In a 7-2 ruling Wednesday, the United States Supreme Court ruled that the “ministerial exception” barred the civil courts from resolving employment discrimination lawsuits brought by former employees against two Catholic schools. This article will review the facts of each case, summarize the Court’s ruling, and assess the relevance to religious organizations.

Case No. 1

For many years, a woman (the “Teacher”) was employed by a Catholic parochial school as a lay fifth or sixth grade teacher. She taught all subjects, including religion.

The Teacher earned a B.A. in English with a minor in secondary education, and she holds a California teaching credential. While on the school faculty, she took religious education courses at the school’s request, and was expected to attend faculty prayer services.

Each year, the Teacher entered into an employment agreement that set out the school’s “mission” and her duties. The agreement stated that the school’s mission was “to develop and promote a Catholic School Faith Community,” and it informed the Teacher that “all her duties and responsibilities as a teacher were to be performed within this overriding commitment.”

In a 7-2 ruling Wednesday, the United States Supreme Court ruled that the “ministerial exception” barred the civil courts from resolving employment discrimination lawsuits brought by former employees against two Catholic schools.

The agreement explained that the school’s hiring and retention decisions would be guided by its Catholic mission, and the agreement made clear that teachers were expected to “model and promote” Catholic “faith and morals.” Under the agreement, the Teacher was required to participate in “school liturgical activities, as requested,” and the agreement specified that she could be terminated “for cause” for failing to carry out these duties or for “conduct that brings discredit upon the School or the Roman Catholic Church.” The agreement required compliance with the faculty handbook, which sets out similar expectations.

The pastor of the parish, a Catholic priest, had to approve the Teacher’s hiring each year. Like all teachers in the Archdiocese of Los Angeles, the Teacher was “considered a catechist,” i.e., “a teacher of religion.” Catechists are “responsible for the faith formation of the students in their charge each day.”

The Teacher provided religious instruction every day using a textbook designed for use in teaching religion to young Catholic students. Under the prescribed curriculum, she was expected to teach students, among other things, “to learn and express belief that Jesus is the son of God and the Word made flesh”; to “identify the ways” the church “carries on the mission of Jesus”; to “locate, read and understand stories from the Bible”; to “know the names, meanings, signs and symbols of each of the seven sacraments”; and to be able to “explain the communion of saints.” She also directed and produced an annual passion play.

The Teacher’s class began or ended every day with prayer. She led the students in prayer at other times, such as when a family member was ill. And she taught them to recite the Apostle’s Creed and the Nicene Creed.

The school reviewed the Teacher’s performance under religious standards. The “‘Classroom Observation Report’” evaluated whether Catholic values were “infused through all subject areas” and whether there were religious signs and displays in the classroom. The Teacher testified that she tried to instruct her students “in a manner consistent with the teachings of the Church,” and she said that she was “committed to teaching children Catholic values” and providing a “faith-based education.”

In 2014, the school asked the Teacher to move from a full-time to a part-time position, and the next year, the school declined to renew her contract. She filed a claim with the Equal Employment Opportunity Commission (EEOC), received a right-to-sue letter, and then filed suit under the federal Age Discrimination in Employment Act, claiming that the school had demoted her and had failed to renew her contract so that it could replace her with a younger teacher.

The school maintains that it based its decisions on classroom performance — specifically, the Teacher’s difficulty in administering a new reading and writing program, which had been introduced by the school’s new principal as part of an effort to maintain accreditation and improve the school’s academic program.

A federal district court dismissed the lawsuit on the basis of the “ministerial exception,” which generally bars the civil courts from resolving employment discrimination disputes between churches and ministers.

A federal appeals court reversed this ruling. It acknowledged that the Teacher had “significant religious responsibilities” but noted that the Teacher did not have the formal title of “minister,” had limited formal religious training, and “did not hold herself out to the public as a religious leader or minister.”

In the appeals court’s view, these factors outweighed the fact that she was invested with significant religious responsibilities, and therefore the Teacher did not fall within the ministerial exception. The United States Supreme Court agreed to review the case.

Case No. 2

The second case concerns a woman (the “Teacher”) who worked for a year and a half as a lay teacher at a Catholic primary school in Los Angeles. For part of one academic year, the Teacher served as a substitute teacher for a first grade class, and for one full year she was a full-time fifth grade teacher. She taught all subjects, including religion. She had a B.A. in liberal studies and a teaching credential.

Her employment agreement was in pertinent part nearly identical to that of the plaintiff in the first case (above). The agreement set out the same religious mission; required teachers to serve that mission; imposed commitments regarding religious instruction, worship, and personal modeling of the faith; and explained that teachers’ performance would be reviewed on those bases. The agreement also required compliance with the school’s faculty handbook, which defined “religious development” as the school’s first goal and provides that teachers must “model the faith life,” “exemplify the teachings of Jesus Christ,” “integrate Catholic thought and principles into secular subjects,” and “prepare students to receive the sacraments.”

The Teacher instructed her students in the tenets of Catholicism. She was required to teach religion for 200 minutes each week, and administered a test on religion every week. She used a religion textbook selected by the school’s principal, a Catholic nun. The religious curriculum covered “the norms and doctrines of the Catholic Faith, including … the sacraments of the Catholic Church, social teachings according to the Catholic Church, morality, the history of Catholic saints, and Catholic prayers.”

Teachers at the school were “required to pray with their students every day,” and the Teacher observed this requirement by opening and closing each school day with prayer, including the Lord’s Prayer.

The school declined to renew the Teacher’s contract after one full year at the school. She filed charges with the EEOC, and after receiving a right-to-sue letter, sued the school, alleging that she was discharged because she had requested a leave of absence to obtain treatment for breast cancer.

The school maintains the decision was based on poor performance — namely, a failure to observe the planned curriculum and keep an orderly classroom. A federal district court dismissed the lawsuit on the basis of the “ministerial exception,” but a federal appeals court reversed this ruling. The United States Supreme Court agreed to review both cases 1 and 2.

The Supreme Court’s Decision

The Court first recognized the ministerial exception in 2012. Hosanna-Tabor Evangelical Lutheran Church and School v. EEOC, 565 U. S. 171 (2012). In Hosanna-Tabor, a fourth grade teacher at an Evangelical Lutheran school sued her employer in federal court claiming she had been discharged because of a disability in violation of the Americans with Disabilities Act of 1990. The school responded that the real reason for her dismissal was her violation of the Lutheran doctrine that disputes should be resolved internally and not by going to outside authorities. The Supreme Court ruled that her lawsuit was barred by the “ministerial exception” and noted that it “concerned government interference with an internal church decision that affects the faith and mission of the church.”

The Court declined “to adopt a rigid formula for deciding when an employee qualifies as a minister,” and concluded that the exception applied to the teacher “given all the circumstances of her employment.” The Court identified four relevant circumstances but did not highlight any as essential:

First, we noted that her church had given [the teacher] the title of “minister, with a role distinct from that of most of its members.” Although she was not a minister in the usual sense of the term — she was not a pastor or deacon, did not lead a congregation, and did not regularly conduct religious services — she was classified as a “called” teacher, as opposed to a lay teacher, and after completing certain academic requirements, was given the formal title “‘Minister of Religion, Commissioned.’”

Second [the teacher’s] position “reflected a significant degree of religious training followed by a formal process of commissioning.”

Third [the teacher] held herself out as a minister of the church by accepting the formal call to religious service, according to its terms,” and by claiming certain tax benefits.

Fourth [the teacher’s] job duties reflected a role in conveying the Church’s message and carrying out its mission. The church charged her with “leading others toward Christian maturity” and “teaching faithfully the Word of God, the Sacred Scriptures, in its truth and purity and as set forth in all the symbolical books of the Evangelical Lutheran Church.” Although she also provided instruction in secular subjects, she taught religion four days a week, led her students in prayer three times a day, took her students to a chapel service once a week, and participated in the liturgy twice a year. “As a source of religious instruction,” we explained, “she performed an important role in transmitting the Lutheran faith to the next generation.”

Back to the case before it, the Court noted that “in determining whether a particular position falls within the Hosanna-Tabor exception, a variety of factors may be important,” and “our recognition of the significance of [the four factors in Hosanna-Tabor] did not mean that they must be met — or even that that they are necessarily important — in all other cases.”

The Court observed:

What matters, at bottom, is what an employee does. And implicit in our decision in Hosanna-Tabor was a recognition that educating young people in their faith, inculcating its teachings, and training them to live their faith are responsibilities that lie at the very core of the mission of a private religious school. As we put it [the teacher in the Hosanna-Tabor case] had been entrusted with the responsibility of “transmitting the Lutheran faith to the next generation.” …

When we apply this understanding of the Religion Clauses to the cases now before us, it is apparent that both teachers qualify for the exemption we recognized in Hosanna-Tabor. There is abundant record evidence that they both performed vital religious duties. Educating and forming students in the Catholic faith lay at the core of the mission of the schools where they taught, and their employment agreements and faculty handbooks specified in no uncertain terms that they were expected to help the schools carry out this mission and that their work would be evaluated to ensure that they were fulfilling that responsibility. As elementary school teachers responsible for providing instruction in all subjects, including religion, they were the members of the school staff who were entrusted most directly with the responsibility of educating their students in the faith. And not only were they obligated to provide instruction about the Catholic faith, but they were also expected to guide their students, by word and deed, toward the goal of living their lives in accordance with the faith. They prayed with their students, attended Mass with the students, and prepared the children for their participation in other religious activities. Their positions did not have all the attributes of [the teacher in Hosanna-Tabor]. Their titles did not include the term “minister,” and they had less formal religious training, but their core responsibilities as teachers of religion were essentially the same. And both their schools expressly saw them as playing a vital part in carrying out the mission of the church, and the schools’ definition and explanation of their roles is important. In a country with the religious diversity of the United States, judges cannot be expected to have a complete understanding and appreciation of the role played by every person who performs a particular role in every religious tradition. A religious institution’s explanation of the role of such employees in the life of the religion in question is important.

The Court concluded: “When a school with a religious mission entrusts a teacher with the responsibility of educating and forming students in the faith, judicial intervention into disputes between the school and the teacher threatens the school’s independence in a way that the First Amendment does not allow.”

Application

While the Court’s primary concern was addressing the application of the ministerial exception to religious school teachers, some aspects of the Court’s ruling have a broader relevance. Consider the following:

1. The Court noted that “in determining whether a particular position falls within the Hosanna-Tabor exception, a variety of factors may be important,” and “our recognition of the significance of [the four factors in Hosanna-Tabor] did not mean that they must be met — or even that that they are necessarily important — in all other cases.”

2. What matters, the Court concluded, “is what an employee does” rather than a title. Neither of the ministers in the cases before it was an ordained minister. One’s status as an ordained, commissioned, or licensed minister is not determinative or even essential to be a “minister” subject to the ministerial exception.

This aspect of the Court’s opinion could serve as justification for liberalizing the current definition of “minister” in the context of federal tax law. There are several provisions in the federal tax code that apply to “ministers,” including most notably the housing allowance. The tax code and regulations refer to “ordained, commissioned, or licensed” ministers in describing persons who qualify as ministers for tax purposes. The Tax Court amplified upon this definition in a 1989 ruling, Knight v. Commissioner, 92 T.C. 199 (1989). This definition has been endorsed by the IRS in its audit guidelines for ministers.

Under this test the following five factors must be considered in deciding whether a person is a minister for federal tax reporting: (1) Does the individual administer the “sacraments”? (2) Does the individual conduct worship services? (3) Does the individual perform services in the “control, conduct, or maintenance of a religious organization” under the authority of a church or religious denomination? (4) Is the individual “ordained, commissioned, or licensed”? (5) Is the individual considered to be a spiritual leader by his or her religious body? Only the fourth factor is required in all cases (the individual must be ordained, commissioned, or licensed). The remaining four factors need not all be present for a person to be considered a minister for tax reporting.

By defining the term “minister” to apply only to “ordained, commissioned, or licensed ministers,” the tax code, regulations, Tax Court, and the IRS adopted a definition more restrictive than the analysis applied by the Supreme Court in its recent decision, and this may serve as a basis for liberalizing the Tax Court’s definition to include persons who perform ministerial functions but who are not formally recognized as ordained, commissioned, or licensed ministers.

3. The Supreme Court’s decision provides little if any guidance on the application of the ministerial exception in cases outside of employment discrimination claims. These include, for example, disputes between churches and church staff involving breach of contract claims, defamation, or the application of the Fair Labor Standards Act to ministers.

4. The Court made the following comments regarding church autonomy:

The First Amendment provides that “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof.” Among other things, the Religion Clauses protect the right of churches and other religious institutions to decide matters “of faith and doctrine’” without government intrusion. State interference in that sphere would obviously violate the free exercise of religion, and any attempt by government to dictate or even to influence such matters would constitute one of the central attributes of an establishment of religion. The First Amendment outlaws such intrusion. The independence of religious institutions in matters of “faith and doctrine” is closely linked to independence in what we have termed “‘matters of church government.” This does not mean that religious institutions enjoy a general immunity from secular laws, but it does protect their autonomy with respect to internal management decisions that are essential to the institution’s central mission. And a component of this autonomy is the selection of the individuals who play certain key roles.

The “ministerial exception” was based on this insight. Under this rule, courts are bound to stay out of employment disputes involving those holding certain important positions with churches and other religious institutions. The rule appears to have acquired the label “ministerial exception” because the individuals involved in pioneering cases were described as “ministers.” See McClure v. Salvation Army, 460 F. 2d 553, 558–559 (CA5 1972); Rayburn v. General Conference of Seventh-day Adventists, 772 F. 2d 1164, 1168 (CA4 1985). Not all pre-Hosanna-Tabor decisions applying the exception involved “ministers” or even members of the clergy. See, e.g., EEOC v. Southwestern Baptist Theological Seminary, 651 F. 2d 277, 283–284 (CA5 1981); EEOC v. Roman.