By Daniel Wiessner

May 8 (Reuters) - A U.S. appeals court on Thursday said a federal judge in Texas lacked the power to order in-house lawyers at Southwest Airlines to attend "religious liberty training" after a flight attendant won a religious discrimination lawsuit.

A unanimous three-judge panel of the New Orleans-based 5th U.S. Circuit Court of Appeals said the 2023 ruling by U.S. District Judge Brantley Starr would do little to compensate the plaintiff, Charlene Carter, or compel compliance with an order barring Southwest from engaging in discrimination.

After a jury found for Carter, Starr ruled that Southwest had not complied with his orders and held the airline in contempt. In an unusual move, he ordered the lawyers to attend an eight-hour training conducted by Alliance Defending Freedom, a conservative Christian group that is routinely involved in high-profile court cases on abortion and religious liberties.

"When a court's contempt sanction in a civil matter is both overbroad in scope and undoubtedly punitive in nature, the judiciary risks appearing contemptuous," Circuit Judge Edith Brown Clement wrote.

The 5th Circuit last year had blocked Starr's ruling pending appeal, so the lawyers were never required to attend the training.

The court upheld the jury's finding that Southwest had discriminated against Carter based on her religious practice, but reversed a separate finding of discrimination based on her religious beliefs.

Southwest and the National Right to Work Legal Defense Foundation, which represents Carter, did not immediately respond to requests for comment.

Carter in a 2017 lawsuit accused Southwest of firing her for objecting on religious grounds to her union's participation in a protest for which Planned Parenthood was a sponsor. Carter, who also sued her union, says she is a Christian who opposes abortion.

Starr in 2023 awarded her $800,000 in damages and ordered Southwest to reinstate her after a jury ruled in her favor.

Later that year, the judge said that instead of notifying employees of their rights against religious discrimination, as he had ordered Southwest to do, in-house lawyers penned a memo warning workers not to violate company civility policies that led to Carter's firing. He required the training as a sanction.

Carter's lawyers defended the decision on appeal, arguing that Southwest in the memo suggested that it had not violated the law and could continue discriminating against employees. The 5th Circuit on Thursday disagreed.

"The sanction plainly exceeded remedial bounds and sought to punish Southwest’s attorneys through a directive that did little to coerce the airline’s compliance with the district court’s judgment," wrote Clement, an appointee of Republican former President George W. Bush.

She was joined by Circuit Judges Kurt Engelhardt and Cory Wilson, who are both appointees of President Donald Trump, a Republican.

The case is Carter v. Local 556, Transport Workers Union of America, 5th U.S. Circuit Court of Appeals, No. 23-10008.

For Carter: Matthew Gilliam of the National Right to Work

Legal Defense Foundation

For Southwest: Shay Dvoretzky of Skadden Arps Slate Meagher & Flom

For the union: Adam Greenfield of Cloutman & Greenfield

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