A healthcare system operating hospitals and clinics in Illinois and Wisconsin has agreed to pay more than $1 million in monetary relief to a class of employees and has offered to reinstate employees it terminated for refusing to comply with the organization’s COVID-19 vaccine policy. The settlement, announced on August 13, 2025, follows an investigation by the US Equal Employment Opportunity Commission (EEOC).
The EEOC’s investigation found reasonable cause to believe that the healthcare system discriminated against employees based on their religion by denying them a religious accommodation and either terminating their employment or subjecting them to a wage deduction. The agency also found reasonable cause to believe the healthcare system discriminated against a class of similarly situated employees across all its facilities from September 2021 to May 2022 by denying them the opportunity to request a religious accommodation. Instead, the organization either terminated their employment or withheld money from their pay.
The agreement resolves charges alleging that the healthcare system discriminated against employees based on religion when it denied religious accommodations to those who requested exemption from receiving the COVID-19 vaccine. The charges further alleged that unvaccinated employees who were denied a religious accommodation could continue working only if they signed a form allowing the company to deduct a $60 monthly “vaccine incentive charge” from their wages. Employees who neither got vaccinated nor signed the wage deduction form were terminated, without consideration for any religious accommodations.
Such conduct violates Title VII of the Civil Rights Act of 1964, which prohibits discrimination based on religion. Following the EEOC’s investigation, the parties engaged in a pre-litigation conciliation process, resulting in a three-year agreement.
Under the agreement, the healthcare system must provide back pay and compensatory damages to the affected individuals. It is also required to recirculate its policies, train human resources personnel and decision-makers on handling religious accommodation requests, and report to the EEOC on such requests and decisions related to any system-wide vaccination program.
Compliance Perspective
Issue
Religious discrimination occurs when an applicant or employee is treated unfavorably because of their religious beliefs. Federal law protects not only individuals who adhere to traditional, organized religions—such as Buddhism, Christianity, Hinduism, Islam, and Judaism—but also those with sincerely held religious, ethical, or moral beliefs. Discrimination is prohibited in all aspects of employment, including hiring, firing, compensation, job assignments, promotions, layoffs, training, fringe benefits, and other terms or conditions of employment. Employers are required to reasonably accommodate an employee’s religious beliefs or practices unless doing so would impose an undue hardship on business operations.
Discussion Points
- Review and update policies to ensure they clearly address religious accommodations and protections. Policies should outline how employees can request accommodations and how such requests will be evaluated and documented. Working with an experienced consultant can help ensure that policies remain compliant with evolving federal guidance and reflect best practices across similar healthcare settings.
- Conduct regular training on anti-discrimination laws, with an emphasis on religious rights in the workplace. All employees should understand their rights, how to report concerns, and protections against retaliation. Supervisors and HR personnel should receive targeted instruction on handling accommodation requests and responding appropriately to complaints. To support ongoing staff education, Med-Net Academy offers the course Fraud Module 5 – Understanding Harassment and Discrimination, which reviews the laws that prohibit workplace discrimination and harassment. The course explains the differences between the two, outlines how to report concerns, and provides guidance on prevention strategies for a respectful and compliant work environment.
- Implement periodic audits, including anonymous staff surveys, to assess whether employees have experienced or observed religious discrimination. Include questions that evaluate whether employees feel safe reporting such issues without fear of retaliation. Facilities may benefit from partnering with external reviewers to conduct mock surveys or focused assessments that help identify gaps in current practices and proactively address potential areas of concern.
*This news alert has been prepared by Med-Net Concepts, Inc. for informational purposes only and is not intended to provide legal advice.*