Braidwood is a management company that employs workers at the Hotze Health & Wellness Center, Hotze Vitamins, and Physicians Preference Pharmacy International. Steven Hotze controls or owns these entities, and is the sole trustee and beneficiary of the trust that owns Braidwood. He is also the sole board member of Braidwood. Hotze runs his corporations as “Christian” businesses. He does not allow Braidwood to employ individuals who engage in behavior he considers sexually immoral or gender non-conforming, nor does he allow Braidwood to recognize homosexual marriage. Braidwood enforces a sex-specific dress code, meaning that “biological” men must wear a tie if they have contact with customers, and “biological” women who have contact with customers may not wear a tie, but may wear skirts, blouses, shoes with heels, and fingernail polish. Dressing in a manner that the employer viewed as inconsistent with clothing commonly associated with the sex assigned at birth was strictly forbidden. There is no evidence of any applicant or employee claiming discrimination under these policies.
Bear Creek is a nondenominational church whose bylaws state that marriage is exclusively the union of one genetic male and one genetic female. Accordingly, the church will not hire “practicing homosexuals, bisexuals, crossdressers, or transgender or gender non-conforming individuals.” Employees who enter into a homosexual marriage will be fired.
Bear Creek and Braidwood require each employee to use the restroom of his or her biological sex.
In Bostock v. Clayton County, the U.S. Supreme Court determined that Title VII of the Civil Rights Act of 1964 forbids employers from discriminating against homosexuals and transgender persons, holding that this falls into the category of discrimination “on the basis of sex.” The Supreme Court gave little guidance on how courts should apply this ruling to religious employers.
In response, Braidwood and Bear Creek filed suit against the Equal Employment Opportunity Commission (EEOC), arguing that Title VII, as interpreted under the EEOC’s guidance and Bostock, prevents them from operating their places of employment in a way that is compatible with their Christian beliefs.
The two employers stated that they will not alter or discontinue their employment practices, and numerous policies and practices they follow (such as those about dress codes and segregating bathroom usage on biological sex) already clearly violate EEOC guidance.
The trial court ruled in favor of the employers and issued an order establishing nationwide exemptions to Bostock. Specifically, the trial judge ruled that Bear Creek and other religious nonprofits fall under Title VII’s religious exemptions, and that Braidwood and other for-profit companies with a “religious element” are shielded from claims of sexual orientation and gender identity bias under the Religious Freedom Restoration Act (RFRA) and the First Amendment.
On appeal, the EEOC argued that they have not historically enforced Title VII’s prohibitions against religious entities’ engaging in potential discrimination against homosexuals and gender non-conformists. The EEOC argued that it counsels its investigators to respect employers’ religious liberties when deciding whether to bring an enforcement action. At the same time, the EEOC has stated that employers must treat homosexual marriage as the same as heterosexual marriage, and bathroom policies should be dictated by an employee’s asserted gender identity rather than their biological sex. There is no official guidance indicating exemptions for employers that oppose homosexual or transgender behavior on religious grounds.
The Court of Appeals ruled that even though no enforcement action had been brought against Braidwood or Bear Creek, the employers established a credible fear that such an action could be brought one day.
The Court of Appeals ruled that Braidwood is exempted from Title VII due to the RFRA because compliance with Title VII post-Bostock would substantially burden its ability to operate per its religious beliefs about homosexual and transgender conduct. Braidwood maintained it has sincere and deeply held religious beliefs that heterosexual marriage is the only form of marriage sanctioned by God, pre-marital sex is wrong, and men and women are to dress and behave in accordance with their God-ordained, biological sexual identity. Under the RFRA, the federal government is prohibited from burdening a person’s free exercise of religion, even if that burden stems from a neutral law.
The Court of Appeals also found that the EEOC’s guidance burdened Braidwood’s religious practice because Braidwood was required to either violate Title VII and obey their convictions, or obey Title VII and violate their convictions. The Court of Appeals said that the EEOC did not provide a compelling interest in refusing Braidwood an exemption, and the Supreme Court has not yet held that preventing commercial business from discriminating on factors specific to sexual orientation or gender identity is a compelling government interest that overrides religious liberty.
As for Bear Creek, the Court of Appeals upheld the trial court’s ruling that Bear Creek is a religious organization not burdened by Title VII, and the statute can bar policies regarding bisexual conduct, gender reassignment surgery, and hormone treatment.
Braidwood Management, Incorporated v. Equal Employment Opportunity Commission (5th Cir. 2023) 70 F.4th 914.
Note: Although this is a 5th Circuit case and does not directly impact California schools, this case highlights that there is considerable debate over the laws that apply to religious institutions and how those laws interact with sex and gender discrimination.