Background

Title VII of the Civil Rights Act of 1964 requires employers to accommodate employees’ religious practices unless such accommodations will impose an “undue hardship” on the conduct of the employer’s business. On June 29, 2023, the U.S. Supreme Court held that in order to assert the undue-hardship defense, an employer must show that the employee’s requested accommodation would impose a burden that is “substantial in the overall context of an employer’s business.”

Decision

In Groff v. DeJoy, the Supreme Court unanimously overruled lower court decisions interpreting “undue hardship” as an employer bearing more than a de minimis cost. Under that standard, the cost to the employer only had to be more than inconsequential for it to deny a religious accommodation. Under the EEOC’s guidance, for example, administrative costs or premium wages for employees covering shifts should not qualify as more than a de minimis cost. However, some appellate courts ignored the EEOC’s recommendations and found administrative costs to be an undue hardship on employers. And, in fact, in Groff, the Supreme Court chided an appellate court for one such case, holding that Walmart’s facilitation of voluntary shift-trading was an undue hardship.

The Supreme Court provided employers with various synonyms for “undue hardship” (e.g., “substantial additional costs” and “substantial expenditure”) but ultimately held that the inquiry would be fact intensive. That said, the Supreme Court mandated that lower courts must look at the particular accommodation requested as well as its impact on the employer, given the nature, size, and operating cost to determine if granting a request is an undue hardship. To that end, the law of the land is now clear: a religious accommodation may only be denied as an “undue hardship” when the burden is “substantial in the overall context of an employer's business.” This is a dramatic shift from the “more than de minimis” standard previously applied by courts across the country.

Practical Effect on Employers

If an employer has been following EEOC guidance on religious accommodations, this decision will likely not change much. The Supreme Court acknowledged that the EEOC has provided guidance in line with this interpretation for years. What this does mean is that employers can likely expect more requests for religious accommodations, such as time off on Sundays, prayer breaks, dress code modifications, scheduling adjustments, and job reassignments. Management teams and HR departments will need to adjust trainings for managers and other members of leadership in expectation of receiving—and likely granting—more accommodations. Now more than ever, documentation of religious-accommodation requests will be critical. Engaging in an interactive process with the employee after receiving an accommodation and documenting each step in the process will safeguard employers as the effects of this decision emerge. For questions on your company’s policies and practices, reach out to Gray Reed’s Labor & Employment Practice for legal advice.