Second Circuit ruling illustrates unresolved constitutional conflict likely headed for Supreme Court review
American courts continue to face a recurring clash: when claims of religious liberty come into direct conflict with claims of gender identity discrimination, which takes precedence? The legal framework has grown increasingly complex. On one side stands the Free Exercise Clause, shielding individuals and institutions from government hostility toward their religious practices. On the other stands state and federal commitments to ensure equal participation for transgender students. These two claims of discrimination, one religious and the other gender-based, cannot be reconciled easily, and the Supreme Court will eventually be asked to decide which constitutional value prevails when they collide.
The “most favored nation” theory provides one possible lens. It holds that if the state makes exceptions to a rule for some secular reasons, it must extend the same accommodation to religious objectors unless it has an overriding justification. In disputes like this one, that principle could mean that if athletic associations recognize some safety-based or fairness-based exceptions, they may also need to consider religiously motivated ones. This creates the possibility of framing such conflicts not just as religious liberty cases, but as equal treatment or fairness disputes that could be pursued even on secular grounds.
The Second Circuit’s September 9, 2025, decision in Mid Vermont Christian School v. Saunders illustrates the issue vividly. In 2023, Mid Vermont forfeited a girls’ playoff basketball game against Long Trail School, which fielded a transgender athlete. The Vermont Principals’ Association (VPA) responded by expelling Mid Vermont from all sanctioned competitions. When challenged, the district court upheld the VPA’s action as a neutral rule of general applicability. But the Second Circuit reversed, concluding that the VPA’s leadership displayed hostility toward the school’s religious beliefs and that the punishment was unprecedented and procedurally flawed .
The appeals court ordered Mid Vermont reinstated, finding that the school was likely to succeed on its Free Exercise claim. Yet the decision sidestepped the deeper conflict: whether protecting transgender participation in sports can justify excluding religious institutions that refuse to comply. For now, the ruling rests on hostility in enforcement rather than on whether one form of discrimination must yield to another.
This case underscores the constitutional impasse. Religious schools argue they should not be compelled to act against faith commitments, while associations and states insist that transgender students must be given equal athletic opportunities. Courts can resolve narrow disputes, but the broader question of how to balance these competing claims of discrimination remains unsettled. Until the Supreme Court speaks directly, lower courts will continue to issue piecemeal decisions that leave the underlying conflict unresolved.
Tags: Mid Vermont Christian School, Vermont Principals’ Association, transgender athletes, Free Exercise Clause, Supreme Court
Link to decision: https://ww3.ca2.uscourts.gov/decisions/isysquery/897a8ecf-a6e7-4065-9cdf-8377c988db2d/4/doc/24-1704_opn.pdf