Most of our readers have transnational business operations.  If they have employees in the United States, they should review carefully today’s decision of the United States Supreme Court.  In a 9-0 ruling, the Court clarified—and raised—the bar that employers must meet in order to show that a religious accommodation imposes an “undue hardship” under Title VII of the Civil Rights Act of 1964.  Groff v. DeJoy, Case No. 22-174 (June 29, 2023). Lower courts had for decades held that anything “more than a de minimis cost” sufficed to establish undue hardship, relying on language in Trans World Airlines v. Hardison, 432 U. S. 63 (1977). While declining to overturn Hardison, the Supreme Court held that employers must show that a proposed religious accommodation would result in “substantial increased costs in relation to the conduct of its particular business.”

Gerald Groff, an Evangelical Christian, delivered mail for the United States Postal Service (USPS). His religious belief that Sunday should be devoted to worship and rest eventually clashed with USPS’s requirement that drivers facilitate Sunday deliveries for Amazon. Groff received “progressive discipline” for failing to work on Sundays, and he ultimately resigned. Groff sued under Title VII, which prohibits discrimination “because of … religion.” The term “‘religion’ includes all aspects of religious observance and practice, as well as belief, unless an employer demonstrates that he is unable to reasonably accommodate to an employee’s … religious observance or practice without undue hardship on the conduct of the employer’s business.” 42 U. S. C. §2000e(j).

The District Court granted summary judgment to USPS, and the Third Circuit Court of Appeal affirmed. Relying on Hardison, the Third Circuit held that exempting Groff from Sunday work would impose “more than a de minimis cost” on USPS—namely, “impos[ing] on his coworkers, disrupt[ing] the workplace and workflow, and diminish[ing] employee morale.” Writing for a unanimous court, Justice Alito reversed.

The Supreme Court first put Hardison in context, noting that the principal issue in that case was whether Title VII “require[s] an employer and a union who have agreed on a seniority system to deprive senior employees of their seniority rights in order to accommodate a junior employee’s religious practices.” The answer was no: the employer (TWA) was not required to compel senior workers to work on the Sabbath in order to accommodate a junior worker’s religious belief. But Hardison contained this line: “To require TWA to bear more than a de minimis cost in order to give Hardison Saturdays off is an undue hardship.” That line, Justice Alito noted, “would later be viewed by many lower courts as the authoritative interpretation of the statutory term ‘undue hardship,’” though “it is doubtful that it was meant to take on that large role.” Instead, Hardison elsewhere described the governing standard as “substantial” “costs” or “expenditures.”

Articulating the governing standard, the Supreme Court held: “‘undue hardship’ is shown when a burden is substantial in the overall context of an employer’s business.” The Supreme Court directed lower courts to “apply the test in a manner that takes 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.” While this is a “fact specific inquiry,” the Supreme Court provided some guidelines as to its contours: employers cannot “escape liability simply by showing that an accommodation would impose some sort of additional costs.” Nor does “a hardship that is attributable to employee animosity to a particular religion, to religion in general, or to the very notion of accommodating religious practice” qualify as “‘undue.’”

Rather, the Supreme Court held, “the modifier ‘undue’ means that the requisite burden … must rise to an ‘excessive’ or ‘unjustifiable’ level.” The court also had “no reservations in saying that a good deal of the EEOC’s guidance in this area is sensible and will, in all likelihood, be unaffected by our clarifying decision today.” Under that guidance, no undue hardship is imposed by temporary costs, voluntary shift swapping, occasional shift swapping, or administrative costs. 29 CFR §1605.2(d). But the Supreme Court stopped short of “ratify[ing] in toto a body of EEOC interpretation that has not had the benefit of the clarification we adopt today.”

Elaborating further, the Supreme Court held that “Title VII requires that an employer reasonably accommodate an employee’s practice of religion, not merely that it assess the reasonableness of a particular possible accommodation.” For a situation like Groff’s, “it would not be enough for an employer to conclude that forcing other employees to work overtime would constitute an undue hardship. Consideration of other options, such as voluntary shift swapping, would also be necessary.” The Supreme Court therefore sent the case back to the lower court “to apply our clarified context-specific standard.”

Of course, Groff and application of the new test is not limited to traditional Christian beliefs.  The Supreme Court relied on amicus briefs filed by “a bevy of diverse religious organizations”—including groups representing the Sikh, Muslim, Jewish, and Seventh Day Adventist faiths—who argued that the de minimis test had “blessed the denial of even minor accommodation in many cases.”

 Groff has major implications for U.S. employers. Faced with a heightened undue hardship standard, employers likely will need to accommodate a greater number of religious beliefs and practices in the workplace than they have done in the past. Requests for religious accommodation can run the gamut from work scheduling requests, to exemptions from dress code and grooming requirements and vaccination mandates. After Groff, evaluating such accommodation requests will be a “context-specific” inquiry, requiring a careful consideration of a number of the factors outlined in the Supreme Court’s decision.

Seyfarth lawyers are here to assist as employers navigate this new legal landscape. Seyfarth’s International Dispute Resolution Group will also provide an international perspective on these developments in a blog post next week.