IT worker’s same-sex spousal benefits denial costs Catholic Relief Services $60K

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.”