Employers will now have to show a higher degree of hardship to deny employee requests for religious accommodation. Under Title VII of the Civil Rights Act of 1964 and 29 C.F.R. § 1605.2(b)(1), employers are required to grant employee requests for religious accommodation “unless the employer demonstrates that [the requested] accommodation would result in undue hardship on the conduct of its business.” On July 29, 2023, the United States Supreme Court unanimously clarified in Groff v. DeJoy that a religious accommodation only results in “undue hardship” when “the burden of granting [the] accommodation would result in substantial increased costs in relation to the conduct of its particular business.” 

The “substantial increased cost” standard is a departure from the lower “more than a de minimis cost” standard that has prevailed since 1975. For the last 48 years, employers could deny religious accommodations for causing “undue hardship” if the accommodation would impose “more than a de minimis cost” on the employer. Under the “more than a de minimis cost” standard, employers denied accommodations for causing “very small” or “trifling” hardship, including minor administrative costs and incentive pay. In practice, the “more than a de minimis cost” standard allowed employers to deny religious accommodations virtually any time an employer was inconvenienced. In fact, employers could historically deny religious accommodation requests when the accommodation would inconvenience or displease the requesting employee’s coworkers. The Third Circuit, in the decision which was the source of this appeal, described that standard as “not a difficult threshold to pass.”

By contrast, the new “substantial increased cost” standard explained in Groff raises the threshold for denying religious accommodation requests. The case at issue involved Gerald Groff, an evangelical Christian employed by the United States Postal Service (USPS), who was impacted by a new USPS policy requiring employees to deliver packages on Sundays. Groff requested a religious exemption from the new policy because he believes that Sundays should be devoted to worship and not “secular labor.” After applying the previous “more than a de minimis cost” standard and finding that Groff’s request would have imposed a burden on his coworkers, both the District Court and Third Circuit Court of Appeals ruled for the USPS. 

Under the new “substantial increased cost” standard announced in Groff v. DeJoy, employers must show that the requested religious accommodation would create an “excessive” or “unjustifiable” burden. The Supreme Court explained that an “excessive” or “unjustifiable” burden occurs whenever the accommodation substantially interferes with the employer’s ability to conduct business. 

While the Supreme Court did not issue a bright line rule for when an accommodation significantly interferes with the employer’s ability to conduct business, the Court explained that employers and reviewing courts must “take[] into account all relevant factors in the case at hand, including the particular accommodations at issue and their practical impact in light of the nature, size[,] and operating cost of [an] employer.” The Court vacated the Third Circuit’s judgment and remanded the case back to the lower courts to apply their “context-specific standard.”

Further, the Court explained that “a good deal of the [Equal Employment Opportunity Commission’s (“EEOC”)] guidance in this area is sensible and will, in all likelihood, be unaffected by [the Groff v. DeJoy] decision.”  For example, as the EEOC explained in 29 C.F.R. §1605.2(e)(2), religious accommodations that interfere with bona fide seniority systems will constitute an undue hardship, unless employees with greater seniority voluntarily swap shifts with the employee requesting a religious accommodation. However, the Court declined to ratify all previous EEOC guidance before the EEOC has had an opportunity to adjust its guidance to comport with the clarifying Groff v. DeJoy decision. Therefore, employers should expect to see updated guidance issued by the EEOC in the future that comports with the new “substantial increased cost” standard. 

The Court also issued explicit guidance on how employers and reviewing courts should treat impact on the requesting employee’s coworkers. Under the “substantial increased cost” standard, an “undue hardship” cannot be “attributable to employee animosity to a particular religion, to religion in general, or to the very notion of accommodating religious practice.” Therefore, without more, an employer cannot deny a religious accommodation merely because the accommodation inconveniences or displeases the employee’s coworkers. However, the Court implied that employee animosity could rise to the level of undue hardship if the unrest manages to substantially interfere with the employer’s ability to conduct business, such as decreased efficiency due to employee protest. 

It remains to be seen exactly how this new standard will play out in workplaces and courtrooms around the country. But it is clear that this decision increases the burden imposed on employers by Title VII and exposes employers to increased liability when denying requests for religious accommodations. In light of the new standard for evaluating employee requests for religious accommodation, employers should consider the following actions:

1. Employers should review their accommodation process to ensure that those responsible for granting or denying requests are aware of this change in the law.
2. Employers should also review and update employee handbooks and policies if needed, particularly any mandatory vaccination policies or any policies that reference the prior “more than a de minimis cost” standard.  
3. Employers may wish to review any recently denied requests for religious accommodation and consider whether that denied request might be viewed differently under the new “substantial increased cost” standard (and if so, they may wish to talk to their employment counsel about whether revisiting the request is advisable). 
4. Employers should be on the lookout for updated EEOC guidance regarding what constitutes an “undue hardship” in religious accommodation cases.

Womble Bond Dickinson Summer Associates David Corasaniti and Haley Hurst co-authored this client alert.