November 2, 2012

Religious Institutions Update: November 2012

Lex Est Sanctio Sancta
Holland & Knight Update
Nathan A. Adams IV

Timely Topics

Nearly everyone uses social media these days, from Facebook and LinkedIn to YouTube and Twitter. Employers have learned that social media can be a valuable recruiting device, enabling them to identify candidates with the background and experience necessary for open positions. Employers also use social media to investigate the exaggeration of credentials and qualifications, locate inappropriate speech and photographs, and look for other evidence of poor judgment. Religious institutions may especially benefit from obtaining information from social media about applicants and employees that is inconsistent with the values, doctrine and mission of their organizations.

Like most tools, however, social media also has disadvantages. For example, employers may learn on social media information about an applicant’s lawfully protected characteristics that should not be considered during the hiring process. Consequently, the employer may not defend against certain discrimination claims based on lack of knowledge. Employees may also post discriminatory, harassing or threatening comments online that confer liability on their employer. In addition, use of social media during work hours may distract employees, diminish their productivity and negatively influence morale.  

To mitigate the risks of social media and enhance its benefits, the best defense is a strong offense. Every employer should adopt a policy that addresses all aspects of social media use, including limiting use during work hours and prohibiting the posting of discriminatory, harassing or threatening comments related to the workplace. The policy should also notify employees that the organization continually monitors Internet usage on computer equipment and cell phones that it provides to employees, for policy compliance.

For screening new hires, the policy should appoint a neutral person to conduct the screen, filter out protected information and report to the decision-maker only information that lawfully can be considered in the hiring process, after the applicant receives notice of and consents to the online investigation. The federal Stored Communications Act (SCA) and local precedent should guide employers as to whether they may request an applicant's passwords to social media sites.

The SCA prohibits intentionally accessing stored electronic communications on a remote server without authorization or in excess of authorization. (See Holland & Knight’s October 2012 Religious Institutions Update.) In addition, several states (e.g., California, Illinois and Maryland) statutorily prohibit requesting passwords to social media sites. Requiring an applicant or employee to provide a private social media password in order to obtain or maintain employment may or may not be deemed voluntary in your jurisdiction or sufficient to destroy an employee's privacy interest.  

A social media policy should also address whether employees are allowed to “friend” each other, minors, counselees and others. Generally, employers such as schools, which serve vulnerable populations, may have a business justification to prohibit employees from friending the persons they serve.

The National Labor Relations Board has determined that a social media policy that also prohibits disparaging or defamatory comments about the organization, supervisors and other leaders, co-workers or even third parties (e.g., volunteers or members) violates the National Labor Relations Act. Private employers not subject to the Act should consult with counsel about adding this additional protection to their social media policy.

Social media and the laws governing it change rapidly. Employers should be sure to keep up to date on new developments. If you have not adopted a social media policy — or have one but have not had qualified counsel review it recently — you should consider doing so.

Key Cases

Fifth Circuit Abandons or Modifies its Ministerial Exception Test and Dismisses Music Director's Claims

InCannata v. Catholic Diocese of Austin, Case No. 11-51151, 2012 WL 5240836 (5th Cir. Oct. 24, 2012), the U.S. Court of Appeals for the Fifth Circuit had the first opportunity to address the ministerial exception doctrine in light of Hosanna-Tabor Evangelical Lutheran Church & Sch. v. EEOC, 132 S.Ct. 694 (2012). Doing so, the court affirmed the dismissal of a music director's claim for violation of the Age Discrimination in Employment Act and the Americans with Disabilities Act.

Before Hosanna-Tabor, the Fifth Circuit articulated a three-factor test for determining when an employee qualifies as a minister within the meaning of the doctrine. It said the court must consider whether: (1) employment decisions regarding the position at issue are made largely on religious criteria; (2) the plaintiff was qualified and authorized to perform the ceremonies of the church; and, most importantly, (3) the employee engaged in activities traditionally considered ecclesiastical or religious, including attending to the religious needs of the faithful. But the court determined that the effect of Hosanna-Tabor was either to invalidate or modify the three-part test for two reasons: (1) Hosanna-Tabor requires a totality-of-the-circumstances analysis, rather than "rigid formula" or bright-line test; and (2) courts may not weight one factor (such as the third) over another.

In Cannata, the plaintiff argued that he had no ministerial training, was not ordained, was not a worship leader, had no direct interaction with the congregation and did not sermonize or write music. The church focused on the central role of music in the celebration of Mass and other liturgical ministry, the music minister's unilateral selection of hymns, and piano playing during Mass and accompanying the choir. The court agreed that the music minister's lack of formal training in Catholic doctrine was "immaterial" and found that the doctrine "does not apply only to those who are ordained." More persuasive to the court was the "important role" the music minister played in helping to "convey the church's message and carry out its mission." The court declined to "second-guess" whom the church could "consider a lay liturgical minister under canon law."

Eligibility for USDA Loan Depends upon Proration of Inherently Religious Activities

In Care Net Pregnancy Ctr. v. United States Dep't of Agriculture, No. 11-2082, 2012 WL 4801777 (D.D.C. Oct. 10, 2012), the court granted summary judgment in part to the U.S. Department of Agriculture (USDA). It also affirmed the hearing officer's interpretation of regulations governing the USDA's Community Facilities Loan Program (Program) to require proration of USDA financing between the acquisition and renovation costs attributable to inherently religious activities. The Program makes and guarantees loans in rural areas with fewer than 20,000 people for "essential community facilities" to include "health services" and "community, social or cultural services." Applicable regulations provide that a religious organization is eligible, but may not use "USDA direct assistance to support any inherently religious activities." Furthermore, "direct USDA assistance may not exceed the cost of those portions of the acquisition, construction, or rehabilitation that are attributable to eligible activities...."

In this case, the plaintiff, a self-described "Christ centered ministry" that provides both secular and religious services, applied for a loan to help finance the purchase and renovation of a facility where it planned to offer both types of services. After the USDA declined, the plaintiff administratively appealed. The hearing officer upheld the USDA's decision on the grounds that: (1) the proposed structure could not be used for both eligible and inherently religious activities; and (2) the applicant had not satisfactorily shown that the amount of direct USDA assistance requested was limited to the cost of the proposed acquisition and renovation attributable exclusively to eligible program activities. The plaintiff then filed suit, contending that the hearing officer should have found that the USDA may fund the entire project because no additional improvements are required solely for the applicant's inherently religious activities. The court disagreed, ruling that it must grant substantial deference to the hearing officer's interpretation. The court also declined to consider the plaintiff's Religious Freedom Restoration Act, Free Exercise Clause, Credit Act or substantive Due Process Clause claims because the plaintiff did not raise them in the administrative action. But the court remanded constitutional questions raised by the plaintiff not decided below under the Free Speech and Equal Protection Clauses and Fair Housing Act. The court also remanded the USDA's Establishment Clause defense.

Administrative Assistant's Race Discrimination Claim against BGEA Rejected

In McCallum v. Billy Graham Evangelistic Ass'n, Case No. 3:09cv381-RLV, 2012 WL 4756061 (W.D. N.C. Oct. 5, 2012), the court granted summary judgment to the defendant on the plaintiff's claim of racial discrimination under Title VII and state law after the defendant eliminated her position as an administrative assistant and did not offer her alternative employment. The court once again declined to apply the ministerial exception doctrine to the plaintiff's claims, on the grounds that the plaintiff's duties were not important to the spiritual and pastoral mission of the organization. It clarified that it previously dismissed the plaintiff's retaliation claim under Title VII and state law for reporting bias against African American churches in the defendant's outreach ministry (e.g., "Dare to be a Daniel" program), because the defendant could not be required to explain its decision-making process with respect to its outreach ministry to avoid violating the First Amendment. The court found that religion played no material role in the analysis of the plaintiff's remaining disparate treatment claims. Because the plaintiff's position was eliminated and never filled, she was required to show evidence indicating that the employer did not treat race neutrally when making the decision. It ruled that she failed to do this because the defendant proved it eliminated plaintiff's position based solely upon lack of work to support two administrative assistants and the defendant's decision to retain the plaintiff's supervisor, who was more experienced. As to the plaintiff's inability to secure other employment with the defendant, the court ruled the plaintiff was unable to show that: (1) the person the defendant chose was less qualified; or (2) the plaintiff was similarly situated to the person hired.

Former Employee's Negligent Retention and Supervision Claims Barred under First Amendment

In Erdman v. Chapel Hill Presbyterian Church, 286 P. 3d 357 (Wash. 2012), the Supreme Court of Washington reversed the court of appeals and sided with the trial court when it dismissed the First Amendment claims for negligent retention and negligent supervision against the senior pastor filed by a church's former executive for stewardship and elder. The court ruled that these claims implicate a religious organization's First Amendment right to select its clergy. Consequently, it rejected the court of appeals' neutral principles of law approach. With respect to negligent retention, the Washington Supreme Court held, "Judicial inquiry into hiring, ordaining and retaining clergy would result in an endorsement of religion, by approving one model for church hiring, ordination, and retention of clergy." Adjudicating the reasonableness of a church's supervision of a cleric "'requires inquiry into religious doctrine,' which would 'create an excessive entanglement, inhibit religion, and result in endorsement of one model of supervision.'" Last, the court ruled that, as a member of a hierarchical religious organization, the church is entitled to deference with respect to its decisions on the claims. The Presbytery of Olympia's Investigative Committee concluded that the plaintiff's allegations were without merit. The plaintiff chose not to appeal the decision, but instead to file this lawsuit. The court ruled that when a hierarchical church's highest ecclesiastical tribunal reaches a decision on a question of discipline, faith or ecclesiastical rule, a civil court must accept the decision as final and binding.

RLUIPA Claim Related to Ohel Dismissed for Lack of Ripeness

In Twersky v. Town of Hempstead, Case No. 10 CV 4573(MKB), 2012 WL 4928901 (E.D.N.Y. Oct. 16, 2012), the court considered not ripe for review and granted the town summary judgment against the plaintiff's First Amendment and Religious Land Use and Institutionalized Persons Act (RLUIPA) claims arising from the town building department's refusal to process his application to finish construction of an ohel. An ohel is a "stand-alone structure customarily built over the graves of righteous scholars and leaders of the Hassidic Jewish community." The town declined to process the application without the signature of the cemetery, which conditioned its approval on the authorization of other family members who had property interests in the grave sites. The family was divided, leading the court to conclude that this action, at its core, was a family dispute. The court ruled that the plaintiff should have appealed to the zoning board.

Religious Institutions in the News

The Diocese of South Carolina announced that it has disaffiliated from the Episcopal Church.

Roughly 1,400 U.S. pastors endorsed political candidates on "Pulpit Freedom Sunday," in defiance of IRS rules applicable to tax-exempt organizations.

The U.S. Supreme Court declined to review a court of appeals ruling in Driscoll v. C.I.R. that the clergy housing exclusion is limited to a single home.

The Phoenix City Council struck an ordinance that prohibited churches and others from handing out free drinking water to the public.


To ensure compliance with Treasury Regulations (31 CFR Part 10, §10.35), we inform you that any tax advice contained in this correspondence was not intended or written by us to be used, and cannot be used by you or anyone else, for the purpose of avoiding penalties imposed by the Internal Revenue Code.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem. Moreover, the laws of each jurisdiction are different and are constantly changing. If you have specific questions regarding a particular fact situation, we urge you to consult competent legal counsel.

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