Employers Beware: The Potential Employment-Related Impacts of 303 Creative LLC v. Elenis

This blog was republished by Law360 on August 22, 2023.

On the final day of the 2022-23 term, the U.S. Supreme Court issued its decision in 303 Creative LLC v. Elenis. In its decision, the Supreme Court held that forcing a single-member company to design websites for weddings of same-sex couples would violate the First Amendment’s Free Speech Clause.

While not an employment case, the Court’s decision in 303 Creative raises serious questions for employers who constitute public accommodations and have related anti-discrimination policies. Thus, as we have written recently, religious rights in the workplace remain a front and center issue for employers.

Case Background

In 303 Creative, Lorie Smith, through her website and graphic design company, brought a lawsuit against the Colorado Civil Rights Commission and Colorado Attorney General. In the lawsuit, Ms. Smith sought an injunction preventing Colorado from using the Colorado Anti-Discrimination Act to compel her to create websites for weddings of same-sex couples. Ms. Smith claimed that forcing her to create websites for same-sex weddings would defy her religious beliefs and compel speech from her that she does not believe.

The Tenth Circuit Court of Appeal (covering Colorado and several nearby states) denied Ms. Smith’s request for an injunction. It acknowledged that the planned websites qualify as protected speech under the First Amendment but found that Colorado had a compelling interest in ensuring “equal access to publicly available goods and services.” It also found that compelling Ms. Smith to offer her “unique services” was necessary to satisfy that interest.

In a 6-3 decision, the Supreme Court reversed the Tenth Circuit and held that forcing Ms. Smith to create websites expressing views inconsistent with her own religious beliefs would violate the Free Speech Clause of the First Amendment. The Court recognized that states have a “compelling interest” in eliminating discrimination in places of public accommodation and could extend public accommodations laws to protect persons based on sexual orientation. At the same time, however, the Court found that Ms. Smith’s intended creations qualify as speech, and that public accommodations laws cannot “sweep too broadly” to compel protected speech under the First Amendment.

The Potential Impacts of 303 Creative in the Employment Context

There is no shortage of open questions in the wake of 303 Creative. For example, where is the line between the “innumerable goods and services that no one could argue implicate the First Amendment” and “expressive services” that constitute speech? And how would the outcome of the case change if the expressive content being offered by Ms. Smith was virtually the same for everyone, as opposed to “customized and tailored” to each couple?

Although most of the questions focus on the interaction between free speech protections and public accommodations laws, there are also less obvious questions that arise in the employment context.

• • More religious objections to providing services to certain customers First, the ruling in 303 Creative arguably expands the ability of employees who work for places of public accommodation to deny services to customers based on religious grounds. This is especially true given the Supreme Court’s decision in another recent case, Groff v. Dejoy.

    As we recently described, in Groff, the Supreme Court reinterpreted the meaning of “undue hardship” for Title VII religious accommodations and left unanswered questions regarding the application of the “new” standard for employers and courts. Similarly, 303 Creative presents unanswered questions regarding an employee’s ability to object to providing services to customers based on the employee’s asserted religious beliefs.

    Imagine, for example, that instead of being “the sole member-owner” of a company, the website designer in 303 Creative was an employee of a mid-sized or large company. Even though the employer might not be opposed to designing a website for a same-sex wedding, the individual employee (i.e., the content creator) might object to the website on religious grounds and seek an exemption or accommodation to avoid working on the project.

    Before 303 Creative and Groff, the employer might have been able to deny the request and claim an “undue hardship” based on its need to comply with applicable public accommodations laws. But now, considering the rulings in 303 Creative and Groff, it is unclear whether the employer would have to accommodate the employee’s request. It might depend, in part, on whether the company has its own anti-discrimination policies, or whether there are other, non-objecting employees who can work on and complete the project. Regardless, it is at least possible that the combination of 303 Creative and Groff will lead more employees to raise religious objections to certain projects or workplace policies.

• • More political retaliation claims

The ruling in 303 Creative also might increase the threat of political retaliation claims and further constrain an employer’s ability to discharge or otherwise discipline an employee for denying services to certain customers.

A wide variety of state laws prohibit or constrain an employer from discriminating against an employee based on the employee’s political or voting activities. The California Labor Code, for example, prohibits an employer from attempting to coerce or influence its employees’ political activities through threat of discharge or loss of employment. Liability under these sections of the Code is triggered if the employer fires an employee based on a political motive.

In the aftermath of 303 Creative, employers potentially face greater exposure to retaliation claims under these types of statutes. If an employer threatens to discharge an employee for refusing to work on certain projects based on a First Amendment objection, for example, the employee might feel emboldened by 303 Creative to claim that the employer’s threat is motivated by animus toward the employee’s political beliefs. Thus, while employers may still enforce public facing anti-discrimination policies and discharge employees for failing to comply with those policies, they may face additional exposure to political retaliation claims for doing so.

Conclusions

• The Supreme Court’s decision in 303 Creative raises serious questions with respect to a business’s ability to deny services to certain customers based on free speech protections under the First Amendment.
• While employees cannot bring First Amendment claims against private employers, the decision could also lead employees to seek more religious exemptions to serving certain customers or complying with public facing anti-discrimination policies, or threaten more political retaliation claims in the face of potential discharge.

These examples are illustrative and not exhaustive of the potential employment issues stemming from this decision, and employers should exercise caution when dealing with employees who raise objections to providing services to certain customers on religious or First Amendment free speech or expression grounds.