Hosanna-Tabor v. EEOC: High Court Holds that the First Amendment Grants a Religious Institution the Freedom to “Choose Those Who Will Guide It on Its Way”

[Readers:  The analysis below of the Supreme Court's "ministerial exception" decision was written by my colleague, Marilyn Clark.  For additional information regarding Marilyn, see her resume at: http://www.dorsey.com/clark_marilyn/.  If you have any questions about the article, please don't hesitate to contact Marilyn, either by email (clark.marilyn@dorsey.com), or phone (612.492.6885).

It is difficult to predict the long-term ramifications of the Supreme Court's decision, particularly since, as addressed below, the Supreme Court qualified its opinion somewhat and declined to make broad pronouncements.  Notwithstanding these facts, and despite the somewhat limited application of the opinion, we thought you might be interested in reading about the Supreme Court's analysis of the way in which the nation's employment discrimination laws interact with the Constitution.  Regards, Roy]

Introduction

On January 11, 2012, the United States Supreme Court issued what commentators have hailed as a “sweeping” decision in Hosanna-Tabor Evangelical Lutheran Church & School v. EEOC, unanimously holding that a ministerial exception shields religious groups from employment discrimination and retaliation claims under federal law. See 565 U.S.__, No. 10-533 (Jan. 11, 2012).

In reaching its decision, the Court concurred with the Courts of Appeals that the Free Exercise and Establishment Clauses preclude the application of federal discrimination laws to a religious organization’s employment decisions about its ministers. The Court subsequently concluded that this so-called ministerial exception applied to Cheryl Perich, a former elementary school teacher, who alleged that Hosanna-Tabor discharged her in violation of the Americans with Disabilities Act (“ADA”). The Court found that Perich qualified as a minister “based on all the circumstances of her employment” with Hosanna-Tabor — including the facts that her employer held her out as a minister, that her title reflected significant religious training and formal commissioning, that she had accepted a formal call to religious service, and that her job duties involved carrying out the church’s mission. Id. at 15-17.

The Court rejected the EEOC’s position that this decision would result in a “parade of horribles,” such as allowing religious organizations “unfettered discretion” to interfere with criminal proceedings (by, for example, retaliating against witnesses) or to broadly violate general employment laws. See id. at 20-21. In so doing, the Court emphasized that its holding is limited to “unemployment discrimination suit[s] brought on behalf of a minister, challenging her church’s decision to fire her.” Id.

The Court expressly left for another day the question of whether the ministerial exception bars other types of suits by employees against their religious employers. Accordingly, it remains to be seen whether the Hosanna-Tabor decision will indeed afford religious organizations sweeping protections, as some anticipate, or whether such organizations will remain liable in employee claims brought under contract, tort, wage-and-hour, and harassment theories, as well as under certain state anti-discrimination laws.

The Court additionally refused to adopt a “rigid formula” for determining when an employee qualifies as a minister for purposes of the ministerial exception. Id. at 15. Religious organizations should therefore stay tuned for subsequent decisions fleshing out the applicable test. In the interim, employers should remain cautious of relying upon this exception, especially where employment circumstances markedly differ from those in Hosanna-Tabor.

Background

Hosanna-Tabor, a member congregation of the Lutheran Church-Missouri Synod, offers a “Christ-centered education” to students in a small Redford, Michigan school. See Hosanna-Tabor, 565 U.S.__, No. 10-533, at 1 (Jan. 11, 2012). The school primarily employs “called” teachers, who the Synod regards as “having been called to their vocation by God through a congregation.” Id. A teacher may become eligible for a call by completing a “colloquy” program, which involves taking courses at a Lutheran college or university, obtaining an endorsement from the local Synod, and passing an oral examination. See id. Once called, a teacher becomes a commissioned minister, serving an open-ended term. See id. The call may be rescinded only for cause via a supermajority vote of the congregation. See id. When no called teachers are available, the school employs “lay” teachers, who the school board appoints for one-year renewable terms. See id.

Perich began her employment with Hosanna-Tabor in 1999 as a lay teacher, but she subsequently completed the colloquy program and, later the same school year, the congregation called her to become a “Minister of Religion, Commissioned.” Id. at 2. Perich accepted the call. See id. In her role, Perich taught both secular and religious subjects, led daily devotional exercises, attended weekly chapel service, and occasionally led chapel service herself. See id. at 2-3. These duties were substantially the same as those performed by lay teachers.

At the start of the 2004-05 school year, Perich — who had been diagnosed with narcolepsy over the summer — took a disability leave. See id. at 3. When she advised the school that she planned to return, the principal informed her that the school had retained a lay teacher for the remainder of the school year. See id. After discussing concerns regarding Perich’s physical ability to return, the congregation voted to offer her a “peaceful release,” under which the congregation would pay a portion of her health-care premiums in exchange for her resignation as a called teacher. See id. Perich refused this offer. See id. Although the school board had advised that it did not have a position for her, Perich returned to Hosanna-Tabor on the first day her doctor released her to do so and refused to leave until the school documented in writing that she had reported for work. See id. The principal later called Perich and told her she would likely be fired, and Perich threatened to sue. See id.

At its next meeting, the congregation voted to rescind Perich’s call, and Hosanna-Tabor terminated her employment on April 11, 2005. See id. at 4. A letter from the school board chairman stated that the grounds for her discharge included Perich’s “insubordination and disruptive behavior,” as well as “the damage she had done to her ‘working relationship’ with the school by ‘threatening to take legal action.’” Id.

Following her discharge, Perich filed a charge with the EEOC, and the agency sued Hosanna-Tabor for allegedly terminating Perich in retaliation for asserting her rights under the ADA. See id. The EEOC sought Perich’s reinstatement, as well as back pay, compensatory and punitive damages, and other monetary and injunctive relief. See id. at 5.

The United States District Court for the Eastern District of Michigan agreed with Hosanna-Tabor that the ministerial exception barred the EEOC’s suit because the claims asserted concerned the employment relationship between a church and its minister. See id. The Sixth Circuit vacated and remanded. See id. at 5-6. Although the Court of Appeals recognized the existence of a ministerial exception rooted in the First Amendment, it found that Perich did not qualify as a “minister,” pointing to the fact that her duties as a called teacher were substantially the same as the duties of a lay teacher. See id.

Court’s Decision

Writing for the Court, Justice Roberts first acknowledged that the Free Exercise and Establishment Clauses of the First Amendment preclude the application of federal employment discrimination laws to claims arising from employment relationships between religious organizations and their ministers. Id. at 13-15. Roberts noted that the Courts of Appeals have “uniformly recognized” this ministerial exception grounded in the First Amendment. In adopting this view, Roberts emphasized: “Requiring a church to accept or retain an unwanted minister, or punishing a church for failing to do so, intrudes upon more than a mere employment decision. Such action interferes with the internal governance of the church, depriving the church of control over the selection of those who will personify its beliefs.” Id. at 13.

The Court rejected the EEOC’s argument that religious organizations should not be afforded a “special rule” regarding ministers grounded in the Religion Clauses, but instead should rely upon the right to freedom of association to defend against certain discrimination claims. See id. at 14. Characterizing the EEOC’s position as “untenable,” the Court noted that “freedom of association is a right enjoyed by religious and secular groups alike.” Id. The First Amendment, the Court went on to state, “gives special solicitude to the rights of religious organizations,” and thus the Court refused to accept “the remarkable view that the Religion Clauses have nothing to say about a religious organization’s freedom to select its own ministers.” Id.

In adopting the ministerial exception, the Court distinguished its prior holding in Employment Division, Department of Human Resources of Oregon v. Smith, 494 U.S. 872 (1990). In Smith, the Court held that the Religion Clauses did not preclude the state from denying unemployment benefits to two members of the Native American Church who were fired for using peyote, even though this use was for religious purposes. Hosanna-Tabor, 565 U.S.__, No. 10-533, at 14-15. The Hosanna-Tabor Court noted that while Smith related to the government’s regulation of “outward physical acts,” Perich’s case concerned “government interference with an internal church decision that affects the faith and mission of the church itself.” Id. at 15.

After concluding that the First Amendment affords a ministerial exception, the Court went on to hold that this exception applied to Perich. The Court first stated that the exception “is not limited to the head of a religious congregation.” Id. It did not, however, offer much additional guidance regarding when an employee qualifies as a minister, refusing to adopt a “rigid formula.” Id. Rather, the Court simply stated that “it is enough for us to conclude” that Perich was a minister “given all the circumstances of her employment.” Id. at 15-16. In reaching this conclusion, the Court pointed to the fact that Hosanna-Tabor held Perich out as a minister and tasked her with performing her office in accordance with church standards. See id. at 16. The Court further noted that Perich’s title of minister reflected that she undertook significant religious training as well as a formal commissioning process, and it emphasized that Perich held herself out as a minister by accepting the congregation’s formal call. See id. Finally, the Court stated that Perich’s job duties “reflected a role in conveying the church’s message and carrying out its mission.” Id. at 17.

In reversing the Sixth Circuit, the Court noted that the lower court had committed three errors. First, the Sixth Circuit failed to afford any weight to the fact that Perich was a commissioned minister. See id. at 18. The Court noted that while a title alone is not dispositive, the fact that an employee is ordained or commissioned is relevant to her status as a minister. See id. Second, the Sixth Circuit placed undue weight on the fact that lay and called teachers performed similar duties. See id. While the Court noted the foregoing error, it “express[ed] no view” on whether Perich’s duties alone, absent the other factors described above, would suffice to render her a minister. Finally, the Court stated that the Sixth Circuit wrongfully focused on the relative amount of time Perich spent on religious as opposed to secular teaching duties. See id. at 18-19. The Court noted that the amount of time spent on various activities may be relevant, but emphasized that the issue “is not one that can be resolved by a stopwatch.” Id. at 19. Rather, this factor must be considered together with a range of other considerations, such as those the Court relied upon in determining Perich’s status. See id.

The Court ultimately emphasized that its decision in Hosanna-Tabor is narrowly tailored, addressing only the issue of whether an employment discrimination suit may be brought by or on behalf of a minister “challenging her church’s decision to fire her.” Id. at 21. The Court expressly stated, “We express no view on whether the [ministerial] exception bars other types of suits, including actions by employees alleging breach of contract or tortious conduct by their religious employers. There will be time enough to address the applicability of the exception to other circumstances if and when they arise.” Id.

Practical Implications

Hosanna-Tabor recognizes the substantial import of allowing religious institutions the freedom to choose those who minister to their faith, prohibiting undue government interference in internal employment decisions that strike at the heart of the institution’s beliefs and mission. This decision further signals that employees of such institutions may not both have and eat their proverbial cake, gaining job security through ordainment or other formal commissioning while simultaneously retaining lay protections from the church’s internal decisions about its own leaders.

While religious employers may take some comfort in the protections Hosanna-Tabor affords, they should remain cautious of over-reliance on the ministerial exception. Whether, and to what extent, this exception will apply to employment decisions beyond those involving the hiring and firing of a church’s ministers remains unclear. The Court’s narrowly tailored ruling further suggests that — even where ultimate employment decisions regarding ministers are concerned — employees may still have viable claims against their religious employers under a range of laws. Adding to these uncertainties, the Court offers slim guidance regarding how to determine who qualifies as a “minister” for purposes of the exception.

In light of the nebulous landscape in the wake of Hosanna-Tabor, religious institutions — as with other employers — are well advised to make hiring and firing decisions with due caution and care. Before implementing any such decision, the institution should take a step back and review the decision from the perspective of a skeptical third party to determine whether the action will likely survive a challenge should the employee decide to bring one. In so doing, the institution should assess the risk that the employee may claim the institution’s actions are unlawful. If the answer is “yes,” the institution should carefully evaluate whether the ministerial exception will likely apply based on the limited guidance offered in Hosanna-Tabor and any subsequent decisions fleshing out the applicable standards. By carefully evaluating all relevant facts and circumstances prior to acting (as opposed to scrambling to defend its actions after the fact), the institution is able to make a well-reasoned decision and, in turn, to greatly reduce the risks inherent in taking any adverse action against its employees.