For decades, an employer could lawfully deny a religious accommodation requested by an employee if it could demonstrate that the accommodation would require “more than a de minimis cost.” A new ruling by the U.S. Supreme Court, however, raises the standard, making it more challenging for employers to deny religious accommodation requests.
Fortunately, employment practices liability coverage should continue to protect employers from litigation and other claims of religion-based discrimination.
A new standard for employers
At issue in the case at hand, Groff v. DeJoy, is whether an employer is required to accommodate an employee’s request to not work on Sundays for religious reasons.
When the plaintiff — an employee of the United States Postal Service — took the job, Sunday work was not generally required, but that changed at some point during his employment. The worker alleged he was subject to progressive discipline for refusing to work Sundays so he eventually resigned. He then sued, arguing that under Title VII of the Civil Rights Act of 1964, his employer could accommodate his religious observance request without “undue hardship.”
A lower court’s ruling in favor of the employer was affirmed by the 3rd U.S. Circuit Court of Appeals, which based its ruling on the Supreme Court’s 1977 decision in (opens a new window). In that case, the court held that requiring an employer to bear “more than a de minimis cost” to provide a religious accommodation represented an “undue hardship” for the employer.
The Supreme Court’s June 29 ruling in (opens a new window) moves away from this standard. In a unanimous decision, the court held that to deny a religious accommodation, an employer must show that granting the requested accommodation “would result in substantial increased costs in relation to the conduct of its particular business.”
Discrimination claims on the rise
The decision sends the Groff case back to a lower court to decide whether the employer has met this new standard and can deny the employee’s request of accommodation. Regardless of the final outcome of this particular case, however, the ruling will affect employers more broadly, although to what extent remains to be seen.
The Groff ruling comes at a time when Title VII employment claims alleging discrimination based on religion are on the rise. In fiscal year 2022, the Equal Employment Opportunity Commission received 13,814 charges of religious-based discrimination (opens a new window) — nearly four times the number of charges received in fiscal year 2012. Many of these claims have been filed in response to COVID-19 vaccine mandates, which have also prompted nearly 2,000 lawsuits against employers in federal and state courts as of May 5, 2023 (opens a new window), according to an analysis by Jackson Lewis.
While many of these cases are still working their way through the courts and are pending resolution, new cases continue to be filed. This makes religious accommodations — and the new standard established by the court — an ongoing concern for employers.
Will the Groff decision lead to a flurry of new claims alleging religious discrimination? Time will tell.
Supervisor training crucial
The Supreme Court declined in its ruling to apply the “significant expense or difficulty” standard employers are familiar with when evaluating accommodation requests under the Americans with Disabilities Act. Even so, the court did not offer much clarity.
It is apparent that employers will need to review religious accommodation requests on a case-by-base basis and evaluate the practical impact of an individual request on an employer’s business. Factors to consider will include the nature of the business, its size, and operating cost.
Larger employers may have a more difficult time establishing this heightened undue hardship standard. It is important to train managers, including those handling accommodation requests, of this new standard as well as revise accommodation policies that may no longer be compliant based on the Groff decision.
EPL coverage to continue to respond
As the risk of religious discrimination claims remains high for employers, employers should continue to ensure that their employment policies, procedures and practices regarding religious accommodations remain up to date and consistent with all federal, state and local laws. At the same time, it’s vital that employers secure and maintain broad employment practices liability (EPL) insurance.
EPL policies typically provide coverage for Title VII claims brought by employees and job applicants alleging discrimination on the basis of religion and other circumstances. Depending on a policy’s language, it may also extend to cover claims brought by third parties, such as clients, customers and vendors.
Despite concerns about a potential uptick in COVID-19-related lawsuits amid the pandemic, claims volume has remained manageable for most EPL carriers. That has helped to keep the market for EPL insurance — for both public and private companies — competitive, with many employers benefiting from lower premiums.
Looking ahead, employers can be confident that the Supreme Court’s decision in Groff is unlikely to negatively affect the EPL coverage available to them. Nevertheless, they should remain vigilant about potential religious discrimination claims.
For more information, contact a member of your Lockton Financial Services team.
