By Daniel Wiessner
(Reuters) - The U.S. Department of Labor on Tuesday withdrew a rule adopted in the last days of the administration of former Republican President Donald Trump that had expanded a religious exemption from anti-discrimination laws for federal contractors.
The department's rescission of the 2021 rule, which had been criticized by civil rights groups, restores a previous, narrower exemption that allows churches and their affiliates to only hire members of their religion.
The Trump-era rule had broadened the exemption to cover any employers who "hold themselves out to the public as carrying out a religious purpose," rather than only organizations with an explicitly religious mission.
The Trump administration framed the rule as a necessary step to ensure the full participation of religious organizations in the federal contractor system.
The federal government spent about $650 billion on federal contracts in fiscal year 2021.
But critics of the rule, including LGBTQ advocacy groups, warned that it would open the door to discrimination based on race, sex, and other protected traits. In 2014, the Labor Department banned contractors from discriminating against workers on the basis of sexual orientation and gender identity.
Jenny Yang, the director of the Labor Department's Office of Federal Contract Compliance Programs, in a statement said withdrawing the rule would ensure that the exemption is "applied to the facts and circumstances of each contractor."
The withdrawal of the rule was opposed by religious advocacy groups, some religious colleges and universities, and many Republicans in Congress.
In public comments, they said the Trump-era rule created a clearer standard that would encourage religious employers to become federal contractors and was more in line with recent U.S. Supreme Court rulings involving religious liberty.
The Labor Department on Monday said the rule was actually out of step with those decisions, creating inconsistencies in the way courts and the department applied religious exemptions.