The Leadership Conference on Civil and Human Rights

The Nation's Premier Civil and Human Rights Coalition

The Leadership Conference on Civil and Human Rights  & The Leadership Conference Education Fund
The Nation's Premier Civil and Human Rights Coalition

The Religious Exemption to the Employment Non-Discrimination Act

Leadership Conference on Civil Rights - August 1, 2001

The Employment Non-Discrimination Act (ENDA) prohibits discrimination in employment based on sexual orientation. ENDA is based, in large part, on Title VII of the Civil Rights Act of 1964, which prohibits discrimination based on religion, race, sex, and national origin. The exemption for religious organizations under ENDA, however, is broader than the comparable religious exemption under Title VII.

Which religious organizations are exempt under ENDA?

ENDA exempts all religious organizations, which includes corporations, associations, and religious societies. In addition, all educational institutions are exempt if the educational institution is at least substantially controlled or owned by a religious organization or if the institution's curriculum is directed towards the propagation of a religion.

In what way is ENDA's religious exemption broader than Title VII' religious exemption?

Title VII allows a religious organization to discriminate on the basis of religion when it hires employees. For example, in a 1987 Supreme Court case dealing with Title VII, the Court ruled that a gym operated by the Mormon Church could require its janitor to be a Mormon in good standing. Title VII does not, however, permit religious organization to discriminate on the basis of an individual's race, sex, or national origin. By contrast, ENDA permits religious organizations to discriminate on the basis of sexual orientation.

Is every single activity of a religious organization covered under this broad exemption in ENDA?

Not necessarily. Because ENDA's religious exemption is so much broader than Title VII's exemption, one qualification has been added in ENDA. If a religious organization engages in activities that are substantially unrelated to its religious purposes, such that the Internal Revenue Service would consider the profit from such activities to be taxable, employees who are engaged solely in those activities producing taxable income would be covered under ENDA.

So ENDA places a new burden on religious organizations to determine which of their activities are taxable and therefore covered under ENDA?

No. Presumably by April 15 of each year, every religious organization has already determined which of its activities, if any, are taxable. By linking ENDA's coverage to an already-determined tax coverage, no new burden is created for religious organizations.

In practice, does this qualification, based on taxable profit, mean that religious bookstores, day care centers, and other activities of religious organizations will be covered under ENDA?

Very unlikely. Based on an analysis of IRS rulings, most religious bookstores, day care c enters, and other activities would be exempt from taxation and, therefore, not covered by ENDA. Even activities that generate significant profit have been considered tax-exempt by the IRS because the activity is seen as related in some way to the organization's religious purpose.

Why should religious organizations be covered at all, even if it is only to the extent of their taxable activities?

A religious organization already enjoys a much broader exemption under ENDA than it enjoys under Title VII or the American with Disabilities Act (ADA). While such an organization in prohibited from discriminating in employment of the basis of race, sex, national origin, or disability, it may discriminate in employment on the basis of sexual orientation. But if a religious organization enters the stream of commerce in a manner that is so substantially unrelated to its religious purpose that the profits of such activities solely in those activities, deserve to be covered under ENDA, just like employees of any other organization with more than 15 employees.

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