The Supreme Court ruled unanimously Thursday in favor of Catholic Social Services, an adoption and welfare agency, in a discrimination case.

The City of Philadelphia contracted with the agency for foster care services. Philadelphia declined to renew Catholic Social Services’ contract with the city because it was out of compliance with a local regulation that forbids discrimination (the Fair Practices Ordinance), as well as a non-discrimination clause in the contract that Catholic Social Services entered into. Specifically, Catholic Social Services refused to provide foster care services to same-sex couples.

The Supreme Court ruled that Philadelphia’s application of the anti-discrimination provision violated the Free Exercise Clause of the First Amendment. Philadelphia had granted waivers to its policy in the past, and the regulation at issue stated that Philadelphia was able to grant such waivers at its sole discretion. The court held that Philadelphia’s unwillingness to do so for Catholic Social Services was a violation of the First Amendment.

The court evaluated this case under the strict scrutiny standard of the First Amendment, which requires that a discriminatory law is narrowly tailored to achieve a compelling state interest. In this case, Philadelphia’s application of the waiver system was discriminatory because they only granted waivers to certain groups. Although laws incidentally burdening religion are generally not evaluated under strict scrutiny, this regulation was because not neutral or generally applicable.