March 11, 2014

Religious Institutions Update: March 2014

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

Timely Topics

Under state and federal law, "whistleblowers" are a protected class and a broader category of persons than intuitively you might guess. When we imagine the quintessential whistleblower, the individual is usually someone who investigates and formally reports to authorities or testifies to unlawful conduct, leading to high-profile arrests or indictments, and then is fired for "doing the right thing." But in many states, whistleblowers are also persons who informally report to a co-worker lawful conduct, policies or practices that they mistakenly consider unlawful. Whistleblowers may even misreport conduct that never occurred and would not have been unlawful if it did. This is the difference between an objective and subjective test for a violation of law and between a requirement for due diligence or something less for whistleblower status. Under federal law, the test is typically objective, requiring a bona fide whistleblower to plead an actual violation of law after some due diligence; but under several states' laws the test may be subjective, requiring a bona fide whistleblower to allege merely a good faith belief that the conduct occurred without much of an inquiry into the facts at all.

In some states, the protected whistleblower can report mere mismanagement or even negligence in lieu of unlawful conduct. The question of what form a whistleblower's complaint must take is also at issue. Must it be written, signed or even averred to and sent to authorities charged with investigating or remediating the conduct, or is it enough that the alleged whistleblower sends an email to a colleague speculating about the lawfulness of a policy or practice? Some whistleblower statutes require the would-be whistleblower to give the employer a chance to remediate the conduct or practice at least when there is adequate time for it, but other state statutes do not require any notice to the employer at all. State laws also vary about the rigor of the reporting requirement, as well as the conditions requiring formal reporting. Must the alleged conduct, policy or practice create a specific danger or threat to public health or safety, or is even a technical violation of the law enough? The threshold for protected whistleblower reporting varies by statute.

Why does any of this matter? Before you consider adverse action against an employee, you should carefully evaluate what "reports" of "misconduct" the employee has made in comparison to the minimum requirements of whistleblowers under federal and state law. Religious institutions are rarely statutorily exempt from whistleblower protections, but they may have constitutional defenses not available to secular employers. Consult with church-state counsel before making an adverse employment decision.

Key Cases

Washington Exemption for Religious Organizations from Discrimination Law Deemed Facially Constitutional

In Ockletree v. Franciscan Health Sys., 317 P. 3d 1009 (Wash. 2014) (en banc), the Supreme Court of Washington ruled 5-4 that the statutory exemption of nonprofit religious organizations from the definition of "employer" in Washington's Law Against Discrimination (LAD) did not on its face grant a "privilege" or "immunity" to religious nonprofits at the expense of other organizations, contrary to Article I, section 11 or 12 of the Washington Constitution; however, the court ruled that the exemption did violate Article I, section 12 as applied to a former employee. After the plaintiff, an African-American man, suffered a stroke that impaired his nondominant arm, the defendant determined that he could not perform the essential functions of his job as a security guard in the emergency department with or without accommodation, refused his requested accommodation and terminated his employment. The plaintiff sued the defendant on various grounds, including employment discrimination on the basis of race and disability.

Article I, section 12 provides, "No law shall be passed granting to any citizen, class of citizens, or corporation other than municipal, privileges or immunities which upon the same terms shall not equally belong to all citizens of corporations." The court rejected the plaintiff's argument that "the right to work free from discrimination is a privilege of citizenship" and that the legislature facially grants this "privilege" on unequal terms; or that the legislature facially grants religious employers "immunity" from the antidiscrimination laws applicable to other employers and, thus, grants them a "privilege to discriminate against employees." The court did not agree that: (1) LAD is a "fundamental right" especially when applied against religious organizations that have been historically exempt; (2) any time a statute grants a right to some but not others, it amounts to a "privilege" pursuant to article I, section 12; (3) the privileges and immunities clause is violated any time the legislature treats similarly situated businesses differently; or (4) LAD authorizes religious nonprofits to discriminate against employees.

Even if the exemption in LAD implicated a "privilege or immunity," the court ruled there is a reasonable ground for the distinction between religious and nonreligious organizations for a few reasons: (1) the Washington Constitution (article I, section 11) provides greater protection for the free exercise of religion than the First Amendment; (2) exemptions avoid state interference with religious autonomy and practice consistent with the First Amendment; and (3) the legislature could reasonably conclude that religious organizations should be relieved of the burden of predicting when their religious beliefs would be regarded as sufficient justification for an employment decision. Although a majority ruled LAD facially constitutional under article I, section 12, Justice Wiggins, concurring in part and dissenting in part, ruled that it was unconstitutional as applied to the plaintiff. She wrote, "I believe the constitutionality of the exemption depends entirely on whether the employee's job responsibilities relate to the organization's religious practices." She continued, "[T]he exemption is reasonable only to the extent that it relates to employees whose job responsibilities relate to the organization's religious practices." Because the plaintiff's job responsibilities did not, she deemed the exemption invalid as applied to the plaintiff.

Article I, section 11 states in part, "No public money or property shall be appropriated for or applied to any religious worship, exercise or instruction, or the support of any religious establishment." The plaintiff claimed that LAD's definition of employer favors religious nonprofits and that such favor constitutes "support" for "religious establishment[s]." The plaintiff also claimed that the challenged exemption provides indirect financial support to religious nonprofits by relieving them from the necessary financial costs of compliance with LAD. The court disagreed with both claims, finding that prohibited "support of any religious establishment" must involve an appropriation of public money, and that indirect financial benefit is insufficient.

First Amendment Bars Per Se Libel, But Not Libel Per Se by Implication or Libel Per Quod

In Kavanagh v. Zwilling, No. 12 Civ. 7062, 2014 WL 584304 (S.D.N.Y. Feb. 14, 2014), the court ruled that a former priest's claim for per se libel against the Archdiocese of New York was barred by the First Amendment, but not his claims for libel per se by implication or libel per quod. The plaintiff sued when the Archdiocese released a press release stating, inter alia, that he had been "found guilty by a Church court of multiple counts of sexual abuse of a minor." The plaintiff disagreed, arguing that judicial determination of his claims would require the court to look no further than the trial court's decision itself to see whether the canonical court actually did identify "multiple counts of sexual abuse." In contrast, the defendants argued that the court would have to review and interpret two lengthy canonical court decisions, understand and assess the meaning of sexual abuse of a minor under canon law, determine what constitutes a "delict" under church doctrine, and, finally, resolve whether the canonical courts did in fact convict the plaintiff of multiple counts of sexual abuse of a minor as defined by canon law.

The court agreed with the defendant that it would have to become entangled in church doctrine to decide whether the church's claim was true or false for purposes of libel per se. In contrast, the court stated that the gravamen of the plaintiff's libel by implication claim is that, by stating that he was "found guilty of multiple counts of sexual abuse of a minor," the defendants falsely implied that he "was found guilty of criminal conduct." The court ruled that this did not require it to get into disputed Catholic doctrines. Similarly, the court did not think it had to become entangled in church doctrine to decide the plaintiff's libel per quod claim; however, the court decided that neither claim was plausible and dismissed them. The church's statement indicated that a church court found the plaintiff guilty; therefore, the court decided that the plaintiff could not reasonably claim that it implied a secular court convicted him of a crime. The court maintained the canonical court's decision under seal.

Self-Certification Requirement in PPACA Not a Violation of RFRA

In Univ. of Notre Dame v. Sebelius, No. 13-3853, 2014 WL 687134 (7th Cir. 2014), the court affirmed denial of the university's motion for a preliminary injunction against that part of the Patient Protection and Affordable Care Act (PPACA), requiring it to complete a self-certification form and to provide a copy to its health insurance issuer or third-party administrator to be exempt from the requirement to provide employees with health insurance – including contraceptive services. The self-certification states, "I certify that, on account of religious objections, the organization opposes providing coverage for some or all of any contraceptive services that would otherwise be required to be covered; the organization is organized and operates as a nonprofit entity; and the organization holds itself out as a religious organization." Upon completion of the self-certification, the insurer must notify the university's employees and students that it will cover and pay for contraceptives for women. The university argued that by signing the form, it caused or triggered or became the conduit for the very activity it theologically opposes; i.e., the provision of contraceptive services to employees and students, but the court argued that the law was the trigger rather than the university.

Moreover, the court ruled that the federal government may do indirectly through insurance companies what it could do directly by establishing a single-payer system, and treated as "paradoxical and virtually unprecedented ... that the beneficiaries of the religious exemption are claiming that the exemption process itself imposes a substantial burden on their religious faiths." The court rejected the university's argument that the self-certification requirement substantially burdens its religious exercise in violation of the Religious Freedom Restoration Act (RFRA). It also rejected the plaintiff's Establishment Clause challenge to the exemption on the grounds that it does not require the government to equalize the burdens that laws of general applicability impose on religious institutions. Throughout the opinion, the court insinuates that the university may not have been sincere about its views based on: (a) the last-minute nature of the litigation, (b) the fact that the university went ahead and signed the form, and (c) the views of intervenor-students suggesting that outside pressure was to blame. The single issue the court considered potentially problematic but not fully developed for a ruling is whether the mandate infringes on free speech by precluding the university from attempting to influence the choice of contraceptives the insurer would cover.

Church Allowed to Intervene in Lawsuit to Require IRS to Enforce Electioneering Restrictions against Religious Institutions

In Freedom from Religion Foundation v. Koskinen, No. 12-C-0818, 2014 WL 359559 (W.D. Wis. Feb. 3, 2014), the court ruled that Father Patrick Malone and the Holy Cross Anglican Church may intervene on the side of the defendant in a lawsuit seeking to enforce 501(c)(3) electioneering restrictions against churches and religious organizations. Although the court found that the threat to the intervenors, if the plaintiff obtains an injunction against the IRS to enforce the restrictions, is at least one step removed and uncertain ever to apply if the IRS takes no action against them, the court ruled that in litigating the lawsuit the plaintiff would advance legal arguments that if accepted would impair or impede the movants' interests. Specifically, the plaintiff intends to argue that the policy of nonenforcement of the restrictions against churches violates the Establishment Clause. The intervenors argue that the IRS's enforcement of those restrictions against churches would violate the Establishment Clause. Moreover, the court ruled that the IRS is unlikely to represent the intervenors' interest. The IRS's argument is that it does not have a policy against enforcing the restrictions against churches in the first place; it will not argue that their enforcement violates the Establishment Clause.

The court rejected the plaintiff's argument that the Tax Anti-Injunction Act forbids intervention, on the theory that intervenors may not commence an action to prevent the IRS from enforcing the tax code. The court found that their purpose was not this, but preventing the plaintiff from obtaining relief against the IRS that would be inconsistent with their argument. The court also found that the intervenors' motion, submitted well in advance of the deadline for motions for summary judgment, was timely.

Delayed Discovery Doctrine Does Not Apply to Non-Intentional Torts Alleged against Florida Church and Religious School

In Doe v. St. John's Episcopal Parish Day Sch., No. 8:13-cv-2467-T-27EAJ, 2014 WL 585767 (M.D. Fla. Feb. 12, 2014), the court granted in part the defendants' motion to dismiss a former congregant and student's claim against the diocese, church, school operated by the church, and the church's priest and its choirmaster, alleging that nearly four decades earlier he was sexually and physically abused by a priest and choirmaster. The court ruled that under Florida law in a diversity case, the delayed discovery doctrine, which delays commencement of the statutes of limitations, did not apply to claims for negligent supervision and retention, negligence and breach of fiduciary duty, but did apply to claims for respondeat superior liability premised upon intentional torts, also subject to the delayed discovery doctrine. The plaintiff alleged that his memory of the abuse was extinguished because of the trauma and the resulting traumatic amnesia or repressed memory syndrome, but recently resurfaced. The defendants argued that even if the delayed discovery doctrine applies to the respondeat superior claim, the acts of the priest and choirmaster were not within the course and scope of their employment. The court recognized an exception to this general rule, where "the tortfeasor was assisted in accomplishing the tort by virtue of the employer/employee relationship." The court found that the question of whether the acts were within the scope of employment together with the capacity of the then-unincorporated school to be sued should be addressed at the summary judgment stage. The court allowed the plaintiff to proceed anonymously.

Michigan Church Fails to State Claim against Zoning Ordinance

In Alger Bible Baptist Church v. Township of Moffatt, No. 13-13637, 2014 WL 462354 (E.D. Mich. Feb. 5, 2014), the court granted the defendant's motion to dismiss and denied the plaintiff's motion for injunctive relief, challenging the township's zoning ordinance under the Religious Land Use and Institutionalized Persons Act (RUIPA), the First and Fourteenth Amendments, and the Michigan Constitution. Churches are not included as a primary use for any of the six zoning districts in the township, and only as a permissible and conditional use requiring a special use permit in four districts. The plaintiff entered into a land contract before realizing it was not in a district where churches were permitted; the church sought to rezone the property, but filed suit after being denied. Finding the township's zoning ordinance a "neutral law of general applicability" that excludes not only churches but also certain secular uses from the district with the object of promoting commercial growth, the court ruled the ordinance did not violate the Free Exercise Clause. Without evidence of similarly situated secular institutions having been permitted in the district or that the ordinance prevents the church from speaking on matters of religion, the court also rejected the church's equal protection, free speech and "RLUIPA equal terms" claims. The court also dismissed the church's "RLUIPA discrimination" claim for lack of evidence that its rezoning request was denied because of its religious beliefs, and the church's "RLUIPA exclusion" claim for lack of evidence that the rezoning ordinance unreasonably limits its ability to practice its faith in other zoning districts.

Religious Institutions in the News

The Assemblies of God and the United Pentecostal Council of the Assemblies of God have agreed to a new partnership to bridge a claimed century old racial divide.

The American Association for the Advancement of Science has inaugurated a dialogue on science, ethics and religion as part of its Center of Science, Policy and Society Programs.

The U.S. Commission on International Religious Freedom met with the European Parliament's working group on freedom of religion to explore opportunities for trans-Atlantic cooperation. 

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