Labor & Employment Law Daily Wrap Up, DISCRIMINATION—D. Md.: Religious entity exemption inapplicable to gay, married man’s sexual orientation discrimination claim, (Apr 23, 2025)

By Tulay Turan, J.D.

The exemption applies to MFEPA claims where an employee performs duties that directly further the entity’s core mission.

Catholic Relief Services was not entitled to the religious entity exemption under the the Maryland Fair Employment Practices Act (MFEPA) in a gay employee’s sexual orientation discrimination claim against it, a federal district court in Maryland ruled. The exemption was inapplicable where the employee’s duties did not directly further CRS’s core mission. Thus, CRS’s termination of the employee’s same-sex spouse’s health benefits violated the MFEPA, and the court ordered judgment in the employee’s favor (Doe v. Catholic Relief Services, No. 1:20-cv-01815-JRR (D. Md. Apr. 21, 2025)).

Catholic Relief Services, which is a social services agency whose mission is to serve the poor and vulnerable overseas, hired the employee, who is a gay, cisgender man married to another man, in 2016. His spouse received spousal health benefits from CRS from June 2016 until October 2017.

Operations. Within CRS’s overseas operations department is its flagship program, Changing the Way We Care, which is “designed to end the institutionalization of children” and promote family-based care. In addition, CRS uses Gateway, which is an agency-wide administrative tool built on the Salesforce.com platform. Gateway contains a number of applications, including the Pipeline and Projects Application. CRS also uses Monitoring, Evaluation, Accountability and Learning (MEAL), which provides a framework for monitoring and evaluating CRS projects.

Employee’s positions. Overall, the employee held five positions during his employment with CRS. None of them were ministerial or explicitly religious in nature. He did not provide humanitarian relief in any of his roles.

Previous proceedings. In June 2020, the employee filed a 10-count complaint of sex discrimination against CRS with a bench trial occurring four years later. Four of the ten claims were dismissed, and, after discovery, the judge granted judgment for the employee on his claims of sex discrimination in violation of Title VII and the EPA, and judgment for CRS on his claims of retaliation. The judge denied the parties’ cross motions as to his claims of sex and sexual orientation discrimination under the Maryland Fair Employment Practices Act (MFEPA) and Maryland Wage Payment & Collection Law (MEPEWA) pending certification of three questions to the Maryland Supreme Court in Doe v. Cath. Relief Servs., 484 Md. 640 (2023) (Doe III).

Certified questions. The three certified questions were: (1) whether the prohibition against sex discrimination in the MFEPA prohibits discrimination on the basis of sexual orientation; (2) whether the MFEPA applies to a religious corporation, association, education institution, or society with respect to the employment of individuals of a particular sexual orientation or gender identity to perform work connected with all activities of the religious entity or only those that are religious in nature; and (3) whether the prohibition against sex discrimination in the MEPEWA prohibits discrimination on the basis of sexual orientation.

The Supreme Court of Maryland answered “no” to the first and third questions. As to the second question, the court concluded that “the language of the exemption is ambiguous.” It held, “Giving the exemption its narrowest reasonable reading, we conclude that the General Assembly intended to exempt religious organizations from these kinds of MFEPA claims brought by employees who perform duties that directly further the core mission (or missions) of the religious entity.”

Stipulations, bench trial. After receipt of the Supreme Court of Maryland’s decision on the certified questions, the parties filed stipulations of dismissal with prejudice as to the employee’s claim of sex discrimination under both the MFEPA and the MEPEWA. The parties also stipulated to the employee’s damages, agreeing that he is entitled to $60,000 in compensatory damages corresponding to any and all claims for which CRS has been found liable or may be found liable. The parties then proceeded to a bench trial on his claim of sexual orientation discrimination under the MFEPA and CRS’s affirmative defense that it is exempt pursuant to the statute’s religious entity exemption.

The parties agreed that the court’s determination of whether the employee has prevailed on the sexual orientation discrimination claim turned on application of the exemption. The employee argued the exemption is inapplicable, while CRS argued the opposite.

Religious entity exemption. Before analyzing the applicability of the exemption, the court noted the Maryland Supreme Court had offered guidance to courts on conducting the analysis. The guidance contained five aspects, two of which the parties focused on in advancing their trial arguments as to whether the employee directly furthered a core mission of CRS. First, a court should conduct a fact-intensive inquiry that requires consideration of the totality of the pertinent circumstances. Second, when referring to duties “directly” furthering the core mission of a religious entity, the Maryland Supreme Court meant “duties that are not one or more steps removed from taking the actions that effect the goals of the entity.”

Core mission. Reviewing the employee’s five full-time positions with CRS, the court found that none of the positions directly furthered a CRS core mission, and that each of his positions was one or more steps removed from taking actions that effected CRS’s goals.

The evidence demonstrated that his Gateway Team duties and responsibilities were sufficiently apart from effectuating CRS goals and core mission such that his Gateway job activities and responsibilities were far attenuated from, and not reasonably capable of bringing about CRS goals or missions. He did not directly serve the poor and vulnerable overseas, solicit or secure funding for projects, or possess authority to determine how CRS would pursue its mission through its programs. Nor did he manage or supervise any employee with such responsibilities. The trainings he conducted focused on how to use the Pipeline and Projects application, including inputting and accessing the data therein.

Collection and reporting of data. The court also conducted a fact-intensive inquiry into the employee’s MEAL-specific duties with the Changing the Way We Care Team, concluding that he did not directly further or effectuate a CRS mission in that role. He collected data from MEAL leads in each project, compiled data into a quantitative portion of the quarterly report provided to donors and coordinated monthly webinars. His duties did not include securing or soliciting funding for the Changing the Way We Care participants. He did not make decisions about the programmatic goals or its efforts to fulfill its mission. His duties were focused on aiding CRS in its collection and reporting of data related to the Changing the Way We Care Program. Based on the foregoing, the court found by a preponderance of evidence that his MEAL-related duties did not directly further or effectuate a CRS mission because he was “one or more steps removed from taking the actions that effect” CRS’s goals and core mission.

Exemption is inapplicable. Based on the court’s finding that the employee’s positions did not directly further a CRS mission, the court concluded that CRS did not meet its burden to show that MFEPA’s religious entity exemption applied here. The court rejected CRS’s argument that the Maryland Supreme Court intended the exemption to capture only a “small class of workers who perform generic, entry-level, and likely lower-compensated tasks.” Rather, the Maryland Supreme Court called for a fact-specific analysis based on the totality of circumstances, which the court has undertaken here.

MFEPA violation. Next, the court found that CRS violated the MFEPA in its termination of the employee’s spousal health benefits for his same-sex spouse. It was undisputed that CRS terminated the employee’s spousal health benefits because he is a man married to another man. It was also undisputed that opposite-sex spouses of domestic employees of CRS who met the minimum requirements for weekly hours were eligible for dependent health benefits. Thus, the employer violated the employee’s rights under the MFEPA.

Neutral and generally applicable law. Finally, applying rational basis review to CRS’s free exercise of religion claim, the court found CRS failed to demonstrate that the MFEPA was not neutral and generally applicable in its application to CRS. The court rejected CRS’s argument that the MFEPA was not neutral and generally applicable because it exempts “comparable” employers of 15 or fewer employees. CRS argued it, an 8,000-person organization, was comparable to an employer with fewer than 15 employees.

The court found CRS was “too liberal in its understanding of the word ‘comparable.’” CRS’s secular counterpart – a large, secular nonprofit – is subject to identical treatment under the MFEPA. Conversely, a religious employer of fewer than 15 employees would be exempt from MFEPA in the same manner as would be a secular employer with fewer than 15 employees. In other words, potentially exempt employers include religious and secular employers alike. “That MFEPA has some limitation in its application does not render it not neutral and generally applicable, and CRS offers no argument to suggest how it is comparable to exempt employers,” the court wrote.

Not an individualized exemption. The court also rejected CRS’s argument that MFEPA is not neutral and generally applicable in light of Doe III because the court is now tasked with conducting a fact-intensive inquiry to determine the applicability of MFEPA’s religious entity exemption. According to CRS, a Doe III-based application of the religious entity exemption now constitutes “a mechanism for individualized exemptions” under Fulton v. City of Philadelphia, 593 U.S. 522 (2021).

The court disagreed, explaining that Fulton arose from a circumstance where the government had a system of individual exemptions in which it exercised discretion to assess an individual’s claim of religious hardship. This case, and MFEPA, are materially distinct from the circumstances in Fulton. The exemption at issue here is categorical and statutory, not discretionary in nature. It does not require state approval or disapproval. The fact-specific analysis required by Doe III provided the foundation on which to apply a test to determine if the exemption applies in a given case. Such inquires are “common as dishwater,” the court said, in deciding whether or not a particular statutory exemption or exception applies. The court did not find the question before it similar to the mechanism of individualized exemptions discussed in Fulton. Thus, CRS’s argument that MFEPA was unconstitutional in its application to CRS failed.

Accordingly, the court entered judgment of $60,000 in favor of the employee on the MFEPA sexual orientation discrimination claim.

The case is No. 1:20-cv-01815-JRR.

Judge: Rubin, J.

Attorneys: Shannon Clare Leary (Gilbert Employment Law) for John Doe. David William Kinkopf (Gallagher Evelius & Jones) for Catholic Relief Services.

Companies: Catholic Relief Services

Cases: Discrimination SexDiscrimination StateLawClaims Exemptions MarylandNews