The Labor Department has rescinded a rule adopted in the final days of the Trump administration that expanded a religious exemption from anti-discrimination laws for federal contractors. The 2021 rule had broadened the exemption to cover any employers who “hold themselves out to the public as carrying out a religious purpose,” a move that was criticized by civil rights groups. The previous exemption, which only allowed churches and their affiliates to hire members of their religion, has been restored.
Critics of the Trump-era rule, including LGBTQ advocacy groups, warned that it would open the door to discrimination based on protected traits such as race and sex. In 2014, the Labor Department had banned contractors from discriminating against workers on the basis of sexual orientation and gender identity. Jenny Yang, the director of the Labor Department’s Office of Federal Contract Compliance Programs, stated that the withdrawal of the rule would ensure that the exemption is “applied to the facts and circumstances of each contractor.”
Religious advocacy groups, some religious colleges and universities, and many Republicans in Congress opposed the withdrawal of the rule. They argued that the Trump-era rule created a clearer standard that would encourage religious employers to become federal contractors and was more in line with recent U.S. Supreme Court rulings involving religious liberty. However, the Labor Department stated that the rule was actually out of step with those decisions, creating inconsistencies in the way courts and the department applied religious exemptions.