In the last installment of this series,1 we looked at the United States Supreme Court decision in the case of Bostock v. Clayton County,2 in which the Court ruled that, in addition to other forms of discrimination, the Civil Rights Act of 1964 also prevents discrimination against individuals based on sexual orientation or gender identity. This ruling may have effects on private businesses and religious organizations, as will be discussed below. However, on July 8, 2020, the Supreme Court handed down another ruling in the case of Our Lady of Guadalupe School v. Morrissey-Berru3 which exempts private religious schools from employment discrimination claims. We will first look briefly at the effect of the Bostock ruling, and then in more depth at the Our Lady of Guadalupe case. The legal ramifications of the Our Lady of Guadalupe case are particularly noteworthy for all of our covenantal schools.

The Bostock ruling could have many effects on private businesses. Just as a business could previously be sued for discriminating on the basis of race, age, religion, national origin or gender, now a business could be sued under federal law for not hiring someone who is homosexual or transgender. While the Bostock case involved employment, its interpretation of “sex” under the Civil Rights Act of 1964 would arguably extend to all aspects of federal anti-discrimination law, such as rental of housing or other services. If an employer holds religious beliefs and expressed disapproval of a homosexual or transgender lifestyle, an employee holding to that lifestyle might be able to claim constructive discharge due to a “hostile work environment.”

The impact of the ruling may be somewhat limited for some organizations in the employment context from the perspective that many states already had laws that prohibited discrimination based on sexual orientation or gender identity. However, the fact that the prohibition is now also rooted in federal law could have far-reaching impacts, especially for religious-based businesses or organizations that receive federal funding or that participate in federal programs or contracts. For instance, in order to receive federal funding or participate in federal contracts, organizations often have to certify that they do not have policies that discriminate in ways prohibited by federal law. If an organization has policies prohibiting participation in programs by homosexual or transgender individuals or fails to accommodate those individuals, they may no longer be able to certify compliance with federal anti-discrimination laws. Many institutions such as hospitals and colleges are affiliated with religious organizations, and many of those organizations have religious stances at odds with the anti-discrimination laws as interpreted by the Court in Bostock. Many of those same organizations participate in federal programs for funding, scholarships, loans, and grants. Private college dormitories are often considered “housing” for purposes of federal anti-discrimination law. Cases such as those involving discrimination claims against bakers and photographers who have refused to participate in homosexual weddings have previously been brought under state statutes, but now federal claims and prosecution could be brought by federal agencies such as the Equal Employment Opportunity Commission.

One might wonder how the Bostock decision will affect private religious schools. While some of the effects described above could still apply, the effects on employment matters may be limited by the Supreme Court ruling in the Our Lady of Guadalupe case. This case, issued shortly after the Court’s ruling in the Bostock case, exempts religious schools from claims of employment discrimination. It should be noted that this case applies not only to discrimination on the basis of sexual orientation or gender identity but also to all forms of discrimination, whether based on age, gender, medical conditions, or other factors. It is also important to note that this exemption does not necessarily apply to all employees at all religious schools, but instead applies only to employees meeting the “ministerial exception,” which will be explained in greater detail later.

In order to understand this case properly, one needs to understand the legal history behind the ruling. Based on the First Amendment Free Exercise Clause, courts in the U.S. have been very hesitant to interfere with the decisions of churches. The Supreme Court has stated “The First Amendment protects the right of religious institutions ‘to decide for themselves, free from state interference, matters of church government as well as those of faith and doctrine.’”4 Courts have, therefore, refused to interfere with actions by churches to expel members or discharge ministers, or other ecclesiastic proceedings. In matters relating to employment, the courts developed the “ministerial exception,” the concept that since ministers teach doctrine, the courts will not intervene in matters relating to their employment. In 2012, in the case of Hosanna-Tabor Evangelical Lutheran Church and School v. EEO,5 the U.S. Supreme Court unanimously applied the ministerial exception to a teacher in a religious school who taught religion and held the title of minister. We reviewed that case in an article entitled “Religion and Discrimination in Employment (3)” in the February 1, 2013 Standard Bearer. In that article, we argued that, since we expect our teachers to incorporate our religious beliefs into all aspects of the curriculum, all of our teaching positions should come under the ministerial exception, even though we do not refer to them as “ministers.”6 The Court in the Our Lady of Guadalupe case effectively took that same approach, provided the employee’s job involves certain functions.

The facts of the Our Lady of Guadalupe case involved claims by two teachers in Catholic schools who claimed discrimination. One claimed discrimination based on age, the other claimed she was dismissed based on her medical treatment for cancer. The district court in each case granted summary judgment for the schools, finding that the teachers could not maintain a claim under Hosanna- Tabor. The Ninth Circuit, however, reversed these rulings, finding that the teachers did not come under the ministerial exception because they did not have sufficient “credentials, training, [and] ministerial background.” The Ninth Circuit noted that the teachers did not have the title of “minister” and did not have formal religious training.

The Supreme Court reversed the ruling, stating that the Ninth Circuit had misconstrued the ruling in the Hosanna- Tabor case into a rigid set of criteria to be met to qualify for the ministerial exception. Justice Alito stated in the opinion he authored for the majority, “What matters, at bottom, is what an employee does.”7 The majority noted that the teachers’ contracts and handbooks required them to give religious instruction, worship with the students, and personally model the faith. The teachers’ performance was evaluated on religious bases. The majority noted the long history of various religious groups in the U.S. using schools to incorporate religious doctrine into the instruction of their children. Justice Clarence Thomas filed a separate concurring opinion in which he emphasized that the courts should defer to religious institutions’ determinations as to whether their employees performed “ministerial” functions. It is interesting to note that the case was decided by a 7-2 majority, with only Justices Sotomayor and the late Justice Ginsburg dissenting.

This ruling can give guidance for our own schools. The Lord gives us means to protect the schools He has provided, and we should avail ourselves of those means whenever possible. First, we insist that our teachers incorporate the doctrines taught in our churches into every subject in the curriculum. While we may understand this, we should still review school policy handbooks and teacher contracts to ensure that they explicitly state this. Policies should also make clear that students also learn by example, and that therefore all staff should demonstrate conformity with our doctrines and beliefs in their daily walk and conversation. Contracts can be simplified by incorporating the terms of the school’s handbook by reference, and then elaborating on the expectations and doctrinal bases more fully in the handbook.

School mission statements should be reviewed to ensure that they make clear that the mission of the school is to teach the religious doctrines held by the constituents of the school. Often the Constitution, By-laws, or policy handbooks of our schools will also refer to doctrinal statements such as the Three Forms of Unity. In reviewing such documents, school boards should also consider adding references to the “Affirmations Regarding Marriage, Sexuality, and Gender Identity” adopted by Synod 2020 and incorporating those and any future such affirmations as well. Such policy language should be broadly worded, as much as possible, to include all school employees. While the “ministerial exception” becomes more of a stretch for non-teaching staff, one can easily argue that if a school employee openly lives in a way contrary to the school’s teachings, that it is counterproductive for the instruction of students. The Court in Our Lady tacitly acknowledged this when they noted that the teachers were required to guide their students to live in accordance with their faith and the teachers themselves were to personally model that faith.

While the Our Lady of Guadalupe case provides some protection for religious schools in the employment context, the Bostock opinion does still raise some questions for religious organizations in other contexts, such as claims by non-ministerial employees or claims not involving employment. For instance, can a religious school prohibit a transgender individual from using the bathroom of the opposite biological sex? Justice Gorsuch, writing for the majority in Bostock, noted that there may be religious protections which apply, but that those simply were not raised in the Bostock case. The protections noted include the ministerial exception, the exemption under Title VII of the Civil Rights Act’s for religious employers, and the Religious Freedom Restoration Act (RFRA). After the Our Lady opinion, we know the court is willing to extend the protection of the ministerial exception, but it remains to be seen to what extent the Court will apply the protections of the Civil Rights Acts’ religious exemption or the protections of RFRA.

One outstanding question is whether the Internal Revenue Service could revoke the tax-exempt status of religious organizations that discriminate on the basis of sexual orientation or gender identity. Arguably, after the Bostock opinion, discrimination based on sexual orientation or gender identity is in the same classification as racial discrimination. In the case of Bob Jones University v. United States,8 the Court ruled that the IRS could revoke the tax-exempt status of a university that claimed a religious basis for discrimination based on race because the government had a “fundamental, overriding interest in eradicating racial discrimination in education,” which outweighed the university’s right to exercise their religious beliefs. The financial effect of loss of tax exemption on our schools would be substantial, because in addition to loss of tax exemption, contributions to the schools would no longer be tax deductible, which would effectively make contributions “cost” far more. As mentioned before, government assistance to schools could also be affected by the ruling. Schools, their constituents, and their supporters should be wary of relying on government funding or tax exempt status, as we cannot allow the doctrinal integrity of our schools to be compromised.

1 “The Supreme Court finds Sexual Orientation and Identity to be Protected Classes (1),” Standard Bearer, September 1, 2020.

2 Bostock v. Clayton County, 590 U.S _____ (2020).

3 Our Lady of Guadalupe School v. Morrissey-Berru, 591 U.S. ______ (2020)

4 Kedroff v. Saint Nicholas Cathedral of Russian Orthodox Church in North America, 344 U.S. 94, 116 (1952).

5 Hosanna-Tabor Evangelical Lutheran Church and School v. EEOC, 565 U.S. 171 (2012).

6 “Religion and Discrimination in Employment (3),” Standard Bearer, February 1, 2013.

7 Our Lady of Guadalupe, at 18.

8 Bob Jones University v. United States, 461 U.S. 574 (1983).