In a 6–3 decision, the United States Supreme Court on June 15, 2020, ruled that an employer who fires an individual for being homosexual or transgender engages in “sex” discrimination in violation of Title VII of the Civil Rights Act of 1964.
This article will review the facts of the case, summarize the Court’s decision, and assess its significance to churches and other religious organizations.
The facts
The case involved three plaintiffs.
One plaintiff worked for a Georgia county as a child welfare advocate. Under his leadership, the county won national awards for its work. After a decade with the county, he began participating in a gay recreational softball league. Not long after that, influential members of the community allegedly made disparaging comments about his sexual orientation and participation in the league. Soon, he was fired for conduct “unbecoming” a county employee.
The second plaintiff worked as a skydiving instructor in New York. After several seasons with the company, he mentioned that he was gay and, days later, was fired.
The third plaintiff worked for a funeral home. When she got the job, she presented as a male. But two years into her service with the company, she began treatment for despair and loneliness. Ultimately, clinicians diagnosed her with gender dysphoria and recommended that she begin living as a woman. In her sixth year with the company, she wrote a letter to her employer explaining that she planned to “live and work fulltime as a woman” after she returned from an upcoming vacation. The funeral home fired her before she left, telling her “this is not going to work out.”
Each plaintiff brought suit under Title VII, which prohibits employers with at least 15 employees from discriminating in any employment decision on the basis of race, color, national origin, sex, or religion. A federal appeals court dismissed the first plaintiff’s case on the ground that Title VII’s ban on “sex” discrimination did not extend to sexual orientation. But another federal appeals court ruled that the second plaintiff could pursue his discrimination claim since Title VII’s ban on sex discrimination in employment did encompass sexual orientation. And a third federal appeals court allowed the third plaintiff’s discrimination claim to proceed for the same reason. All three cases were appealed to the United States Supreme Court.
The Court’s ruling
The Supreme Court sided with the two appeals courts that interpreted Title VII’s ban on sex discrimination to include sexual orientation and gender identity. Title VII states that it is “unlawful . . . for an employer to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s race, color, religion, sex, or national origin.”
The Court concluded that an employer that fires an employee merely for being gay or transgender violates Title VII’s ban on sex discrimination.
Application to churches and religious schools
What is the relevance of the Court’s ruling to churches and other religious organizations, including schools? Consider the following points.
1. Title VII exemption for religious organizations
Title VII section 702 contains the following exemption for religious organizations:
This title shall not apply to . . . a religious corporation, association, educational institution, or society with respect to the employment of individuals of a particular religion to perform work connected with the carrying on by such corporation, association, educational institution, or society of its activities.
This provision permits religious corporations and educational institutions to discriminate on the basis of religion in the employment of any person for any position.
As originally enacted, section 702 permitted religious employers to discriminate on the basis of religion only in employment decisions pertaining to their “religious activities.” Congress amended section 702 in 1972 to enable religious organizations to discriminate on the basis of religion in all employment decisions. In the years following the 1972 amendment, a number of federal courts suggested that the amendment violated the First Amendment’s nonestablishment of religion clause. But in 1987, the United States Supreme Court resolved the controversy by ruling unanimously that section 702 did not violate the First Amendment’s nonestablishment of religion clause. Corporation of the Presiding Bishop of the Church of Jesus Christ of Latter-Day Saints v. Amos, 483 U.S. 327 (1987).
Note that religious organizations are exempt only from the ban on religious discrimination in employment. They remain subject to Title VII’s ban on employment discrimination based on race, color, national origin, or sex—except with respect to employment decisions involving clergy.
Churches that take an adverse action against an employee or applicant for employment based on religious considerations should describe their action appropriately. Refer to the religious or doctrinal principle at issue, and avoid generic labels like “sex” or other gender- or sexuality-based labels.
2. Covered employers
Title VII only applies to employers engaged in interstate commerce and having 15 or more employees. The courts have defined “commerce” very broadly, and so most churches will be deemed to be engaged in commerce. Note that most states have also enacted their own employment discrimination laws that eliminate the commerce requirement and generally apply to employers with fewer than 15 employees.
3. Ministers
In 2012, a unanimous United States Supreme Court affirmed the so-called “ministerial exception” which bars the civil courts from resolving employment discrimination disputes between churches and ministers. The Court concluded:
We agree that there is such a ministerial exception. The members of a religious group put their faith in the hands of their ministers. 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. By imposing an unwanted minister, the state infringes the Free Exercise Clause, which protects a religious group’s right to shape its own faith and mission through its appointments. According the state the power to determine which individuals will minister to the faithful also violates the Establishment Clause, which prohibits government involvement in such ecclesiastical decisions. Hosanna-Tabor Evangelical Lutheran Church and School v. E.E.O.C., 132 S.Ct. 694 (2012).
This means that all discrimination disputes involving clergy are off limits to the civil courts, not just those involving religious discrimination, including those alleging discrimination based on sexual orientation or transgender status.
4. Religious schools
Title VII contains three religious exemptions for religious schools. The first, quoted above, is section 702. In addition, Title VII, Section 703(e)(2), of the Civil Rights Act of 1964 specifies:
[I]t shall not be an unlawful employment practice for a school, college, university, or other educational institution or institution of learning to hire and employ employees of a particular religion if:
- such school, college, university, or other educational institution or institution of learning is, in whole or in substantial part, owned, supported, controlled, or managed by a particular religion or by a particular religious corporation, association, or society, or
- if the curriculum of such school, college, university, or other educational institution or institution of learning is directed toward the propagation of a particular religion.
A federal appeals court interpreted this language as follows in a case involving a discrimination lawsuit brought against Samford University by a theology professor:
Samford says that, even if its refusal to allow Plaintiff to teach at the divinity school were not covered by the religious educational institution exemption, it is entitled to an exemption as an educational institution substantially “owned, supported, controlled or managed by a particular religion or religious corporation, association, or society.” Samford argues for a flexible interpretation of Section 703 and points to Samford’s historical ties with the [Southern Baptist] Convention, the fact that the Convention is the single largest contributor to the university, and that its Board of Trustees requires it to report to the Convention on all budgetary and operational matters. Plaintiff, on the other hand, says Samford is not “owned, supported, controlled, or managed” by a religious association because (1) the Convention no longer appoints trustees and (2) only seven percent of its budget comes from the Convention. Neither side cites precedents interpreting Section 703, and we are aware of no precedent that speaks to the issue of what it means to be “owned, supported, controlled, or managed” by a religious association.
The court quoted from another federal court ruling construing section 703(e)(2), Pime v. Loyola University of Chicago, 803 F.2d 351, 357 (7th Cir.1986):
Is the combination of a Jesuit president and nine Jesuit directors out of 22 enough to constitute substantial control or management by the Jesuit order? There is no case law pertinent to this question; the statute itself does not answer it; corporate-control and state-action analogies are too remote to be illuminating; and the legislative history, though tantalizing, is inconclusive.
The court concluded that Samford is “in substantial part” “supported” by the Convention:
“Substantial” is not defined by the statute. But the word substantial ordinarily has this meaning: “Of real worth and importance; of considerable value; valuable. Belonging to substance; actually existing; real; not seeming or imaginary; not illusive; solid; true; veritable. Something worthwhile as distinguished from something without value or merely nominal. Synonymous with material.” Black’s Law Dictionary, 1428 (6th ed. 1990). Continuing support annually totaling over four million dollars (even in the abstract, no small sum), accounting for seven percent of a university’s budget, and constituting a university’s largest single source of funding is of real worth and importance. This kind of support is neither illusory nor nominal. So, the Convention’s support is substantial. We hold—as an alternative to our Section 702 holding—that Samford qualifies as an educational institution which is in “substantial part” supported by a religious association and that the exemption protects Samford in this case.
A federal appeals court concluded that Title VII’s exemption of “religious institutions” from the ban on religious discrimination in employment applied to the school. It based this conclusion on the following considerations: (1) the university was established as a “theological” institution. (2) The university’s trustees are all Baptists. (3) Nearly 7 percent ($4 million) of the university’s budget comes from the Alabama Baptist Convention (the “Convention”)—representing the university’s largest single course of funding. (4) The university submits financial reports to the Convention, and its audited financial statements are made available to all Baptist churches in Alabama. (5) All university professors who teach religious courses must subscribe to the Baptist “statement of faith,” and this requirement is clearly set forth in the faculty handbook and in faculty contracts. (6) The university’s charter states that its chief purpose is “the promotion of the Christian religion.” (7) The university is exempt from federal income taxes as a “religious educational institution.”
5. Concerns about sweeping effects of the Court’s decision
Responding to concerns the Court’s June 15, 2020, decision “will sweep beyond Title VII to other federal or state laws that prohibit sex discrimination. And, under Title VII itself, they say sex-segregated bathrooms, locker rooms, and dress codes will prove unsustainable after our decision today.” The Court responded:
But none of these other laws are before us; we have not had the benefit of adversarial testing about the meaning of their terms, and we do not prejudge any such question today. Under Title VII, too, we do not purport to address bathrooms, locker rooms, or anything else of the kind. The only question before us is whether an employer who fires someone simply for being homosexual or transgender has discharged or otherwise discriminated against that individual “because of such individual’s sex.” . . . Whether other policies and practices might or might not qualify as unlawful discrimination or find justifications under other provisions of Title VII are questions for future cases, not these.
The employers also expressed concern that the Court’s decision may require some employers to violate their religious convictions. The Court responded:
We are also deeply concerned with preserving the promise of the free exercise of religion enshrined in our Constitution; that guarantee lies at the heart of our pluralistic society. But worries about how Title VII may intersect with religious liberties are nothing new; they even predate the statute’s passage. As a result of its deliberations in adopting the law, Congress included an express statutory exception for religious organizations. This Court has also recognized that the First Amendment can bar the application of employment discrimination laws “to claims concerning the employment relationship between a religious institution and its ministers.” Hosanna-Tabor Evangelical Lutheran Church and School v. EEOC, 565 U. S. 171 (2012). And Congress has gone a step further yet in the Religious Freedom Restoration Act of 1993 (RFRA). That statute prohibits the federal government from substantially burdening a person’s exercise of religion unless it demonstrates that doing so both furthers a compelling governmental interest and represents the least restrictive means of furthering that interest. Because RFRA operates as a kind of super statute, displacing the normal operation of other federal laws, it might supersede Title VII’s commands in appropriate cases.
But how these doctrines protecting religious liberty interact with Title VII are questions for future cases too. [The defendant funeral home] did unsuccessfully pursue a RFRA-based defense in the proceedings below. In its certiorari petition, however, the company declined to seek review of that adverse decision, and no other religious liberty claim is now before us. So while other employers in other cases may raise free exercise arguments that merit careful consideration, none of the employers before us today represent in this Court that compliance with Title VII will infringe their own religious liberties in any way.
6. Justice Alito’s dissent
Justice Alito issued a dissenting opinion in which he noted, in part:
Briefs filed by a wide range of religious groups—Christian, Jewish, and Muslim—express deep concern that the position now adopted by the Court “will trigger open conflict with faith-based employment practices of numerous churches, synagogues, mosques, and other religious institutions.” They argue that “[r]eligious organizations need employees who actually live the faith,” and that compelling a religious organization to employ individuals whose conduct flouts the tenets of the organization’s faith forces the group to communicate an objectionable message.
This problem is perhaps most acute when it comes to the employment of teachers. A school’s standards for its faculty “communicate a particular way of life to its students,” and a “violation by the faculty of those precepts” may undermine the school’s “moral teaching.” Thus, if a religious school teaches that sex outside marriage and sex reassignment procedures are immoral, the message may be lost if the school employs a teacher who is in a same-sex relationship or has undergone or is undergoing sex reassignment. Yet today’s decision may lead to Title VII claims by such teachers and applicants for employment.
At least some teachers and applicants for teaching positions may be blocked from recovering on such claims by the “ministerial exception” recognized in Hosanna-Tabor Evangelical Lutheran Church and School v. EEOC, 565 U. S. 171 (2012). Two cases now pending before the Court present the question whether teachers who provide religious instruction can be considered to be “ministers.” But even if teachers with those responsibilities qualify, what about other very visible school employees who may not qualify for the ministerial exception? Provisions of Title VII provide exemptions for certain religious organizations and schools “with respect to the employment of individuals of a particular religion to perform work connected with the carrying on” of the “activities” of the organization or school, 42 U. S. C. §2000e–1(a); see also §2000e–2(e)(2), but the scope of these provisions is disputed, and as interpreted by some lower courts, they provide only narrow protection.
The November 2019 Church Law & Tax Advantage Member article previewed the cases before the United States Supreme Court and included five steps that churches and religious organizations holding traditionally orthodox views of human sexuality could take if the Court decided to expand the definition of “sex” under Title VII.
Richard R. Hammar is an attorney, CPA and author specializing in legal and tax issues for churches and clergy.
