On November 9, 2021, the Office of Federal Contract Compliance Programs (OFCCP) published a proposed rule rescinding its December 2020 Final Rule broadening the religious exemption from Executive Order 11246’s nondiscrimination requirements for federal contractors, which went into effect on January 8, 2021.  The rescission of the Trump-era religious exemption regulation was not unexpected, as OFCCP previously announced its intention to rescind the rule in February 2021.  The proposed rule will reinstate the pre-2020 language of OFCCP’s religious exemption regulation.

The current OFCCP religious exemption regulations, enacted in the waning days of the Trump administration, widen the availability of the religious exemption to federal contractors, especially those who operate on a for-profit basis, and also broadly construe the protection offered to religious contractors. The current regulations also include a rule of construction requiring OFCCP to enforce contractor non-discrimination obligations in a manner that provides the broadest protection of religious activity.  In the new proposed rule, OFCCP proposes eliminating the Trump-era regulations in their entirety and instead aligning OFCCP’s religious exemption with the existing body of case law construing Title VII’s religious exemption. 

The return to OFCCP’s pre-Trump religious exemption based on Title VII precedents will certainly reduce the availability of the religious exemption to federal contractors as a defense against discrimination claims asserted by OFCCP.  That said, the practical impact of the change will likely be minimal, as federal contractor employers who might have been protected by the broader religious exemption would nonetheless be subject to the Title VII standard in any related private litigation brought by the employees alleged to have been discriminated against.  The DOL will accept public comments on the proposed rule for 30 days, until December 9, 2021.