This Act shall not apply to a corporation, association, educational institution or institution of learning, or society that is exempt from the religious discrimination provisions of title VII of the Civil Rights Act of 1964 ... pursuant to section 702(a) or 703(e)(2) of such Act.Section 702(a) exempts any" religious corporation, association, educational institution, or society.... " Section 703(e)(2) exempts any school, college, university, or other educational institution or institution of learning [which] is, in whole or in substantial part, owned, supported, controlled, or managed by a particular religion or by a particular religious corporation, association, or society, or if the curriculum of such school, college, university, or other educational institution or institution of learning is directed toward the propagation of a particular religion."
At the last minute, the Senate also added a provision to the bill (Sec. 6(b)) to protect religious employers from adverse governmental action in connection with exercise of the exemption:
A religious employer's exemption under this section shall not result in any action by a Federal agency, or any State or local agency that receives Federal funding or financial assistance, to penalize or withhold licenses, permits, certifications, accreditation, contracts, grants, guarantees, tax-exempt status, or any benefits or exemptions from that employer, or to prohibit the employer's participation in programs or activities sponsored by that Federal, State, or local agency. Nothing in this subsection shall be construed to invalidate any other Federal, State, or local law (including a regulation) that otherwise applies to a religious employer exempt under this section.The Senate, by a vote of 43-55 rejected Senate Amendment 2013 which would have broadened the definition of exempt religious employers.
Reacting to the bill, the American Family Association complained:
ENDA would force religious business owners and workplaces such as Christian bookstores, religious publishing houses, pre-schools and religious television and radio stations to accept as normal any employee who has had a sex-change surgery, is considering a change, or just thinks they are the opposite sex of what they really are.