New Sexual Orientation and Gender Identity Law in Virginia: Ramifications for Religious Employers and Others

New Sexual Orientation and Gender Identity Law in Virginia: Ramifications for Religious Employers and Others

By William R. Thetford, Esq. and H. Robert Showers, Esq.

Last Updated: August 25, 2020

The legislative session of 2020 has radically transformed the legal climate of the Commonwealth of Virginia. This article analyzes the controversial Virginia Values Act (Senate Bill 868 and House Bill 1663: the “Act”) which was signed into law by the Governor on Easter weekend and took effect July 1, 2020.[1]

The Act creates new avenues of complaint and rewrites significant portions of Virginia nondiscrimination law in the areas of employment, public accommodation, and housing. Some of these changes are relatively uncontroversial, such as adding veteran status to the list of protected classes under nondiscrimination law. However, the emphasis of the new Act is highly contentious. The Act is a major change to Virginia nondiscrimination law (including the Virginia Human Rights Act and the Fair Housing Act), in that, for the first time in Virginia, it forbids discrimination on the basis of sexual orientation or gender identity;[2] and, as written with only very limited exemptions for religious organizations, it may greatly impact churches, nonprofit ministries, and people of faith.

The Act is the first of its kind to be passed by a Southern state.[3] Laws prohibiting discrimination in employment on the basis of both sexual orientation and gender identity currently exist in under half of the states, (twenty-one states, plus the District of Columbia) most of which are on the West Coast or in the Northeast (see map below). The Act marks a stark change for Virginia and the surrounding region: it is widely applauded by some and subject to grave concerns by others.

Penalties for violating the law are severe. For instance, a violation of any of the new provisions in employment can bring a $50,000 civil penalty for first-time offenders, and $100,000 for each subsequent violation.[4] Additional compensatory and punitive damages may be awarded to the impacted individual, along with reasonable attorney fees. These actions may be initiated by the Attorney General to punish employers seen to be in violation of the new requirements or impacted individuals themselves may also begin legal action and sue for damages and punitive damages. These requirements are on top of the U.S. Supreme Court’s recent decision to include sexual orientation and gender identity under “discrimination on the basis of sex” in Title VII of the Civil Rights Act. (Click here for our article on that Supreme Court decision).

Since this law, if applied broadly, would infringe upon First Amendment rights to speech and religious liberty among other things, we expect that the matter will be litigated. It will not be known what effect the law and its exceptions will take until Virginia courts rule in interpreting the Act.

Employment Discrimination Law Based on Sexual Orientation and Gender Identity[5]

Employment

 Churches and religious nonprofits are most concerned about the strict new employment regulations. Though the Act contains some religious exemptions, their application appears limited. The law applies to all employers with 15 or more employees generally, but applies to employers with at least 5 employees regarding wrongful discharge against sexual orientation or gender identity.

The Act’s requirements include that:

• Employers are forbidden to “hire, discharge, or otherwise discriminate against any individual with respect to such individual’s compensation, terms, conditions, or privileges of employment because of such individual’s . . . sexual orientation [or] gender identity.”[6]

• Employers may not consider sexual orientation or gender identity in determining programs, apprenticeships, trainings,[7] or promotions.[8]

• Employers are also guilty of an “unlawful employment practice” if a protected classification, such as sexual orientation and gender identity, is “a motivating factor for any employment practice, even though other factors also motivate the practice.”[9]

This last provision is a significant expansion of all discrimination suits, both related to sexual orientation or gender identity and otherwise. Virginia law previously outlawed discrimination on the basis of protected classifications, but an employer was typically protected in taking an employment action against an employee of a protected class (race, sex, etc.) if the employer could show a legitimate nondiscriminatory reason which justified its action (for instance, the employee had documented performance problems, the employee had threatened someone at work, etc.). The new “motivating factor” provisions seem to indicate that courts will have to look more into the subjective motivations of employers even if there are objective reasons for the employment action. Some employers may be concerned that they will be subjected to more, and lengthier, suits in cases where there were legitimate reasons for taking employment action, but the employee believes there were discriminatory motivations in addition to legitimate ones.

In practice, employment claims under the Virginia Human Rights Act (as amended by Virginia Values Act), employees must first submit a written complaint to the Division of Human Rights of the Department of law. The Division will investigate the charge and may attempt to work out a voluntary conciliation of the parties. At the close of the Division’s investigation and any informal dispute resolution attempts, it will give the employee a notice of right to bring a lawsuit. This process is similar to the process of brining federal employment claims under Title VII through the Equal Employment Opportunity Commission.

While the Act allows certain religious employers to hire on the basis of religion (churches or religious schools, for instance), notably absent is any exemption for a religious organization to make hiring decisions on the basis of sincerely held religious beliefs touching marriage and sexuality.

The new Act, codified at Section 2.2-3905(C)(1) states:

[It is not unlawful] to admit or employ any individual… on the basis of such individual’s religion, sex, or age in those certain instances where religion, sex, or age is a bona fide occupational qualification reasonably necessary to the normal operation of that particular employer (emphases added).

Likewise, 2.2-3905(E) states: “The provisions of this section shall not apply to the employment of individuals of a particular religion by a religious corporation, association, educational institution, or society to perform work associated with its activities.”

Similarly, most schools may “hire and employee employees of a particular religion” if the school or institution of higher learning is “in whole or in substantial part, owned, supported, controlled, or managed by a particular religion or by a particular religious corporation, association, or society or if the curriculum of such elementary or secondary school or institution of higher learning is directed toward the propagation of a particular religion.” Va. Code § 2.2-3905(C)(2).

In other words, even under the law, it remains clear that a religious organization (for instance, a Protestant nonprofit) could seek out a co-religionist, if religion is a bona fide occupational qualification reasonably necessary to the tasks at hand or if work is associated with the activities of the religious organization. For instance, a Presbyterian Church, or a school associated with a Presbyterian Church, could likely require its employees to be Presbyterians or to sign a statement of faith.

However, sexual orientation or gender identity is not a possible bona fide occupational disqualification under the Act. In practice, this raises questions when a church or religious organization with convictions about marriage and sexuality wants to hire employees who will abide by its convictions as part of that organization’s ministry.

A couple of examples help to illustrate the concerns.

Example 1: A religious organization has operated for a number of years and has long held strong and sincerely held convictions that: (1) sex is a gift from God exclusively reserved for marriage – sex outside of marriage is sin, (2) the Bible defines marriage as the union of one man and one woman, and (3) God has assigned gender to be in conformity with one’s sex at birth. The organization requires that its employees share the religious convictions of the organization and sign a general statement of faith.

The organization has an open position and receives a number of applications. The first applicant is not a professing Christian and admits that he does not share the religious convictions of the organization. Under both the new Act and existing law, the organization could deny employment to the first applicant and seek to employ fellow Christians, notwithstanding the general prohibition on discriminating on the basis of religion.

Example 2: What happens if the same religious organization receives a second applicant who is a professing Christian but is also in a same-sex marriage, in a same-sex union, or is attempting to transition from one gender to another, in direct contravention to the organization’s religious convictions? Before the Virginia Values Act, that would not have been an issue in Virginia; sexual orientation and gender identity were not actionable discrimination claims in employment. The church or religious organization would not come under potential legal liability for making decisions in accordance with its faith, though there might be public relations pressure for some employers. Under the new Act, the answer is murky. Deciding not to hire this second candidate on the basis that the applicant’s life is at odds with the sincerely held religious beliefs of the organization and could, at the same time, be seen as both (1) lawfully making hiring decisions on the basis of sincerely held religious beliefs, and (2) unlawfully discriminating on the basis of sexual orientation or gender identity.

Depending on how the new law is construed by the court system, the religious organization may be forced to prove not only that the applicant’s lifestyle is inconsistent with the organization’s clear statement of faith (which is relatively easy to do if the statement of faith is, in fact, clear), but that denying the application of the self-professed Christian in a same-sex union was done because the applicant and the employer do not actually share the same religion/religious beliefs, not because of sexual orientation. The “motivating factor” language may also come into play and it is unclear whether a church or religious organization would prevail based on the text of the new Act.

A number of other factors could also impact these decisions:

• What if the organization has the same religious convictions as the organization in the example, but does not have those convictions written in any statement of faith or other formal document?
• What if the organization has a statement of faith, but does not require its employees or members to sign it?
• What happens if an employee signs the statement of faith and later announces he or she no longer agrees with it? What employment action can the employer take?
• What if someone signs the statement of faith and then simply stops abiding by it?
• What differences will arise in the way in which courts treat these matters among churches and other religious organizations?

Unfortunately, it will take the courts time to interpret the new law and sort through these thorny issues. However, there are a few things that churches and religious organizations can do now (such as, ensure they have a clear statement of faith) to put themselves in the best position possible. See our action steps below.

Public Accommodations

While “place of public accommodation” appears to apply broadly enough to include most organizations, there appears to be an exemption for many religious organizations. Specifically, while the Act states it is illegal to refuse service or accommodations “to any individual on the basis of . . . sexual orientation [or] gender identity,” Va. Code § 2.2-3904(C) allows exemptions for “a place of accommodation owned by or operated on behalf of a religious corporation, association, or society that is not in fact open to the public.”[10] Some lawyers view this as effectively exempting churches and many religious nonprofits (and other religious corporations, associations, or societies) from the public accommodations rules. However, it is unclear how the qualifier “not in fact open to the public” will be interpreted and applied here. While we hope that this exception will be interpreted to protect most churches and ministries from being targeted under this portion of the law, only time will tell.

Under other state and federal public accommodations laws, historically churches and religious schools have not been deemed public accommodations. Nonprofits are not automatically exempt simply because they are not-for-profit, but upon viewing the facts many have also not to be a public accommodation for other reasons.[11] For instance, many membership-based organizations may be deemed private clubs.

Organizations that desire to remain true to convictions about marriage and sexuality, will have to take care that they operate in a way that does not (1) cause them to be construed as a public accommodation and (2) that their actions are not discriminating the basis of a protected classification.

Housing

A third major area of contention comes from the Act’s revision of the Virginia Fair Housing Act (Virginia Code Section 36-96.1 and following) concerning sexual orientation and gender identity. As amended, the Act forbids discrimination in housing practices due to sexual orientation or gender identity. This includes buying, selling, renting, leasing, or other transfers.

There is an exception for religious organizations, but it appears to be narrow. “Nothing in this chapter shall prohibit a religious organization . . . from limiting the sale, rental or occupancy of dwellings that it owns or operates. . . to persons of the same religion . . . unless membership in such religion is restricted on account of… sexual orientation [or] gender identity.”[12]

Thankfully, the new Act leaves in place another clearer existing exception that allows educational and religious entities, or other related institutions, to continue to provide separate residences, units, or restrooms for each sex.

[W]here matters of personal privacy are involved, [nothing] in this chapter [shall] be construed to prohibit any private, state-owned or state-supported educational institution, hospital, nursing home, religious or correctional institution, from requiring that persons of both sexes not occupy single-family residence or room or unit of dwellings or other buildings, or restrooms in such room or unit in dwellings or other buildings, which it owns or operates.[13]

This could be significant under this new Virginia law since nonprofit organizations in other states, such as homeless shelters for abused women, have had legal action taken against them for refusing to take biological men into their facilities for abused women under nondiscrimination laws.[14]

Conclusion and Action Steps

This article may raise more questions than it answers, since only time will tell how this Act will be interpreted by the courts, especially in light of the Free Exercise Clause of the First Amendment and Constitutional case law. Employment law is now a minefield for conservative churches and religious organizations hiring new help or even navigating relationships with current employees. We are hopeful that judges will recognize that churches, religious organizations, and their members and employees have a right under the First Amendment, if not this Act, to operate in accordance with their religious convictions. At the very least, we expect churches will have protections in hiring their ministers under the Ministerial Exception doctrine in First Amendment jurisprudence.

It is impossible to know what the future holds, but it is important for religious organizations to be wary and ready if they do not want their religious convictions to be corroded. Despite the uncertainty, there are several action steps that churches and religious organizations can take now that can reduce the risk being embroiled in controversy and litigation:

1. Maintain strong and consistent governing documents.

This means constitution and bylaws for churches, and articles of incorporation and bylaws for nonprofit organizations. Not only must you have these documents, you should be sure that they are tailored to your needs and that you are able to follow them. Sadly, we have seen churches or organizations operate for years on bylaws borrowed from others that were incompatible with its practices. This ultimately causes severe problems, especially when the church is legally challenged. You likely need an attorney, with a background in church and nonprofit law to review the documents to ensure that your documents are up to date, contain appropriate risk management provisions, reflect your beliefs and patterns of decision making, and that your actions are consistent with what your governing documents authorize. See our article on the power of bylaws here.

2. Ensure you are incorporated and maintain status.

If you are not already incorporated as a church or religious nonprofit, it is important that you to do so, as incorporation provides greater legal protection if you face legal action. You can read more about the value of incorporating your church here.

3. Set forth your religious convictions about marriage and sexuality in a clear statement of faith.

If you intend to stand by your religious convictions about marriage and sexuality, and act upon them, make sure that your governing documents contain a statement of faith and that your convictions are set forth clearly and accurately.

If you want to be protected when acting upon your religious beliefs, especially in social hotspots, such as marriage and sexuality, it is important that you clearly define these religious beliefs and put them in writing with competent legal help.

Counterintuitively, it is better to be forthright about these beliefs, rather than hiding them, if you do not want to be embroiled in litigation or be pressured into abandoning your convictions. Sadly, some people view these beliefs as a mere pretext or excuse for malice and bigotry, rather than a true expression of religious conviction. Do not aid that viewpoint by keeping your beliefs a secret until you announce them for the first time to justify an unpopular decision you had to make.

4. Employment policies and agreements reflect your true values.

Besides your governing documents, your religious organization likely has a number of employment policies, handbooks, and employment agreements that could help or hurt you. Make sure your employment policies and practices clearly reflect your religious identity, especially on marriage and sexual issues. You will need to consider whether you should have a code of conduct or other conduct expectations for your employees. Are there religious duties expected of staff? If so, your policies and handbooks should reflect these expectations.

Clarity of what is expected of employees is important for both maintaining good relationships with your current employees as well as in hiring new employees. If you are expecting your employees to fall in line with your ministry on its religious convictions, you will need to be clear about those convictions throughout the hiring process: in job descriptions, job announcements, your website, and elsewhere. To spring these expectations on an applicant at the end of the process is a recipe for frustration and unnecessary legal disputes.

5. Consider obtaining Directors & Officers Liability Insurance including an Employment Practices Liability Policy to help cover your costs in the event you are sued under nondiscrimination law.

Make sure that your insurance policy includes coverage for the new potential causes of action that may come against you based on the changes of the Virginia Values Act discussed here and in our article about the other impacts on businesses, churches, and nonprofits.

6. Decide in advance how you will handle situations involving marriage, sexuality, or other similar issues, and be clear about your goals or the “why” behind your stance.

Is your goal to deny service to a particular class of people based on characteristics like race, sex, or same-sex attraction? Probably not. However, your desire to live out your faith through your ministry will probably be construed by many as if it were class-based prejudice or a “license to discriminate” if you do not frame your conviction in its true light. Competent legal help can help you accomplish this goal and avoid legal liability and lawsuits.

We know that many ministries and churches serve and meet the needs of numerous people in our communities, often through the sacrifice of employees, volunteers, and donors. Sadly, while that service is widely commended, the underlying religious conviction that drives this service is sometimes inaccurately seen as bigoted or harmful. Be thoughtful about how you communicate your convictions. Some ministries have unwittingly given ammunition to those who would oppose them, by poorly articulating legitimate, sincerely held, religious convictions. In general, your decisions are more defensible if they are in terms of principles and practices important to your faith, rather than broad categorical statements about classes of people.

While there is risk to consider in this area, there is also opportunity. Your ministry may be poised to show the “connection between the religious root and the service fruit” and demonstrate one of many reasons preserving religious liberty is so important in both principle and practice.[15]

For each of these action steps, it is necessary to ask yourself the questions presented in this article, but you will also benefit from consulting an attorney knowledgeable in church and nonprofit law to ensure your governing documents, statement of faith, and action plans put you in the strongest position to remain consistent with your principles in light of coming legal challenges. You should consider conducting a legal values audit of your documents and policies or at least an employment/HR audit so that you are in the best position to respond to challenges in this area when they come. We have helped many churches and nonprofits evaluate their governing documents, statements of faith, employment policies, and other documents, and have helped them navigate a variety of legal issues. We would be happy to assist your church or organization as well.

While the text of the law is worrisome for churches and religious organizations with convictions about sexuality and marriage, the First Amendment may provide some protection. Nevertheless, it is important that your Church or religious organization define your religious beliefs now, rather than waiting to do so – or forcing the court to do so – during a legal challenge. Finally, if you have claim or lawsuit threatened or filed against you, contact us immediately so we can get you great representation and bring in the top constitutional experts like from Christian Legal Society and Alliance for Defending Freedoms.

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Disclaimer: This memorandum is provided for general information purposes only and is not a substitute for legal advice particular to your situation. No recipients of this memo should act or refrain from acting solely on the basis of this memorandum without seeking professional legal counsel. Simms Showers LLP expressly disclaims all liability relating to actions taken or not taken based solely on the content of this memorandum. We greatly appreciate the contributions to this article by Josiah Aden, Legal Assistant. Please contact Will Thetford at wrt@simmsshowerslaw.com for legal advice that will meet your specific needs.

[1] For an overview of other changes to Virginia employment, labor, and wage and hour law see our recent article here.
[2] Virginia law already protects against discrimination on the basis of race, color, religion, national origin, sex, or pregnancy, childbirth, or related medical conditions. Virginia Code § 2.2-3903.
[3] Cassandra Maas, Virginia lawmakers pass anti-discrimination legislation protecting LGBTQ individuals, Feb. 9, 2020, https://www.jurist.org/news/2020/02/virginia-lawmakers-pass-anti-discrimination-legislation-protecting-lgbtq-individuals/ WHSV, Governor Northam Signs Virginia Values Act, Apr. 11, 2020, https://www.whsv.com/content/news/Governor-Northam-signs-Virginia-Values-Act-569573551.html
[4] Virginia Values Act revising Virginia Code § 2.2-3906.
[5] Map by Movement Advancement Project, https://www.lgbtmap.org/equality-maps/non_discrimination_laws.
[6] Virginia Values Act revising Virginia Code § 2.2-3905(B)(1)(a).
[7] Virginia Values Act implementing new § 2.2-3905(B)(4).
[8] Virginia Values Act implementing new § 2.2-3905(B)(5).
[9] Virginia Values Act implementing new § 2.2-3905(B)(6).
[10] Virginia Values Act codified as new Va. Code § 2.2-3904.
[11] Travis Weber, Will Nonprofit Religious Organizations Withstand the Sexual Revolution in Law?, 29 Regent U. L. Rev. 259, 260-265 (2017), https://www.regent.edu/acad/schlaw/student_life/studentorgs/lawreview/docs/issues/v29n2/10_Weber_vol_29_2.pdf.
[12] Virginia Code § 36-96.2(C)
[13] Virginia Code § 36-96.2.
[14] Alliance Defending Freedom. “The Downtown Soup Kitchen d/b/a Downtown Hope Center v. Municipality of Anchorage. https://www.adflegal.org/detailspages/case-details/the-downtown-soup-kitchen-d-b-a-downtown-hope-center-v.-municipality-of-anchorage. Accessed 30 Mar. 2020.
[15] Christian Legal Society, Faith-Based Organizations Guidance for Same-Sex Issues, at 23, 2015.