrote, painting individuals and businesses who want their religious beliefs to take priority over any contrary legal obligations as “victims.”

Twisting recent Supreme Court opinions to support this assertion, Leen summarized Masterpiece Cakeshop as holding that “the government violates the Free Exercise clause when its decisions are based on hostility to religion or a religious viewpoint.” He summarized Trinity Lutheran Church of Columbia, In., v. Comer (2017), in which the Court held that a state could not categorically disqualify religious organizations from receiving state funds for non-religious purposes, as holding that 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.”  That case involved the state’s denial of funds to a religious school for repaving its playground, based on a state constitutional provision against providing taxpayer money to religious institutions.  Finally, Leen summarized the Supreme Court’s notorious Burwell v. Hobby Lobby ruling (2014), a 5-4 decision, as holding that “the Religious Freedom Restoration Act applies to federal regulation of the activities of for-profit closely held corporations.”   That case involved a demand by a business corporation owned by a small group of devout Catholics that they should not have to provide contraception coverage for their employees as required by regulations under the Affordable Care Act.  Very few federal contractors subject to federal anti-discrimination rules, which apply only to substantial federal contracts, are “closely held corporations,” so that characterization of RFRA does not seem particularly applicable to the cases where this Directive is likely to be implicated.

Leen also cited Trump’s Executive Order 13831, which states, “The executive branch wants faith-based and community organizations, to the fullest opportunity permitted by law, to compete on a level playing field for grants, contracts, programs and other Federal funding opportunities,” and Trump’s Executive Order 13798, which says, “It shall be the policy of the executive branch to vigorously enforce Federal law’s robust protections for religious freedom. The Founders envisioned a Nation in which religious voices and views were integral to a vibrant public square, and in which religious people and institutions were free to practice their faith without fear of discrimination or retaliation by the Federal Government. . .  Federal law protects the freedom of Americans and their organizations to exercise religion and participate fully in civic life without undue interference by the Federal Government.”  Sessions’ memorandum ran with these directives, asserting that the government should generally refrain from enforcing federal laws against people and businesses that have religious objections to complying with them.

The Directive instructs the OFCCP staff and notifies federal contractors that, in essence, they can discriminate in employing people or providing services under federal contracts if they are doing so based on their religious beliefs. The Supreme Court arguably opened the door to this kind of thinking in the Hobby Lobby and Trinity Lutheran cases, but it is rather a stretch to cite Masterpiece Cakeshop for this purpose, in light of Justice Kennedy’s invocation of Newman v. Piggie Park Enterprises, a 1968 case that held that a southern barbecue restaurant chain could not refuse to serve black customers based on the owner’s religious belief in racial segregation, as well as Employment Division v. Smith, a 1990 case that held that people do not enjoy a Free Exercise right to refuse to comply with state laws of general application that are on their face neutral with respect to religion.

Writing for the Court in Employment Division, Justice Antonin Scalia suggested that allowing individuals to claim exemptions from the law based on their individual religious beliefs unless the government could prove that it had a compelling interest was not required by the First Amendment. “Any society adopting such a system would be courting anarchy, but that danger increases in direct proportion to the society’s diversity of religious beliefs, and its determination to coerce or suppress none of them,” he wrote.  Although the Court’s holding was unanimous in that case, four justices concurred in an opinion arguing that Scalia had gone too far in contending, for a majority of the Court, that there was no need for the government to show there was an important government interest that justified burdening an individual’s free exercise of religion – in that case, a Native American who was denied unemployment benefits when he was fired after he flunked the employer’s drug test due to his ritual use of peyote.

Enforcing religiously-neutral anti-discrimination rules is not “hostility to religion” by the government. It is undertaken to prevent categorical discrimination against applicants and employees or those seeking government-funded benefits or services, because of their personal characteristics, such as race, national origin, sex or sexual orientation.  Notably, the federal laws and regulations that OFCCP is supposed to enforce do not apply to government contractors that are religious corporations or associations or religious educational institutions, “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.”

This “Directive” is not a regulation adopted in accordance with the requirements of the Administrative Procedure Act, and Justice Alito’s opinion for the Court in Hobby Lobby, responding to concerns raised by Justice Ruth Bader Ginsburg in her dissenting opinion, denied that the Religious Freedom Restoration Act could be invoked as a defense in an employment discrimination case. How this will all play out if OFCCP refuses to hold contractors to their non-discrimination requirements in situations involving LGBT victims of religiously-motivated discrimination is yet to be seen, but the portents are not good in light of Trump’s nomination of Brett Kavanaugh to the Supreme Court, where, if confirmed, he would join the conservative majority in place of Justice Kennedy.  It is also worth noting that in his concurring opinion in Masterpiece Cakeshop, Justice Neil Gorsuch, Trump’s first Supreme Court nominee, implied that the Court should reconsider its holding in Employment Division v. Smith.

Hawaii Appeals Court Says Religious B&B Owner May Not Reject Same-Sex Couples as Customers

Posted on: February 24th, 2018 by Art Leonard No Comments

Hawaii Appeals Court Says Religious B&B Owner May Not Reject Same-Sex Couples as Customers

The Intermediate Court of Appeals of Hawaii has affirmed a ruling by the state’s 1st Circuit Court that the operator of an owner-occupied Bed & Breakfast violated the state’s public accommodations law by refusing to rent a room to a lesbian couple from California who were seeking vacation accommodations.  The opinion for a three-judge panel of the court by Chief Judge Craig Nakamura rejected the defendant’s argument that this application of the law violates her constitutional rights, and also rejected an argument that because the B&B is owner-occupied it is entitled to an exemption under a law governing residential real estate transactions.  Cervelli v. Aloha Bed & Breakfast, No. CAAP-13-0000806 (Feb. 23, 2018).

Diane Cervelli emailed Aloha Bed & Breakfast to determine whether a room was available for a planned vacation trip, then following up in a phone call with the owner, Phyllis Young, about making a room reservation for herself and her partner, Taeko Bufford.  Everything went well on the telephone until Cervelli mentioned that she was reserving for herself and another woman.  Young asked if Cervelli and the other woman were lesbians.  When Cervelli answered “Yes,” Young said, “We’re strong Christians.  I’m very uncomfortable in accepting the reservation from you.”  Young hung up on Cervelli.  Bufford then called and received the same treatment.  “Apart from Plaintiff’s sexual orientation,” wrote Judge Nakamura, “there was no other reason for Young’s refusal to accept Plaintiffs’ request for a room.”

Each of the women filed a complaint with the Hawaii Civil Rights Commission, alleging a violation of the state’s public accommodations law.  The Commission found “reasonable cause” to believe that Aloha B&B had violated the statute, but bowed to the plaintiffs’ desire to file a court action rather than pursue the matter administratively, issuing them a “right to sue letter.”  After the lawsuit was filed in the Circuit Court, the Commission intervened as a co-plaintiff.

The law’s definition of “public accommodation” includes “an inn, hotel, motel, or other establishment that provides lodging to transient guests,” and lists “sexual orientation” as a prohibited ground for discrimination. A different statute, governing residential leases, provides an exemption from anti-discrimination requirements for “the rental of a room or up to four rooms in a housing accommodation by an owner or lessor if the owner or lessor resides in the housing accommodation.”  Aloha B&B argued that it was entitled to the owner-occupied premises exemption, but both the circuit court and the court of appeals disagreed.  They found that the exemption was intended to govern residential leases creating a landlord-tenant relationship in which the tenant moves in and resides in the premises for an extended period of time, not for “transient” customers who generally stay for a few days at best and are not establishing their residence in the rented rooms.

The court said that it was “clear based on the plain statutory language that Aloha B&B is a ‘place of public accommodation,’” and noted that the defendant had admitted in its pretrial statement that “it offers bed and breakfast services to the general public.” Reviewing the defendant’s advertising practices, and the data showing that the overwhelming majority of its customers – running up to 100 or more individuals a year – stay for only a few days, the court found Aloha’s claimed exemption inapplicable.  The court noted that Aloha generally rented rooms to anybody who applied, denying services only to gay people and smokers.

Aloha raised three constitutional defenses.

First, it argued that requiring it to rent a room to this lesbian couple violated Young’s right of privacy. “Aloha B&B argues that the right of privacy is ‘the right to be left alone,’” wrote Judge Nakamura.  “However, to the extent that Young has chosen to operate her bed and breakfast business from her home, she has voluntarily given up the right to be left alone.  In choosing to operate Aloha B&B from her home, Young, for commercial purposes, has opened up her home to over one hundred customers per year, charging them money for access to her home.  Indeed, the success of Aloha B&B’s business and its profits depend on members of the general public entering Young’s home as customers.  In other words, the success of Aloha B&B’s business required that Young not be left alone.”

“The privacy right implicated by this case is not the right to exclude others from a purely private home,” continued Nakamura, “but rather the right of a business owner using her home as a place of public accommodation to use invidious discrimination to choose which customers the business will serve. We conclude that Young’s asserted right to privacy did not entitle her to refuse to provide Plaintiffs with lodging based on their sexual orientation.”

Next, Young claimed a violation of her right of “intimate association,” but the court rejected this claim as well. “The relationship between Aloha B&B and the customers to whom it provides transient lodging is not the type of intimate relationship that is entitled to constitutional protection against a law designed to prohibit discrimination in public accommodations,” wrote Nakamura, again taking note of the large volume of customers passing through the premises for short stays over the course of a year.  “The hundreds of customer relationships Aloha B&B forms through its business is far from the ‘necessarily few’ family-type relationships that are subject to constitutional protection,” he wrote.  “With respect to the purpose for which the relationship is formed, Aloha B&B forms relationships with its customers for commercial, business purposes, and it is only the commercial aspects of the relationship” that the public accommodations law regulates.

Young had testified that the “primary purpose” of the B&B is to “make money,” wrote Nakamura, and, “She also admitted that if she could not make money by running Aloha B&B, she ‘wouldn’t operate it.’ Young does not operate Aloha B&B for the purpose of developing ‘deep attachments and commitments’ to its customers.”

Finally, Young made a “free exercise of religion” claim. This was doomed to fail under the federal Constitution, since the Supreme Court has held that individuals and businesses do not enjoy a constitutional exemption from complying with a “valid and neutral law of general applicability on the ground that the law proscribes (or prescribes) conduct that his religion prescribe (or proscribes).”  See Employment Division v. Smith, 494 U.S. 872 (1990).  Thus, Young sought instead to locate her argument in the Hawaii constitution, arguing that the court should depart from federal constitutional precedents and “impose a compelling state interest requirement, and apply strict scrutiny in deciding its free exercise claim under the Hawaii Constitution.”

The court was unwilling to take the bait, stating, “We need not decide whether a higher level of scrutiny should be applied to a free exercise claim under the Hawaii Constitution than the United States Constitution. This is because we conclude that [the public accommodations law] satisfies even strict scrutiny as applied to Aloha B&B’s free exercise claim.”  That is, the court concluded that the state of Hawaii “has a compelling interest in prohibiting discrimination in public accommodations,” and that the law is “narrowly tailored to achieve Hawaii’s compelling interest” in prohibiting such discrimination.

The court’s ruling affirmed the circuit court’s decision granting summary judgment in favor of the plaintiffs and the Civil Rights Commission on the liability phase of the case. Unless the case goes up to the Hawaii Supreme Court, the next step would be to send it back to the circuit court for a determination of damages for the plaintiffs.

The plaintiffs are represented by Lambda Legal staff attorney Peter C. Renn and local Hawaii counsel Jay Handlin and Linsay N. McAneeley of Carlsmith Ball LLP. Robin Wurtzel, Shirley Naomi Garcia and April L. Wilson-South represented the Civil Rights Commission in the case.  And, no surprise, Aloha B&B is represented by attorneys from Alliance Defending Freedom, a litigation organization that opposed LGBT rights at every opportunity.