Quick Hits
- The Fourth Circuit held that Title VII’s Section 702 religious employer exemption is limited to religious discrimination and accommodation claims and does not shield a religious organization from sex, race, or national origin discrimination claims, even when the employment decision is motivated by sincerely held religious beliefs.
- For lay employees who do not perform spiritual functions and are therefore not covered by the exemption for ministerial employees, the majority held that the church autonomy doctrine does not displace federal and state antidiscrimination law.
- The court held that the Religious Freedom Restoration Act (RFRA) cannot be raised as a defense in a lawsuit between private parties, even if the government intervenes in the litigation.
- Religious employers in the Fourth Circuit—in Maryland, Virginia, North Carolina, South Carolina, and West Virginia—may want to review benefits eligibility rules and other employment policies that draw religiously based distinctions affecting nonministerial employees.
In Doe v. Catholic Relief Services, a split three-judge Fourth Circuit panel rejected, 2–1, an employer’s religiously based statutory and constitutional defenses to Title VII and MFEPA sex discrimination claims. In the majority’s view, the employer was seeking “extremely broad and nearly unbounded immunity” arising from its religious status that “is not required by any statute or constitutional provision.” A lengthy dissent described the decision as “stunningly restrictive of religious freedom.” The sharp split suggests the issues may receive further review.
Background
Catholic Relief Services (CRS) is a nonprofit social services agency affiliated with the Catholic Church and governed by the United States Conference of Catholic Bishops. CRS has more than 8,000 employees. It does not require them to adhere to the Catholic faith except in “representational” positions. The plaintiff, an IT and data analyst, told a CRS recruiter in 2016 that he was gay and married. He asked whether his husband would be covered by dependent health benefits, and the recruiter said he would be.
Five months after the plaintiff enrolled his husband, CRS told him the enrollment was a mistake. CRS explained that extending dependent benefits to his husband conflicted with its religious values. CRS offered an alternative arrangement that included transitional coverage and a raise to offset most out-of-pocket costs. The plaintiff declined, and CRS terminated his husband’s coverage.
The plaintiff employee sued for sex discrimination under Title VII and the Equal Pay Act, and for sexual orientation discrimination under MFEPA. The district court granted summary judgment to the plaintiff as to liability under Title VII and the Equal Pay Act. It entered judgment for him on his MFEPA claim after a bench trial.
The Majority Opinion
On appeal, CRS raised multiple defenses arising from various statutes as well as the First Amendment’s Religion Clauses, including the following: that it was subject to the religious employer exemption under Title VII and MFEPA; that the RFRA barred enforcement of those statutes against it; and that the First Amendment’s church autonomy doctrine provides immunity from liability. The court majority rejected all of these arguments.
Title VII’s Section 702 Exemption
Section 702 provides that 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.” CRS argued that the exemption applies whenever a religious employer acts because an employee’s conduct is incompatible with its faith. The majority disagreed.
Relying on the canon that exemptions from remedial statutes are to be construed narrowly, the court held that Section 702 immunizes religious organizations only from religious discrimination claims; it “does not apply to claims of discrimination based on sex, race, or national origin,” even when a decision is motivated by religious belief. Applying Title VII’s familiar mixed-motive framework, the court explained that if sex is a but-for cause of the decision, a concurrent religious motive does not change the result. The court emphasized that religious organizations may still “favor co-religionists in hiring” and may also discharge employees whose conduct or beliefs are inconsistent with those of their employers from a religious perspective, so long as the decision is not in any way based on race, sex, or national origin.
MFEPA’s Religious Exemption
MFEPA exempts religious entities from sexual orientation claims for “work connected with the activities of the religious entity.” The Maryland Supreme Court previously held that this exemption applies only when the employee’s duties “directly further the core mission(s) … of the religious entity.” The Fourth Circuit affirmed the district court’s finding that the plaintiff’s IT and data roles were “materially indistinguishable from those performed by individuals at secular organizations” and therefore did not qualify as mission-related jobs.
The RFRA
The RFRA provides religious organizations with a shield from certain governmental regulations or enforcement when such action conflicts with an organization’s religious mission. However, based on the RFRA’s text, including its reference to “appropriate relief against a government,” the court held that the RFRA applies only when the government is a party to the suit. In this case, the U.S. Department of Justice merely intervened in this private litigation between an employee and his employer, and that scenario did not trigger the RFRA’s protections.
Church Autonomy
The church autonomy doctrine arises out of the First Amendment’s religious protections. It bars courts from deciding questions of faith, doctrine, or internal church governance. The majority recognized that the doctrine presumptively covers three areas: the employment of ministers, church membership and hierarchy, and church discipline. It declined to extend the doctrine to all employment decisions rooted in religious belief. Drawing on Justice O’Connor’s concurrence in the Supreme Court of the United States’ decision in Roberts v. U.S. Jaycees, the majority reasoned that a religious organization filling lay positions through the commercial employment market “must participate in the surrounding regulatory scheme just like every other employer.”
Interestingly, the court also expressly disagreed with the now-vacated January 2026 Ninth Circuit panel decision in Union Gospel Mission of Yakima v. Brown, which held that the church autonomy doctrine—a First Amendment principle beyond the ministerial exception—protects religious organizations’ nonministerial hiring decisions when based on sincerely held religious beliefs. That decision would have prevented enforcement of the Washington Law Against Discrimination’s antidiscrimination provisions with regard to hiring and employment decisions tied to the organization’s religious beliefs. That issue is now being reconsidered by the full U.S. Court of Appeals for the Ninth Circuit sitting en banc.
The Dissent
In dissent, Judge Quattlebaum would have reversed on several independent grounds.
- Church Autonomy. He reasoned that the church autonomy doctrine extends beyond the ministerial exception to “‘internal management decisions that are essential to the institution’s central mission.’” In his view, that includes setting terms of employment, including policies and benefits, based on religious tenets. He criticized the majority for treating religious freedom “like getting an after-work beer—a little bit is okay, but not too much.”
- Section 702. He also read this statutory section’s language that “this subchapter shall not apply” broadly to mean that all types of discrimination prohibited by Title VII—not just its religious discrimination ban—would disappear when a religious employer acts based on an employee’s religious observance or conduct that fails to conform to the religious employer’s requirements. He warned that under the majority’s view, religious organizations “[would] be required to hire employees who reject their beliefs,” but federal court precedent interpreting Section 702 has not traditionally gone that far.
Key Takeaways for Employers
A few points from the case may be worth considering by religiously affiliated employers in the Fourth Circuit:
- Section 702 appears to be narrower in the Fourth Circuit than some religious employers may assume. Within the circuit, the Section 702 exemption protects decisions based solely on religion, such as preferring co-religionists. However, it does not cover decisions in which sex (including sexual orientation under Bostock) or another protected characteristic is part of that decision.
- Benefits plans may merit a closer look. The case arose from an employer’s denial of dependent health insurance coverage, and the majority characterized the denial as unequal compensation based on sex. Religious employers may want to review their spousal and dependent eligibility rules, along with related plan documents and enrollment communications.
- Job duties. The ministerial exception remains available for employees who perform spiritual functions. Under MFEPA, the exemption turns on whether the employee’s duties directly further the organization’s core mission. Employers may want to evaluate and document the religious functions of key roles.
- Recruiting communications. In this case, a recruiter told the employee that his husband would be covered, and the employer reversed course months later. Employers may want to make sure recruiters and HR staff describe benefits eligibility accurately and consistently.
- The RFRA is not a defense in private suits in the Fourth Circuit. The court’s majority found that the “RFRA does not apply in cases between private parties” and concluded the RFRA was “not an available defense in this case.” Religious employers facing private discrimination claims in the Fourth Circuit may be hard-pressed to rely on the RFRA as a defense under this decision.
- Watch for further review. The 2–1 split, the eighty-seven–page dissent, and the conflicting authority across circuits suggest the case may draw further appellate attention. And we await the Ninth Circuit’s en banc opinion in Union Gospel Mission of Yakima v. Brown.
Ogletree Deakins will continue to monitor developments in these cases, including any petition for rehearing en banc or for a writ of certiorari, and will provide updates on the firm’s Employment Law and State Developments blogs as additional information becomes available.
Follow and Subscribe
LinkedIn | Instagram | Webinars | Podcasts
