He asked about his husband’s coverage before taking the job - the answer changed fast
Catholic Relief Services (CRS) discriminated against a gay IT analyst by revoking his husband’s dependent health insurance, a federal appeals court has affirmed.
The employee met CRS at a job fair in 2016. Before accepting the role, he told the recruiter he was gay and married, and asked whether his husband would be covered under the organization’s dependent health benefits.
The recruiter said yes. No caveats.
He joined CRS and enrolled his husband. Five months later, the organization reversed course - his husband’s enrollment had been a mistake, CRS said, because extending dependent benefits to a same-sex spouse was contrary to its religious values. CRS offered an alternative arrangement. The employee declined, and CRS terminated his husband’s coverage.
He stayed eight years before resigning in 2024. Then he sued.
CRS, a nonprofit affiliated with the Catholic Church, has more than 8,000 employees. It is governed by the United States Conference of Catholic Bishops and does not require most staff to adhere to the Catholic faith. The organization threw everything it had at the appeal: Title VII’s religious-employer exemption, the Religious Freedom Restoration Act (RFRA), the Free Exercise Clause, and the church autonomy doctrine.
The Fourth Circuit, in a 2-1 published decision on October 16, 2026, rejected all of them.
On Title VII, the court held - for the first time in the circuit - that section 702’s exemption for religious employers covers claims of religious discrimination only. It does not extend to sex, race, or national origin, even when the employment decision is also motivated by religion. Accepting the employer’s broader reading, the court said, would “allow the exemption to swallow the rule.”
The court also held that RFRA does not apply to lawsuits between private parties, joining the majority of federal circuits on that question. And it found the church autonomy doctrine did not reach a lay IT worker whose duties were “materially indistinguishable from those performed by individuals at secular organizations.”
The parties had stipulated to $60,000 in compensatory damages. The court affirmed the judgment on Title VII and Maryland’s Fair Employment Practices Act, and dismissed the Equal Pay Act appeal as moot.
For HR leaders at faith-based organizations, the practical takeaway is narrow but sharp: when the affected employee is not performing a spiritual or ministerial function, religious motivation alone will not shield a benefits decision from sex discrimination liability.
