Religious Institutions Update - April 2014

by Holland & Knight LLP

Timely Topics

Does a closely held for-profit corporation have a constitutionally or statutorily protected right to exercise religion under the Free Exercise Clause or the Religious Freedom Restoration Act of 1993 (RFRA)? The U.S. Supreme Court considered this question for the first time last month in oral argument in two cases: Sebelius v. Hobby Lobby Stores, Inc. and Conestoga Wood Specialties Corp. v. Sebelius. The federal government argued that the companies do not have any such rights, on the theory that engaging in for-profit activity is essentially inconsistent with the exercise of religion. RFRA itself states that it is to "be construed in favor of a broad protection of religious exercise to the maximum extent permitted by the terms of this chapter and the Constitution." But the government argued that it would be an unwarranted expansion of RFRA to allow for-profit corporations to make claims for religious exemptions to neutral laws of general application. According to the government, the price of for-profit commercial activity is secularism.

The owners of Hobby Lobby Stores, Inc. and Conestoga Wood Specialties Corporation seek to operate their businesses in keeping with their sincerely held religious beliefs, including their opposition to select contraceptives they consider to be abortifacients. As a result, the two cases also concern whether, if the companies have free exercise rights, those rights are substantially burdened by the contraception mandate contained in the Patient Protection and Affordable Care Act; if so, the third issue is whether the government has a compelling interest pursued in the least restrictive manner justifying it. Whatever your perspective on this issue, Justice Alito observed that the particular law allegedly infringing a for-profit company's religious exercise could as easily prohibit or require other activities implicating religious beliefs, such as kosher or halal slaughter methods recently outlawed as inhumane in Denmark.

Other companies that seek to operate their businesses in keeping with religious principles, and even non-profit entities such as healthcare providers sometimes criticized for allegedly operating like for-profit entities, will want to follow closely the outcome of these cases and potentially speak with church-state counsel about how best to exercise their religion consistent with the law.

Disaffiliating Church Loses Church Buildings, But Not Trust Property

In New Hope Lutheran Ministry v. Faith Lutheran Church of Great Falls, No. DA 13-0127, 2014 WL 949393 (Mont. Mar. 12, 2014), the court, applying neutral principles of law, ruled that the rightful owner of church buildings of a congregation that chose to disaffiliate from the Evangelical Lutheran Church of America (ELCA) was the newly incorporated minority in the congregation that remained loyal to the ELCA. The church constitution required a vote by 90 percent of the congregation to transfer the property. The court found no evidence that this threshold was reached, but it reversed the lower court's decision, finding that the newly incorporated minority was also entitled to the church foundation's property by virtue of an express trust created to benefit the congregation. The court concluded that the foundation, which had as its purpose "the advancement and support of activities of Faith Lutheran Church, Great Falls, Montana" predated the church's affiliation with the ECLA. It also concluded that the foundation's organizing documents made no reference to the ECLA, and that the foundation's purpose could still be carried out.

The court rejected the disaffiliating church's arguments that: (1) the newly incorporated minority lacked standing to sue on its own behalf to vindicate rights originating under the disaffiliating church's constitution; (2) the court lacked subject matter jurisdiction over what the church described as an intra-membership ecclesiastical dispute; and (3) the constitution containing the 90 percent clause was improperly enacted. The court found that it could decide an issue where a church's governing documents were disputed as readily as a dispute arising from unambiguous governing documents as long as the resolution does not require inquiry into doctrinal matters. The court also awarded prejudgment and post-judgment interest to the newly formed corporation, but upheld the denial of attorneys' fees to the new entity.

Plaintiff Fails to State Religious Discrimination Claim against New York City

In Brodt v. City of N.Y., No. 13 Civ. 3272 (PKC), 2014 WL 896740 (S.D.N.Y. Mar. 6, 2014), the court granted the defendant's motion to dismiss the plaintiff's religious discrimination and retaliation claims under Title VII, section 1983, and the New York State Human Rights Law. In addition, the court declined to exercise supplemental jurisdiction over the plaintiff's claim based on New York City Human Rights Law. The plaintiff alleged that his supervisor mocked him for having nine children, and that when he went to daily prayer service, the supervisor asked him to pray for him, too. He also asserted that the supervisor constantly touched the plaintiff's yarmulke. The court ruled that the allegations did not show discriminatory animus or a hostile work environment, as opposed to "annoying" conduct or "simple teasing, offhand comments, or isolated incidents of offensive conduct." Furthermore, the court ruled there was no failure to promote claim because plaintiff failed to allege that he was treated differently than similarly situated employees or that his supervisor responsible for the allegedly discriminatory conduct had direct hiring authority. Last, the court ruled that the plaintiff failed to allege any nexus between protected activity and adverse employment action to support a claim for retaliation.

Complaint Opposing Chiming Church Bells Dismissed

In Devaney v. Kilmartin, No. 13-510L, 2014 WL 877764 (D.R.I. Mar. 5, 2014), the court ruled that the plaintiff failed to state a claim against the defendants for the chiming of church bells located across the street from his home, which the plaintiff claims have interrupted his sleep, forced him to stay indoors, required the wearing of earplugs and precipitated an irretrievable breakdown of his marriage. The court denied his request for an injunction in light of his allegation that the bell ringing began more than a decade earlier, but allowed him the chance to amend his complaint to try to state a federal claim.

Teachers State ADEA Claim against Religious School

In Hough v. Roman Catholic Diocese of Erie, No. 12-253, 2014 WL 834473 (W.D. Pa. Mar. 4, 2014), the court denied the defendants' motion to dismiss three teachers' complaint for violation of the Age Discrimination in Employment Act (ADEA) against a diocese when they were not rehired after the diocese closed the parochial school where they had taught for more than 30 years. The plaintiffs allege that, although the diocese invited them to apply and interview for positions in a newly consolidated parochial school system, none received jobs, although the defendants allegedly hired less qualified and younger persons. The defendants argued, on the basis of Hosanna-Tabor Evangelical Lutheran Church & Sch. v. EEOC, 132 S.Ct. 694 (2012), that the ministerial exception doctrine precluded the lawsuit. But the court found that additional discovery was necessary to evaluate defendants' argument that the teachers are ministers. The court decided that it is not enough for the defendants to claim that the plaintiffs are ministers; rather, the court must examine the plaintiffs' job duties and functions to verify it. The court stated that it would be willing to revisit the application of the ministerial exception on a more developed record.

Pastors' Claims against Former Church Dismissed

In Reese v. General Assembly of Faith Cumberland Presbyterian Church in Am., No. 05-12-01303-CV, 2014 WL 1008020 (Tex.App.-Dallas Mar. 14, 2014), the court ruled that it lacked subject matter jurisdiction under the ministerial exception doctrine as articulated in Hosanna-Tabor over a pastor's claims for breach of contract and emotional distress against his former church. The court ruled that if it "were to second guess the Church's decision to terminate [the plaintiff] it would deprive the church of its right 'to shape its own faith and mission' by 'imposing an unwanted minister'" and that any "monetary award by the court would 'operate as a penalty on the church for terminating an unwanted minister.'"

In Ginyard v. Church of God in Christ Ky. First Jurisdiction, Inc., No. 3:13-CV-931-H, 2014 WL 1089625 (W.D. Ky. Mar. 14, 2014), the court ruled a pastor's claims for violation of due process, negligence, emotional distress and unjust termination against his former church were barred by the ecclesiastical abstention doctrine. The plaintiff argued that the defendants acted impermissibly in terminating his employment and disregarding an internal appellate decision to conduct a new trial on his behalf. But the court ruled that not even the church's alleged failure to follow its own procedures opened the door for civil court review.

Diocese Not Responsible for Conduct on Property Not in Its Possession or Control

In Doe v. Catholic Diocese of Kansas City-St. Joseph, No. WD 76155, 2014 WL 928996 (Mo.App. W.D. Mar. 11, 2014), the court upheld the lower court's ruling that the plaintiff failed to state a claim for intentional failure to supervise clergy stemming from allegations of clergy abuse of a minor at the residence of a clergy member's mother. The trial court dismissed the claim against the diocese on the grounds that the alleged misconduct occurred on premises not in the possession or control of the diocese, or in a place where clergy members were only privileged to enter based upon their status as servants of the diocese. The plaintiff alleged that the diocese should have liability because: (1) he was only present at the home of the priest's mother because he and his family trusted the priest, and (2) the priest's actions in befriending him and obtaining his trust on diocese property were inseparable from the incident at the home. The court rejected both arguments based on prior precedent. The plaintiff also disagreed with the lower court interpretation of Gibson v. Brewer, 952 S.W. 2d 239, 248 (Mo. Banc 1997), and argued that the case was wrongly decided, but the court of appeal disagreed and stated that a claim that a higher court's ruling is erroneous is not cognizable.

Religious Institutions in the News

A study reveals that "nones" include many more unbranded believers than atheists, and an increasingly diverse racial and ethnic mix.

In Falls Church v. Protestant Episcopal Church in the United States, No. 13-449, 2014 WL 901850 (Mar. 10, 2014), the U.S. Supreme Court let stand a lower court ruling that awarded the property of one of the oldest Episcopal churches to the denomination.

A study suggests an inverse relationship between the religiosity of a state's population and its productive entrepreneurship.

The EEOC issued new guidance for employers relating to religious discrimination.;

Arizona Governor Jan Brewer vetoed a bill that would have expanded the definition of "exercise of religion" by including the practice and observance of religion and expanding the definition of "person" to include, inter alia, business entities.;;

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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