Appeals Court Rules Catholic Charity Violated Title VII

A divided Fourth Circuit panel found Catholic Relief Services discriminated against an employee by ending health coverage for his same-sex spouse.

Updated on Nov. 4, 2026 in Human Resources

Appeals Court Rules Catholic Charity Violated Title VII

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Should religious employers be allowed to deny spousal health benefits to same-sex couples?

The 4th U.S. Circuit Court of Appeals ruled that Catholic Relief Services violated Title VII when it terminated health insurance benefits for a male employee's same-sex spouse. A federal district court had ruled in the employee's favor before the appeals court affirmed the judgment in a divided decision.

Why it matters

The ruling holds that the Title VII religious exemption does not shield sex discrimination motivated by religious beliefs, which bears on how religious employers across the United States may treat employee spousal benefits. The court also rejected a categorical First Amendment defense for a decision involving a non-ministerial employee.

The employee joined the organization in 2016 as a data analyst and enrolled his husband in the dependent health plan before coverage was terminated as approved in error. The extraction does not specify any monetary damages awarded in the case.

The players

Catholic Relief Services

Catholic Relief Services is the international humanitarian agency of the U.S. Catholic community, which was the defendant in the employment discrimination case.

The details

Catholic Relief Services informed the employee that spousal coverage had been approved in error and terminated it several months after enrollment. The employee sued alleging discrimination based on sex and sexual orientation, and the nonprofit argued that religious protections under federal and state law and the First Amendment shielded its decision.

2016: The employee joined Catholic Relief Services and enrolled his husband in coverage.
Several months after enrollment: The nonprofit terminated the spousal coverage.
November 4, 2026: The 4th Circuit ruled against Catholic Relief Services.

Legal Context

The ruling applies the scope of the Title VII religious exemption, which the court held does not cover sex discrimination based on religious motivation. It also limits how far First Amendment protection extends to employment decisions by non-ministerial staff.

Employees at religious nonprofits may find that spousal health benefits offered to other staff cannot be cut off on religious grounds alone under Title VII. Employers should review how dependent coverage decisions are made and documented.

The takeaway

Employers with religious missions should review spousal benefit policies under current Title VII interpretation before making coverage changes. Employees should confirm how dependent enrollment is treated and whether approvals can be reversed.