Suing Religious Employers: The Extent of Exemptions in Title VII

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Jack Derwin:  Hello and welcome to this Federalist Society virtual event. My name is Jack Derwin, and I’m Associate Director of Practice Groups here at The Federalist Society. Today, we’re excited to host a panel discussion titled “Suing Religious Employers: The Extent of Exemptions in Title VII.” Joining us today is an accomplished panel of labor law and religious liberties experts who bring a range of views to the topic. In the interest of time I’ll keep intros brief now, but you can view our speakers’ full bios at fedsoc.org.

 

Professor Carl H. Esbeck is the R.B. Price professor emeritus of law and Isabell Wade and Paul C. Lyda Professor Emeritus of Law at the University of Missouri School of Law. He has published widely in the area of religious liberty and church-state relations and has taken the lead in recognizing that the modern Supreme Court has applied the establishment clause not as a right but as a structural limit on the government’s authority in specifically religious matters.

 

Ms. Jennifer Goldstein is Associate General Counsel at the Equal Employment Opportunity Commission where she leads the Office of General Counsel’s Appellate litigation division. She oversees the filing of commission party and amicus briefs in the U.S. Court of Appeals on a range of issues arising under federal antidiscrimination statutes, including religious discrimination.

 

Finally, Ms. Sharon Fast Gustafson is the immediate past General Counsel of the U.S. Equal Employment Opportunity Commission where she enforced Title VII of the Civil Rights Act, the Americans with Disabilities Act, and the Age Discrimination in Employment Act, among other federal statutes. She’s now principal at Sharon Fast Gustafson, PLC.

 

After opening remarks and discussion between our panelists we’ll go to audience Q&A, so please enter any questions for our speakers into the Q&A function at the bottom right of your Zoom window. We’ll remind you of that later on. Finally, I’ll note that as always all expressions of opinion are those of the speakers joining us today. With that, we’ll go now to opening statements. Professor Esbeck, the floor is yours.

 

Prof. Carl H. Esbeck:  All right. Thank you, Jack. Our primary topic this morning or at least it’s the morning in my time zone, I guess afternoon out east -- is the religious employers’ exemption in Title VII, which is in 702(a). So just as a shorthand matter, we’re quite often going to just refer to this as 702(a) or the 702(a) exemption.

 

It is an affirmative defense. It begins as “this subchapter shall not apply to.” And the subchapter there is all of Title VII. So the exemption at least textually as it begins out is very broad. It takes out of play everything else in Title VII if you can comply with what follows in order that you can avail yourself of the affirmative defense.

 

Now, I want to momentarily just put that to the side because the panel earlier decided I would supply a little bit of context in terms of the wider religious liberty issues here. 702(a) is by no means the only religious defense. So it’s common in these employment discrimination cases for the defendant to raise RIFRA or the Religious Freedom Restoration Act of 1993.

 

In addition it’s common for the defendant to raise the ministerial exception, which is a type of church autonomy defense. And it’s based upon the two religion clauses of the First Amendment. Insofar as it speaks to employment discrimination, it speaks to where the job is that of a minister or other religious functionary.

 

A third sort of defense if the facts fit is under the free speech clause. And I’ll just analogize that to the pending religious liberty case called 303 Creative. That is a discrimination case, but it’s a public accommodations discriminations case. But nonetheless the defense is that the antidiscrimination provisions are causing the defendant or forcing the defendant to speak in a way that he or she would prefer not to speak, and therefore it’s forced speech in violation of the free speech clause.

 

And then a fourth category of defense is under the free exercise clause, and there we have to divide. If the claim by the defendant is that they’re the object of religious targeting by the government, then that’s prohibited by the free exercise clause. We call that a Lukumi case or more recently the Masterpiece Cakeshop case. Again, the way that could come up is say if the EEOC was the plaintiff, brought its own action, so they’re a governmental actor of course, and the defendant is claiming that they’re the object of religious targeting. And that’s prohibited by the free exercise clause. On the other hand if there’s not targeting, then the Smith case controls -- we have a law which is generally applicable, no religious targeting. And therefore no free exercise defense.

 

Then let me also tag on that it’s becoming I don’t want to say common, but it’s certainly frequent where plaintiff’s counsel chooses to file their claims not under Title VII but under the state human rights acts. And that can be workable for plaintiff’s counsel in about half the states. I guess we would say the more progressive states or blue states where the state’s human rights act either has no religious employer exemption or very narrow one, more narrow than 702(a), and there’s no statewide RIFRA.

 

About half the states have adopted a RIFRA somewhat patterned after the federal RIFRA. The federal RIFRA doesn’t apply as to state action. But if you’re in half those states where there’s a state RIFRA, of course filing in state court under the state human rights act doesn’t get you around that. But in many cases the more progressive or blue states are those that do not have statewide RIFRAs.

 

So you can see the advantage of filing your discrimination claim in state court. There would be no RIFRA, and you would have at least presumably a somewhat narrower religious employer exemption. Nonetheless, you still would face the ministerial exception. You still would face the free exercise clause and of course the free speech clause. All right.

 

Well, now let me circle back with that sort of putting things in context -- back to 702(a), which as I said is an affirmative defense. And again, 702(a) begins “This subchapter shall not apply” or you could rephrase it Title VII or claims under Title VII shall not apply if you otherwise meet the requirements of 702(a). And there are two.

 

One is that you have to be a religious organization. And I think some of my fellow panelists -- that’s a term, religious organization, that’s not otherwise defined in the statute. So it has some case law definition. And some of that case law is a little bit conflicting. So let me leave that as an issue that we’ll be coming back to, my fellow panelists and perhaps me as well.

 

And then the second requirement to avail yourself of 702(a) is that you have -- you the employer, have a religious reason for the adverse employment decision that the plaintiff is complaining about. And quite often of course if you have a religious reason, that becomes an issue of contention. And quite often the plaintiff’s response to that claim that you have a religious reason for that adverse employment decision -- the plaintiff will come back and claim pretext. All right.

 

Well, there is at least two, maybe more, responses to 702(a) being more difficult for the employer to satisfy than what I outlined for you, the two elements or two requirements. One is called the co-religionist argument. The argument is that the exemption is really quite narrow. It applies only where the employer is Baptist and wants to hire Baptists or the employer is Catholic and wants to hire only Catholics or the employer is Jewish and wants to hire only Jewish people for employment.

 

I guess my initial responses to that -- of course I don’t think that that’s at all correct. First of all, it’s completely at odds with the text. Again, the text of 702(a) is “This subchapter shall not apply,” subchapter being all of Title VII. And there’s much more to Title VII than just a Baptist employer wanting to hire only Baptists.

 

But that argument is also contrary to the definition of religion. A definition of religion was added in 1972 to Title VII. It’s over in Section 701(j). And it’s quite a broad definition. It says “All aspects of religious belief and practice.” So when the term “religion” applies, it’s all aspects of religious beliefs and practice. So of course that goes way beyond just a preference to hiring your co-religionists.

 

The other response is, I think, a little bit more serious, and that is that the exemption only applies when the plaintiff brings a claim of religious discrimination, not discrimination under one of the other protected classes. Again, this is contrary to the text. The text says “This subchapter shall not apply.” It doesn’t say 702(a) is a valid exemption only when the plaintiff brings a claim of religious discrimination. The subchapter is all of Title VII.

 

So that would include even claims of retaliation or harassment or hostile environment because all of those come from the subchapter or Title VII. There are cases going both ways. The Supreme Court has never addressed this issue, so we have a circuit split.

 

I guess I would just draw your attention -- and it’s the last thing I’ll say by way of opening remarks. I draw your attention to a concurring opinion by Judge Easterbrook, who of course is quite well known, has been on the bench quite a long time. And he’s in the Seventh Circuit Chicago. And in a case called Starkey v. The Archdiocese of Indianapolis he said, well, there’s really no way that you can limit a term like this subchapter to something meaning only if the plaintiff brings a claim of religious discrimination.

 

Plus, if it was so narrowed, then it would be easily manipulated by plaintiff’s counsel, simply to avoid bringing a claim of religious discrimination. Couch your claim as sex discrimination or hostile environment or retaliation or so on, and you’ve easily sidestepped an exemption that Congress obviously was serious about protecting religious organizations. So with that, I think we prearranged I would pass the mic to Sharon Gustafson.

 

Sharon Fast Gustafson:  Thank you. Happy to be here and to be talking about this topic which to me is an interesting topic. I agree with what Professor Esbeck has said in large part. I think that what is happening now is that plaintiffs are bringing harassment claims or retaliation claims and saying these are not protected by 702(a).

 

I think that’s wrong. I think section 702(a) does clearly protect those claims where there is a religious reason for the action that the employer took. And the Fourth Circuit in the Kennedy v. St. Joseph’s Ministries case, which is a 2011 case, says that 702(a) enables religious organizations to create and maintain communities composed of those faithful to their doctrinal practices. And that was a case in which the Fourth Circuit found that a Catholic hospital was protected by 702(a) when a church from another denomination alleged harassment and retaliation on account of her modest dress.

 

So there’s always the possibility that an employee can prove pretext and that he may have a Title VII claim. But if a religious employer has made an employment decision for religious reasons based on a religious belief or observance or practice, 702(a) controls.

 

I think it’s good to remember that under the U.S. Constitution the general rule is that people have a right to freedom of association and freedom of religion. And there are exceptions. Title VII is one of them. But 702(a) is an exemption to that exception which basically restores to religious employers their constitutional right to associate with or employ those who are faithful to their religion.

 

My focus today, though, is going to be on what is a religious organization covered by Title VII. Title VII doesn’t define it, and the courts have applied 702(a) not only to churches and other houses of worship but also to religious schools and hospitals and charities. There aren’t a lot of cases about what qualifies an entity for 702(a) exemption because usually but not always it’s quite obvious.

 

The Supreme Court hasn’t interpreted it. The circuit courts have differences of opinion about it. The courts have recognized that the statute doesn’t mention nonprofit or for-profit status, although that is a factor that is almost always considered. And the courts have also recognized that engaging in secular activities does not disqualify an employer from being a religious organization and that religious organizations don’t need to be affiliated with a house of worship in order for 702(a) to apply.

 

Some courts, and by way of example I’ll point out the Ninth Circuit in EEOC v. Townley, have defined the religious institutions as those whose purpose and character are primarily religious by weighing all signification religious and secular characteristics and determining whether the institution is primarily secular or primarily religious. In that case there was a Christian employer who covenanted with god that their business would be a Christian faith-based business. And they included gospel messages in their outgoing correspondence and in their internal company documents.

 

They provided financial assistance to churches and missionaries. They held a weekly devotional service. And an applicant signed a statement of faith and agreed to attend these devotional services. But after he was hired, he announced that he was an atheist. And the EEOC brought a religious discrimination case on his behalf. And the Ninth Circuit noted that Townley Manufacturing produced a secular product, was not affiliated with a church, and did not mention a religious purpose in its formation documents. And the court weighed all the factors and found that it was not primarily religious and therefore it did not qualify for the 702(a) exemption.

 

But I want to point out that the primarily religious test is problematic because so much of what religious people do to practice their religious beliefs appears secular to most people. In fact perhaps the only things that Christians do, and I’m speaking from my experience, that appears completely religious might involve baptism, communion, and prayer. And the first two of those don’t happen in the workplace. And the prayer in the workplace would be expected to take only a few minutes of each workday.

 

But for many, practicing religion involves what people think of as secular things: feeding the hungry, tending the widows, adopting the orphans, assisting the immigrants. You know the list. It goes on and on -- and nursing the sick in hospitals. And although this appears entirely secular, religious corporations are sometimes established to accomplish these purposes. And those corporations also have to hire bookkeepers and groundskeepers and the like. And 702(a) protects them if they have a preference to hire those who agree with their religious beliefs and practices.

 

So it’s important -- I’m a practitioner. It’s important if you’re advising religious organizations that you make sure that they consider very carefully their articles of incorporation, their statement of core beliefs, their employee handbooks, and other such things. The First Liberty Institute, which I am associated with, is a public interest law firm dedicated to protecting religious liberty. And they’ve prepared a religious liberty protection kit for religious employers that describes these things in more detail.

 

The EEOC guidance lists nine factors that the courts consider about whether an employer is a religious employer. And I’m not going to go through all those now. You can find them in the guidance.

 

The EEOC guidance says that where an employer asserts a 702(a) defense, the commission will consider all of the facts. And although there’s a lack of clarity about the definition of religious employer under 702(a), there are two things about 702(a) that are absolutely clear. You’ve already heard reference to them, but I’m going to note it again.

 

702(a) is clear that Title VII in its entirety does not apply to religious entities with respect to employment of people of a particular religion. And the definition of religion in Title VII is absolutely clear that it covers not only religious belief but also observance and practice or what we usually call conduct.

 

I suggest that there are two cases where the court correctly interpreted 702(a) to apply to a corporation which was not a house of worship. The first is the Ninth Circuit in 2011 in the Spencer v. World Vision case. World Vision describes itself as a Christian humanitarian organization. And that organization terminated three employees who the case says denied the deity of Jesus Christ.

 

The Ninth Circuit held that an entity is eligible for a 702(a) exemption at least where the entity—and it gave four factors—is organized for a religious purpose, is engaged primarily in carrying out that religious purpose, holds itself up to the public as an entity for carrying out that religious purpose, and does not engage primarily or substantially in the exchange of goods or services for money beyond nominal amounts. But that case was interesting in that the panel that decided it didn’t agree with each other. Judge O’Scannlain would not have required the fourth factor about not engaging substantially in the exchange of goods or services for money. And he noted that the very act of determining what activities do or do not have religious meaning runs counter to the core of the establishment clause.

 

Judge Kleinfeld agreed with the first three factors but added that fourth factor about the exchange of goods or services for money. And in her dissent Judge Berzon said that 702(a) applies only to organizations whose primary activity consists of prayer and religious learning. That is the most narrow view of 702(a) I have ever seen articulated.

 

So the second case I wanted to note was the Third Circuit’s case in Leboon v. Lancaster Jewish Community Center. This is a 2007 case where I think the court got it right. Leboon was an Evangelical Christian bookkeeper who sued a Jewish community center for religious discrimination. She believed she had been terminated either because of her speech impediment and/or her Christian faith.

 

And Leboon argued that the Jewish community center was not a religious organization because it lacked ties with a synagogue and its purposes were primarily cultural, not religious. This decision notes that it held secular lectures. It employed gentile employees, and it failed to ban non-kosher foods.

 

But applying the primarily religious standard, the Third Circuit unanimously held that the Jewish Community Center was a religious organization entitled to 702(a) protection, noting that the center identified as Jewish and its stated mission was to promote Jewish life, identity, and continuity. It relied on co-religionists for financial support. It offered instructional programs with Jewish content and began board meetings with biblical readings. And it involved rabbis from local synagogues in its management.

 

The court said that whether an organization is religious under 702(a) cannot be based on its conformity to some preconceived notion of what a religious organization should do. And it let the religious organization define itself that way. And it gave four different liberties that religious organizations may take without losing 702(a) protection.

 

Number one, religious organizations may engage in secular activities. Two, they need not adhere absolutely to the strictest tenants of their faiths. Three, they may declare their intention not to discriminate. And four, they need not enforce an across the board policy of hiring only co-religionists.

 

So those two cases I think are good examples that contrast with the Townley case about the way courts look at this. I believe that the best articulation of the meaning of 702(a) is the one I saw in a memo from the Office of the Attorney General that’s dated October 6, 2017. It defines religious institutions for purposes of 702(a) as “entities that are organized for religious purposes and that engage in activity consistent with and in furtherance of such purposes.”

 

I think that’s a pretty good definition, and it accomplishes the purposes of section 702(a). Generally, I think that employers who are not religious employers are not going to pretend that they are in order to get the protections of section 702(a). The employment situation is not like the tax situation where somebody may get a tax break if they are designated a religious employer. Instead in the Title VII context all that the religious organization designation gets you if you’re the employer is the ability to prefer those who are in accord with your religious beliefs, observances, and practices.

 

And now I’m going to hand the discussion over the Jenny Goldstein whom I worked with at the EEOC. I’m so happy she’s here today. She’s a really smart person who understands this stuff, and I’m eager to hear what she has to say. Jenny.

 

Jennifer Goldstein:  Thank you. Yeah. I just want to emphasize that the EEOC did issue a religion guidance in 2021 that does -- we had issued a guidance previously in 2008. This one does a deeper dive into some of the defenses. And a lot of the cases that Sharon mentioned and that I’ll mention are cited there.

 

And I also want to add that the guidance stresses that all these issues are often very, very fact intensive, are going to depend on the facts, on the law of the particular circuit. And it encourages the investigators who are sort of on the front lines to take a lot of care in how they assess cases where there’s a religious defense.

 

I want to pick up actually on what Sharon was talking about. I was really struck when I was going through reading some of these cases that Sharon mentioned and some others on what is a religious organization on how divided these decisions are. I think Sharon mentioned the Spencer decision where you have a teeny, tiny per curium decision and then these long two concurring opinions and the dissent.

 

The Leboon case also -- that was the Jewish Community Center case -- also had a very vigorous dissent where the dissenting judge emphasized that this community center was not owned or controlled by a formal religious organization, wasn’t run by a synagogue, produced a secular product, and the three local rabbis who were on the board were just there in an advisory capacity. So I would argue that it’s not just Judge Berzon in Spencer, but I think in that case the dissent in Leboon also took a very, very different view.

 

And in some of the more recent cases I’ve seen there was a case against the Salvation Army in the Ninth Circuit. And there the court held that -- the court of appeals held that it was a religious organization, citing actually to both concurring opinions in the Spencer case, the Kleinfeld and the O’Scannlain opinion. And then a case that seemed a little similar to me -- this was a district court case in Louisiana against something called the New Orleans Mission.

 

And the mission of that entity was to minister to the homeless. And the court said, you know, in summary judgment I can’t say -- it looked to see whether it met the majority of the nine Leboon factors and said I can’t say that it does. So it seemed a little different to me. The court’s rulings are going in different places.

 

And I’ll just add one last case. There was a 2018 case in the Second Circuit that was about the ministerial exception. It involved the department of pastoral education within a Methodist hospital -- New York Methodist Hospital. And the dissent, though -- there are two. There was a dissent about -- it was under whether it met the test to qualify for the ministerial exception, but the dissent really relied on Leboon -- the factors laid out in Leboon and Spencer. It talked about those cases.

 

So I think they’re the easy cases. Those are a church, a synagogue. Maybe an entity like Townley Engineering that produces a secular product is an easy case, maybe not. But it is striking, I think, how there’s a lot of room in the middle where judges are really, really divided.

 

The last thing I want to mention is something that was actually highlighted in the new guidance, which is for-profit status or nonprofit status. Could a for-profit entity count as a religious organization? What the guidance notes is that in Hobby Lobby which of course was evaluating RIFRA which has the word “person,” so very different statute in terms of the word used. Basically the court there said, look, unless a statute excludes for-profit entities, you can’t assume that a for-profit entity can’t count. So I think our guidance notes that. It doesn’t really -- so it sort of references that as a question maybe for future cases.

 

I would say I don’t know of any cases that have applied the exemption to a for-profit entity. And it seems as though, at least under Leboon -- I think Judge O’Scannlain in Spencer thought nonprofit status was important. I think the Supreme Court in Amos when it was evaluating the constitutionality of the provision at least four justices, I think, thought that nonprofit status was important. That question wasn’t before the Court, so I don’t know how they would’ve assessed it. So I don’t know if that will be a question in the future. But I did want to mention that was one last point on that question.

 

I want to touch a little bit on the scope of the provision. As Professor Esbeck noted certainly it does allow a co-religionist preference. So if you’re a Baptist entity, you can prefer a Baptist. And it certainly allows a religious employer to require its employees to conform to religious requirements that aren’t tied to a protected trait. Those are I think the easy cases, so if the religion prohibits smoking and you’re caught smoking, I think that’s a very, very easy case.

 

I would also say there’s a case called Curay-Cramer where it was -- I think in that particular context not too hard a case. That’s a woman who signed a pro-choice -- who worked for a Catholic -- I don’t remember exactly who the employer was -- but a pro-choice advertisement in a newspaper. And she was fired. And she brought a sex discrimination claim saying that men who publicly advocated against the Iraq war were not similarly disciplined.

 

That wasn’t tied to --as the court in that case noted it wasn’t tied to -- her advocacy wasn’t tied to a particular employer. It was just general advocacy. And for a court to weigh which was worse, if they were comparable, would get into religion. And so the court said, we can’t do that. Anyway. It allowed there the defense.

 

I think that Professor Esbeck mentioned the Starkey case. I think that’s really quite an interesting case because there the district court had said -- that was a guidance counselor at a Catholic school who was fired when the school learned that she was married to a woman. The district court held that the exemption doesn’t apply. It said it's got to be narrowly construed. Otherwise, it would swallow up the other protections of Title VII.

 

This is really just limited to co-religionists. But it then held that the ministerial exception did apply. The court of appeals agreed on the ministerial exception. And Judge Easterbrook, which we’ve been talking about a little bit, actually, I thought, expressed a tiny bit of skepticism about whether the ministerial exception would apply to a guidance counselor. And what he said was we should be dealing with a statutory question first, the principles of constitutional avoidance. Why is the court not focused on statutory question and under the statutory question she should lose? So maybe we’ll see more of the statutory analysis coming to the forefront.

 

I think in some ways the ministerial exception is of course easier because there’s -- I think we’ve noted that the Supreme Court hasn’t addressed a lot of these questions whereas with Hosanna-Tabor and Morrissey-Berru the Supreme Court really has addressed these. And a lot of the courts of appeals have.

 

So I think courts maybe feel a little more comfortable talking about the ministerial exception. And of course the scope is I would say -- I think Morrissey-Berru is a good example. Those were two cases, one a woman fired after she disclosed she had breast cancer, another allegedly fired because of her age. So once it applies, you don’t have to get into the scope of the provision for the most part. You can put an asterisk on that. I’ll be curious to see whether courts follow what Judge Easterbrook suggested, which is go with the statute first, or whether they just go with the ministerial exception first.

 

I want to mention two cases that I think are worth watching because I think as to the scope they’re quite interesting. One is still in district court. They’re actually both within the Fourth Circuit. One is still in district court. It’s called Doe, and it involves a Catholic -- the defendant is Catholic Relief Services and their decision to deny health benefits to the same sex spouse of an employee. Sharon mentioned the Kennedy case which said that the exception is not limited to hiring and firing. But she also mentioned that Kennedy talked about how religious employees are entitled to maintain communities of faith.

 

Here’s a situation where the employer employs this individual but just doesn’t want to pay health benefits. In that sense it sort of reminded me of an old case from the 1980s called EEOC v. Fremont Christian Schools where the employer paid benefits to single women, single men, married men, but its religious believe was that these benefits should be limited to head of household and that a married woman could never be a head of household. And the Ninth Circuit said that’s sex discrimination. It essentially said it doesn’t matter that it’s wrapped up with faith. That’s not permitted by Title VII.

 

Anyway, I don’t know that Doe was argued that way. The district court in Doe just sort of seemed to say the exception is narrow. It doesn’t extend beyond co-religionists. But if it is appealed, it will be interesting to watch how that’s argued.

 

And then I don’t want to get too far ahead of my -- into my time. The other interesting case that is on appeal is -- it’s in the middle of briefing in the Fourth Circuit involving a -- it’s called Billard, a substitute teacher at a Catholic school who was fired when he -- I think he announced his engagement to a man. I probably won’t get into the arguments. I think that the briefing on behalf of the school is I think pretty thorough. I think there’s some interesting -- as to whether when the religious belief is intertwined with a protected trait under Title VII, how do you deal with that?

 

One thing, I’ll add this in closing. The ADA which was enacted -- well, it was enacted in ’90. So the Civil Rights Act was in ’64. The exception was there. It was modified in ’72. When the ADA was enacted they put in a defense similar to Title VII, but then they added a separate section that said a religious organization may require its applicants and employees to conform to the religious tenants of the organization.

 

The employer in Ballard is actually using the ADA affirmatively to argue that its interpretation of Title VII is correct. But it’s interesting that if that language were in Title VII I think some of these issues would be a little easier for courts to resolve. I’ll end there.

 

Prof. Carl H. Esbeck:  Jennifer has her finger on an important issue, using again Judge Easterbrook, that courts are improperly inverting the order of decision. They’re getting to ministerial exception first and then to the 702(a) exemption later. And that’s contrary to the rule of constitutional avoidance that Jennifer mentioned.

 

Let me just say a word about the reason defense counsel was doing that -- and I’m not saying the reason’s justified, but the reason they’re doing it is if it’s a ministerial exemption case, then it’s much more going to be disposed of on a motion to dismiss or a very early motion for summary judgment because if it is a ministerial exemption case, then it’s a categorical immunity. The case is over.

 

Whereas when I was telling you about 702(a), well, it’s an affirmative defense. And the defendant has to show two things. And then if they show two things, the plaintiff comes back with pretext. So pretty soon you quite often find yourself with a genuine issue of fact and therefore in front of the jury, and defendants don’t want to be in front of the jury. So that’s why defense counsel is perhaps jumping the gun.

 

On the two part test, the first one of course is are you a religious organization. And let me just say—Sharon touched on this, but I just wanted to emphasize her point—is what’s really going on there is in defining a religious organization the court has to avoid what if it’s violating one of its own rules. And that is the religious question doctrine because church autonomy requires that civil magistrates not resolve religious disputes.

 

So if your test for who is and who is not a religious organization actually poses a religious question, you end up violating the doctrine against the court deciding religious questions. The leading case there is Thomas v. Review Board. But if you just go to the case from last term, the Carson case, the school funding case from the state of Maine, the majority said, well, the state of Maine would not fund sectarian schools, but they would fund church affiliated schools. Well, what is the difference between a sectarian school and a church affiliate? That’s a religious question.

 

So the state of Maine was posing a test which itself violated church autonomy. So the courts are struggling so hard. How do we define who is a religious employer? They’re struggling because they’re trying not to come up with a test that violates one of its other rules.

 

I think the best test I have seen was in a related area over in the National Labor Relations Board. They struggle with they have to for First Amendment reasons not order collective bargaining, even as to lay faculty, if you’re a very religious college. But how do we know a very religious college from a slightly religious college where collective bargaining would be appropriate? And the NLRB came up with a three part test which I think could be easily used over in 702(a).

 

And its first test is, well, were you organized for a religious purpose, not an exclusive religious purpose, but one of your purposes was religious? Maybe it’s also educational or it’s also social services or drug rehabilitation or whatever. And the second test is how are you holding yourself out to the public presently? And that’s easy to do. Everybody has a website.

 

So you start there and of course then you also look at their print literature and maybe their video literature. But how are you [inaudible 00:43:37] -- are you as -- one of the major reasons that you’re holding yourself out is that you’re saying you’re religious. Sometimes charities don’t say that they’re religious because they think that’s going to reduce the gifts that they receive. Well, if you’re hiding your light under a bushel so to speak, then you’re liable to not be deemed currently religious.

 

And then the third is what are you doing currently that you deem inherently religious? And there of course we come to the kind of list of things that the EEOC has. I guess they have a nine point list in their guidance. But I think there that NLRB test is more you’re asking what are you doing that’s about religion, not what are you doing that’s religious? Sharon, to you. Sharon, I’m passing it to you, but I think you’re on mute.

 

Sharon Fast Gustafson:  Not anymore I’m not. Thank you. I want to pick up with something that Jenny brought up about employment benefits. And this is an interesting question, and one of the views that I have heard people express about 702(a) is that it relates only to hiring and firing. It doesn’t relate to things that happen during the employment relationship such as harassment or employee benefits or that sort of thing.

 

I think that’s wrong under the plain language of 702(a). 702(a) doesn’t talk about hiring or firing, but rather it says that Title VII shall not apply to a religious entity with respect to the employment of individuals of a particular religion. And I believe that employment has to do with every aspect of the employment relationship. This is something that the Fourth Circuit said in the Kennedy case that I alluded to earlier. It relates to every aspect of the employment relationship. And that would include employment benefits as well.

 

And then the only other point that I wanted to respond to is to answer the question how do we deal with religious belief when it’s intertwined with protected traits. And I think that there are two parts to the answer. The first is that 702 itself tells us that Title VII doesn’t apply. So we don’t go there.

 

There is an exception, I think. If you have an employee who is saying this doesn’t have anything to do with my religious beliefs or conduct, they’re saying that it is just a pretext. They’re really only discriminating against me because I’m a woman. Here is a man who did the exact same thing I did. I’m a woman, and I was fired because of my pro-abortion advocacy. Here’s a man who did the same thing, and he wasn’t fired.

 

I think that’s the kind of case where you would be able to come in and show pretext and you could defeat the 702(a) exemption in that case. But I think ordinarily you’re not going to be able -- when the two things are intertwined unless you’ve got a clear pretext situation like that, the religious protections of the employer are going to trump. And that’s the way Congress has designed it.

 

Jennifer Goldstein:  Thank you. I’ll just make two points. On that Doe case that I mentioned about benefits as I said I don’t know what they’ll argue. I don’t know what our position would be if somebody asked EEOC, “What’s your position on this case?” I think that in some ways -- as I said, I’ll just sort of repeat a theme.

 

Congress in some ways I think has made -- I don’t think it’s as clear as it could be in the benefits context. It’s the employer can employ individuals of a particular religion to perform work connected. So if the employer’s fine with them being employed to perform work, how does benefits fall into that? I don’t know. I don’t know if that’ll be an argument or not.

 

I just add one thing about the history of these provisions. I think when Congress was debating the bill in ’63 before the ’64 act they actually thought about exempting religious entities altogether. And that wasn’t going to -- that was not acceptable to the majority. So they put in this provision and actually limited it to the exemption to employees performing religious work as opposed to nonreligious work.

 

And I think for the reasons that both Sharon and Professor Esbeck have talked about, I think that’s very hard to separate out. So in 1972 they got rid of that qualifier, so all work. If you want to hire a Baptist to perform -- to mow the lawn and to do religious work, it’s all the same.

 

And the other thing I’ll say about the definition, the definition which Professor Esbeck referenced was added in 1972. And it is broad, except it seems as though -- it talks about how religion includes all aspects of observance and practice, as well as belief. But then it adds “unless the employer demonstrates that he can’t reasonably accommodate it without undue hardship.”

 

So I think Congress there was thinking about individuals and individual claims and probably not the religious defense, although I think it certainly defines it for the statute. So I think it would be harder to say some different definition of religion should apply. But the only point I want to make is it seems as though there’s -- the statute isn’t quite as clear as it could be on some of these hard issues, which is why courts have struggled.

 

Sharon Fast Gustafson:  Jenny, I think you made a good point about the fact that the statute talks about employing people to do it -- to carry on its activities. And one could argue that does not reach employee benefits because it’s not about carrying on activities. And that makes me think that’s probably why the Hobby Lobby case was a RIFRA case and not a Title VII case.

 

Jennifer Goldstein:  Yeah. And of course I’m only speaking about Title VII and not all the other defenses that an entity might have.

 

Prof. Carl H. Esbeck:  Well, of course Hobby Lobby was not brought as employment discrimination case, although everyone knew that there were women employed at Hobby Lobby for whom the government was working very hard to get contraception benefits or in the case of Hobby Lobby, which wasn’t Catholic, contraceptives that were thought to be abortive agents because Hobby Lobby’s concern was abortion. But the lineup there was not an employment case but a benefits case. So Hobby Lobby had to go to RIFRA as their defense.

 

Jack Derwin:  Well, thank you all. We have about ten minutes remaining, and I think we’ll now turn to audience Q&A for the remainder. And I’ll remind our audience you can submit questions using the Q&A box at the bottom right. We have a number already, so we’ll jump right in. We have one.

 

To what extent can the principles being discussed in the employment context be extended to customers/clients who assert discriminatory treatment on the same or similar bases: protected classes, reprisal, failure to provide accommodation, etc.? And that one’s open ended if anybody would like to take that one.

 

Prof. Carl H. Esbeck:  Jack, could you read that once more?

 

Jack Derwin:  Sure. To what extent can the principles being discussed in the employment context be extended to customers/clients who assert discriminatory treatment on the same or similar bases?

 

Sharon Fast Gustafson:  Well, they’re not going to be bringing a claim under the employment section of Title VII, so I guess is this a public accommodations question?

 

Prof. Carl H. Esbeck:  Yeah. That’s how I understood it too. Discrimination via public accommodation.

 

Sharon Fast Gustafson:  And for that I will say I lack expertise.

 

Prof. Carl H. Esbeck:  Well, public accommodations is over in Title II, and the religious exemption there is just -- I don’t think that there is a religious exemption. So if you’re a public accommodation and being sued in Title II, you’re left with your First Amendment defenses. So again, you’ve got free speech, so it would be appropriate to again say 303 Creative, the case pending before the U.S. Supreme Court, which is a public accommodations case and the primary issue being argued as free speech, and then also free exercise targeting.

 

Jack Derwin:  All right. We have a next question here. Does having employees acknowledge receipt of an employee handbook that clearly articulates employment expectations, many of which may be based on religious tenants, support a 702(a) defense?

 

Sharon Fast Gustafson:  It would be one twig in the bundle.

 

Prof. Carl H. Esbeck:  Yeah. It’s quite common for the defendant to put into evidence the employee handbook. And quite often the employee handbook has been carefully crafted by advice of legal counsel. But sometimes there’s a separate employment contract or morals clause which is not part of the handbook but a separate contract.

 

Many of the Catholic K-12 school cases have a separate contract with a morals clause. And they have the teachers and guidance counselors and principal and superintendent and school nurses sign that morals clause annually. It’s been quite common for employers, especially religious employers, ever since first marriage and now in the Bostock case, sexually orientation/gender identity, to become protected bases. So they generated documents so that they can raise both the ministerial exception if that’s appropriate and 702(a).

 

Jack Derwin:  We have a question here about benefits specifically. How’s it helpful to employees if a religious organization can be required to pay benefits to the same sex marital partner of an employee? Wouldn’t that just motivate the RC employer not to hire said individuals in the first instance or to simply fire them rather than fight overpaying benefits to a same sex spouse?

 

 

Sharon Fast Gustafson:  I’m not sure I exactly understand the question.

 

Prof. Carl H. Esbeck:  I’m a law professor. I’m afraid I don’t know about motives of the employers when it comes to benefits.

 

Jennifer Goldstein:  Yeah. I think my only point by referencing the Doe case was obviously the employer did value this employee. They hired and retained this employee. There are always incentives, I suppose, one can talk about with enforcement of some of these laws. But I was sort of just wondering how the court if it goes up on appeal will analyze it. What the law is and what it should be aren’t always the same.

 

Sharon Fast Gustafson:  I want to make one observation about religious employers in this context. There are some religious employers who choose to hire only people who are of the same faith, who live the same way, who follow the same morals. I think they’re permitted to do that. There are other religious employers who are willing to hire people from different faiths or from no faith at all so long as those employees agree not to do anything to show that they disagree with or to undermine the beliefs of the religious organization.

 

And so I think -- and either of those is okay. So you’re going to have some religious organizations who say yes, we’re happy to hire you, even though you don’t agree with us about all these things. But you do have to understand these are our beliefs. This is how we’re going to run our organization. And if you aren’t happy with that, usually people let them know on the front end when they’re coming in, if you’re not happy with that, this is not the place where you should be. We can’t assume that every religious employer has the same strict rules or is required to have the same strict rules about how closely their employees must agree with them about things.

 

Jack Derwin:  Well, we’re coming on the end of the hour here, but I think we have time for one more question. Someone is curious about the weight given to for-profit/nonprofit status in determining the applicability of the 702 religious exclusion.

 

Prof. Carl H. Esbeck:  It’s hardly ever come up. There’s an old, old case. I think it’s something like Townley Manufacturing. It was a southern California case but in the federal system, went to the Ninth Circuit. And Townley lost. He was found to discriminate on the basis of religion against his employees.

 

And I just don’t remember what the three judge panel said. I mean, I think they were trying to be sensitive to the fact that you ought to be able to start a for-profit business and still be an intensely religious person. But at the same time you can’t use that as a platform to foist your religion upon your employees. And when you do that, that amounts to -- like make them pray with you as you begin your work day. That’s a form of religious discrimination.

 

So I would commend to you going back and reading that Townley case. It was widely covered in case notes and law journals at the time and so on. One of the federal judges was quite a serious Catholic and had a very reflective concurring opinion. And I’m sorry, I just don’t remember --

 

Jennifer Goldstein:  Actually, I happen to have it right in front of me. The cite is 859 F.2d 610. It was a 1988 decision. I think Sharon was talking about it too. It is interesting, and it references also the Supreme Court’s decision in the Amos case where some justices were concerned that if the exemption extended to for-profit activities or entities would there be an establishment clause violation. I suspect that First Amendment analysis in Supreme Court decisions has kind of changed.

 

Sharon Fast Gustafson:  I do think it’s --

 

Jennifer Goldstein:  No, I’m done.

 

Sharon Fast Gustafson:  I do think it’s important to note that the statute just is silent as to for-profit or nonprofit status. And I think it’s important, and I think the case is going to -- we are going to end up with a religious employer case where it’s a for-profit corporation and 702 is going to apply. I don’t know when it’s going to be. I don’t know what court it’s going to be in.

 

But I think about these organizations like monks who aren’t perhaps a part of a religious order. I’m not Catholic. I don’t know exactly what I’m talking about here. But sometimes they will have businesses where they make coffins or they sell honey or I don’t know what. And they’re doing it for a profit, but there are so many indicia of religious status that the fact that they’re trying to make money from the thing that they’re selling I think is not going to keep them from being protected as religious employers who can choose people -- who can prefer people of a particular religious faith. So I’m just waiting for that case. I’m interested in this topic and curious to see what will happen.

 

Jennifer Goldstein:  And I’ll just add I’m maybe a little more doubtful. I mean, the Salvation Army case, the Garcia case in the Ninth Circuit talked about how the Salvation Army is a huge --

 

Sharon Fast Gustafson:  Sells stuff.

 

Jennifer Goldstein:  I mean, it’s a big -- there’s a lot of money there. But it is nonprofit, so money doesn’t preclude you from being held as a religious organization. But I do wonder if -- I just don’t know. I’ll be curious to see how it evolves.

 

Sharon Fast Gustafson:  Okay. Maybe it’ll never happen. We’ll see.

 

Jack Derwin:  Well, we have hit the end of our time here. I can’t thank our panelists enough for joining us today for the great discussion and to thank our audience as well for joining us today and their great questions. You can check out our website fedsoc.org or follow us on all the major social media platforms @fedsoc to stay up to date. With that, we are adjourned. Thank you again.

 

 

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