Braidwood Mgmt., Inc. v. Equal Emp't Opportunity Comm'n

• Docket Number: 22-10145
• Decision Date: 20 June 2023
• Citation: 70 F.4th 914
• Parties: BRAIDWOOD MANAGEMENT, INCORPORATED, on behalf of itself and others similarly situated; Bear Creek Bible Church, Plaintiffs-Appellants Cross-Appellees, v. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION; United States of America; Charlotte A. Burrows; Jocelyn Samuels; Janet Dhillon; Andrea R. Lucas; Keith E. Sonderling, in their official capacities as chair, vice-chair, and commissioners of the Equal Employment Opportunity Commission; Merrick Garland, U.S. Attorney General, Defendants-Appellees Cross-Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

70 F.4th 914

BRAIDWOOD MANAGEMENT, INCORPORATED,

on behalf of itself and others similarly situated;

Bear Creek Bible Church, Plaintiffs-Appellants Cross-Appellees, v. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION;

United States of America; Charlotte A. Burrows; Jocelyn Samuels;

Janet Dhillon; Andrea R. Lucas; Keith E. Sonderling, in their official capacities as chair,

vice-chair, and commissioners of the Equal Employment Opportunity Commission;

Merrick Garland, U.S. Attorney General, Defendants-Appellees Cross-Appellants.

No. 22-10145

United States Court of Appeals, Fifth Circuit

FILED June 20, 2023

Appeal from the United States District Court for the Northern District of Texas, USDC No. 4:18-CV-824, Reed Charles O'Connor, U.S. District Judge

Jonathan F. Mitchell (argued), Austin, TX, Gene Patrick Hamilton, America First Legal Foundation, Washington, DC, for Plaintiffs-Appellants Cross-Appellees.

Ashley Cheung Honold (argued), Charles Wylie Scarborough, Jack Starcher, U.S. Department of Justice, Civil Division, Appellate Section, Washington, DC, Brian Walters Stoltz, U.S. Attorney's Office, Northern District of Texas, Dallas, TX, Benjamin Thomas Takemoto, U.S. Department of Justice, Civil Division, Washington, DC, for Defendants-Appellees Cross-Appellants Equal Employment Opportunity Commission, United States of America, Charlotte A. Burrows, Janet Dhillon.

Ashley Cheung Honold (argued), Charles Wylie Scarborough, Jack Starcher, U.S. Department of Justice, Civil Division, Appellate Section, Washington, DC, Benjamin Thomas Takemoto, U.S. Department of Justice, Civil Division, Washington, DC, for Defendants-Appellees Cross-Appellants Jocelyn Samuels, Andrea R. Lucas, Keith E. Sonderling, Merrick Garland.

Adam R. Pulver, Esq., Public Citizen Litigation Group, Washington, DC, for Amicus Curiae Public Citizen, Incorporated.

Jane Langdell Robinson, Ahmad Zavitsanos & Mensing, P.L.L.C., Houston, TX, for Amici Curiae Maureen Carroll, Christine Bartholomew, Andrew Bradt, Brooke Coleman, Robin Effron, Myriam Gilles, Robert Klonoff, Suzette Malveaux, David Marcus, Elizabeth Porter, D. Theodore Rave, Elizabeth Schneider, Adam Zimmerman.

Before Smith, Clement, and Wilson, Circuit Judges.

Jerry E. Smith, Circuit Judge:

In Bostock v. Clayton County, — U.S. —, 140 S. Ct. 1731, 1740-41, 1743, 207 L.Ed.2d 218 (2020), the Court determined that Title VII of the Civil Rights Act of 1964 forbids employers from discriminating against homosexuals and transgender persons, holding that such discrimination is "on the basis of sex." Yet the Court punted on how religious liberties would be affected by its ruling and on the practical scope of the Title VII protections afforded by Bostock. Instead, the Court identified three potential avenues of legal recourse for religious and faith-based employers to shield themselves from any potential infringement of their religious rights. The avenues were Title VII's religious exception, 42 U.S.C. § 2000e-1(a), the ministerial exception of the First Amendment, and the Religious Freedom Restoration Act of 1993 ("RFRA"), 42 U.S.C. §§ 2000bb-2000bb-4. Bostock, 140 S. Ct. at 1754.

In expanding discrimination "on the basis of sex" to include sexual orientation and concepts of gender identity such as transgenderism, the Bostock Court gave little guidance on how courts should apply those defenses and exemptions to religious employers. Addressing those issues of first impression, we affirm in large part, reverse in part, and remand.

I.

A.

This is a suit by two Texas employers: Braidwood Management, Inc. ("Braidwood"), and Bear Creek Bible Church ("Bear Creek"). Braidwood is a management company that employs the workers of Hotze Health & Wellness Center, Hotze Vitamins, and Physicians Preference Pharmacy International LLC. Steven Hotze controls or owns the business entities and is the sole trustee and beneficiary of the trust that owns Braidwood. He is also the sole board member of Braidwood, serving as President, Secretary, and Treasurer. Braidwood has close to seventy employees who work at those entities.

Hotze runs his corporations as "Christian" businesses—to-wit, he does not permit 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. To Hotze, that would "lend approval to homosexual behavior and make him complicit in sin." Hotze also gives a nonreligious reason for refusing to recognize same-sex marriage: He will not allow Braidwood to recognize same-sex marriage because Texas continues to define marriage in heterosexual terms.

Braidwood enforces a sex-specific dress code that disallows gender-non-conforming behavior. For example, "biological" men must wear professional attire, including a tie, if they have contact with customers. On the other hand, "biological" women may not wear a tie but may wear skirts, blouses, shoes with heels, and fingernail polish; men are forbidden from wearing those accessories, because "cross-dressing" is strictly forbidden. Hotze also does not countenance Braidwood employees' using a restroom opposite their biological sex, regardless of any asserted gender identity. There is no record evidence of any job applicant or employee of Braidwood who has claimed he was discriminated against 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 requires its employees to live according to its professed views on Biblical teaching. To that end, Bear Creek will not hire "practicing homosexuals, bisexuals, crossdressers, or transgender or gender non-conforming individuals." The church asserts that any employee who enters into a homosexual marriage will be fired. Bear Creek, like Braidwood, requires each employee to use the restroom of his or her biological sex. Bear Creek has over fifteen employees, some of whom are non-ministerial, and so is subject to Title VII. Finally, Bear Creek also asserts that it is compelled to obey civil authorities per Biblical teachings.

The church avers that it employed three persons who participated in conduct that it considered immoral and against its religious values, but Bear Creek never fired any of them based on its values. The first was a homosexual pedophile caught molesting children after he left Bear Creek's employment. The second was dismissed for poor performance, and only after dismissal did Bear Creek discover the former employee was gay. The third engaged in cross-dressing but voluntarily left before Bear Creek took any employment action. Two of the three were pastors. The other was an administrative staff member.

As per their closely held religious beliefs, Braidwood and Bear Creek assert that Title VII, as interpreted in the EEOC's guidance and Bostock, prevents them from operating their places of employment in a way compatible with their Christian beliefs. These two plaintiffs have implicitly asserted that they will not alter or discontinue their employment practices. And all parties admitted in district court that numerous policies promulgated by plaintiffs (such as those about dress codes and segregating bathroom usage by solely biological sex) already clearly violate EEOC guidance. Both plaintiffs also contend that they are focused on individuals' behavior, not their asserted identity. Thus, for example, plaintiffs will hire homosexual employees who follow their code of sexual conduct. Although the EEOC has not brought an enforcement action against either party, it has not forsworn or disclaimed its willingness to bring an enforcement action against plaintiffs or other similarly-situated members of their proposed classes.

B.

Title VII forbids employers from "discriminat[ing] against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual's . . . sex." 42 U.S.C. § 2000e-2(a)(1). The act also prohibits an employer from "limit[ing], segregat[ing], or classify[ing] . . . employees or applicants for employment in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual's . . . sex." Id. § 2000e-2(a)(2). Either the EEOC or an affected employee (if the EEOC declines to act) is statutorily authorized to bring an enforcement action. Id. § 2000e-5(f)(1).

The EEOC has not historically enforced Title VII's prohibitions against religious entities' engaging in potential discrimination against homosexuals and gender non-conformists. In one case, however, the EEOC brought an enforcement action against an avowedly Christian funeral home that prohibited a biological male from cross-dressing per the employee's claimed gender identity as female.¹ Despite the employer's sincere religious objections to gender-non-conforming conduct, see 884 F.3d at 567, the EEOC took the position that the employer's RFRA defense was invalid, see id. at 585.²

Still, most Title VII suits are brought by employees, not the EEOC. Moreover, the EEOC alleges that it counsels its investigators to respect employers' religious liberties when deciding whether to bring an enforcement action; it has a guidance manual that instructs its investigators on addressing potential religious-discrimination issues.

But even before Bostock, the EEOC interpreted statutory prohibitions on sex discrimination to include sexual orientation and gender identity.³ The EEOC has stated that employers must treat homosexual marriage as the same as heterosexual marriage, and bathroom policy should be dictated by an employee's asserted gender identity as distinguished from his or her biological sex.⁴ The EEOC has no official guidance indicating any exemptions for employers that oppose homosexual or transgender behavior on religious grounds.

Then in Bostock, 140 S. Ct. at 1740-41, the Court ruled that...