On July 8, 2020, the United States Supreme Court decided two cases addressing employers’ religious freedoms in very different contexts: one concerning whether religious school teachers could challenge adverse employment decisions in court, and one concerning rules permitting employers to assert religious and conscientious objections to a federal mandate to include contraceptive coverage in their group health plans.

First, in Our Lady of Guadalupe School v. Morrisey-Berru, the Court held by a vote of 7-2 that the so-called “ministerial exception” foreclosed federal employment discrimination claims brought by two religious school teachers against their former employers. The Court explained that the ministerial exception is rooted in the Religion Clauses of the First Amendment and serves the purpose of protecting religious institutions’ “autonomy with respect to internal management decisions that are essential to the institution’s mission,” including “the selection of the individuals who play certain key roles.” The Court first recognized the ministerial exception in the 2012 case, Hosanna-Tabor Evangelical Lutheran Church and School v. EEOC. There, the Court held that the ministerial exception applied to a teacher at a religious school based on the teacher’s religious training, her responsibility to teach religion and participate in religious activities with her students, and the fact that she held the title of, and held herself out to be, a “minister.” In Our Lady of Guadalupe, the Court clarified that the factors that informed its decision in Hosanna-Tabor did not establish a rigid “checklist” for determining when the ministerial exception applies. Rather, application of the exception depends on all of the circumstances relevant to the “fundamental purpose” of the exception. The Court held that the exception applied to both teachers in the cases before it, Catholic elementary school teachers who were in part responsible for “educating their students in the faith” and guiding them “toward the goal of living their lives in accordance with that faith.”

Second, in another 7-2 decision the Court in Little Sisters of the Poor Saints Peter and Paul Home v. Pennsylvania upheld a regulatory exemption for employers with religious and conscientious objections to the Affordable Care Act (ACA) “contraceptive mandate.” The contraceptive mandate is itself a regulation under the ACA that requires employers to provide contraceptive coverage to their employees through their group health plans. At issue in the case were two rules jointly promulgated by the Departments of Health and Human Services, Labor, and Treasury (Departments). The first rule established a broad “religious exemption” from the contraceptive mandate for any employer that “objects . . . based on its sincerely held religious beliefs” to “establishing, maintaining, providing, offering, or arranging [for] coverage or payments for some or all contraceptive services.” The second rule added a “moral exemption” for employers with “sincerely held moral objections” to providing some or all forms of contraceptive coverage. Two states challenged the rules, arguing they lacked statutory authority and were procedurally invalid under the Administrative Procedure Act. The Court rejected these challenges, holding that the exemptions were within the Departments’ discretion to create under the ACA and were not procedurally infirm. The Court also concluded that the Departments did not err in looking to the Religious Freedom Restoration Act as a guide when crafting the religions exemption, observing that “[i]t is clear . . . that the contraceptive mandate is capable of violating RFRA.”

What does this mean for employers?

These cases involve discrete issues that may not be directly relevant to many employers. For religious employers, however, Our Lady of Guadalupe reinforces First Amendment protections with respect to personnel decisions for certain types of employees. And Little Sisters expands protections for all employers who invoke religious or moral exemptions to the ACA contraceptive mandate.

*Celine Dorsainvil, a 2020  Hogan Lovells Summer Associate, contributed to this article.

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