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High Court Decides Religious Exemption Cases

By Lynn S. Kopon

On July 8, 2020, the United States Supreme Court decided two cases with implications for religious organizations.

Little Sisters of the Poor Saints Peter and Paul Home v. Pennsylvania

In Little Sisters of the Poor Saints Peter and Paul Home v. Pennsylvania, No. 19-431, and Donald J. Trump, President of the United States v. Pennsylvania, 19-454, the United States Supreme Court decided that the Patient Protection and Affordable Care Act of 2010 (ACA) authorized the government Departments, (Health Resources and Services Administration (HRSA)), to exempt or accommodate employers’ religious or moral objections to providing no-cost contraceptive coverage for women. In these consolidated cases, the Court upheld two Trump Administration interim final rules (IFRs) providing that employers with sincerely held religious beliefs or moral objections to providing insurance coverage for contraceptive services through their group health coverage, are exempt from providing such coverage or payments.

Almost since the enactment of the ACA, the contraceptive mandate in the ACA has been a subject of litigation. In this Supreme Court case, Pennsylvania brought action for declaratory and injunctive relief against the President, the Secretaries of Health and Human Services (HHS), Treasury, and Labor, asserting that it was Congress’ intent, under the ACA, to provide all women with minimal essential services, which included contraceptive services. They also argued that the interim final rules did not satisfy the Administrative Procedure Act (APA), which requires notice and comment before final rules are issued. The District Court agreed and entered a nationwide preliminary injunction preventing the IFRs from taking effect. Pennsylvania v. Donald J. Trump, U.S. Department of Health and Human Services, et.al., 281 F. Supp.3d 553 (2017).  The Defendants, Donald J. Trump et. al. appealed, and in the interim, the Departments promulgated final rules. Pennsylvania, joined now by New Jersey, filed an amended complaint seeking declaratory and injunctive relief against the now final rules, based on substantive and procedural invalidity under the APA. The Little Sisters of the Poor intervened to join the suit. The District Court again granted a nationwide preliminary injunction against implementation of the final rules. Pennsylvania and New Jersey v. Donald Trump, HHS, Little Sisters of the Poor, et. al., 351 F. Supp. 3d 791 (2019). Defendants and The Little Sisters appealed again and the Third Circuit Court of Appeals affirmed the lower court. Pennsylvania and New Jersey v. President of the United States, HHS, Little Sisters of the Poor, et. al. Thereafter, the Supreme Court grant certiorari and these are the cases that were decided on July 8 and the subject of this analysis.

This decision was a victory for the Little Sisters of the Poor, who objected to being compelled to provide contraceptive coverage to their female employees, or family members included under the employer plan, as part of their employer provided medical insurance. The Court noted that “the Little Sisters hold the religious conviction ‘that deliberately avoiding reproduction through medical means is immoral.”’ Little Sisters of the Poor Saints Peter and Paul Home v. Pennsylvania, Supra, No. 19-431, Pp. _, 2020 WL 3808424, (quoting Little Sisters of the Poor Home for the Aged, Denver, Colo. v. Burwell, 794 F. 3d 1151, 1167 (CA10 2015)).

The ACA requires covered employers to offer health insurance that provides minimal essential coverage, including preventive care and screenings for women. This term was further defined through guidelines promulgated by the Departments, specifically, the Health Resources and Services Administration (HRSA), part of HHS, which determined that employer sponsored insurance must include coverage for all contraceptive methods approved by the Food and Drug Administration. Because religious groups had been expressing concerns that their religious freedoms would be compromised by the required contraceptive coverage, the Departments promulgated interim final rules (IFR) to allow an employer, that had objections based on sincerely held religious beliefs, to opt out of the requirement to provide the contraception coverage.

As mentioned, this litigation has a long history and the Court explained some of that in their ruling. Following the initial promulgation of the religious exemption IFRs, in order to avail themselves of the religious exemption, organizations were required to: (1) oppose providing coverage for contraceptive services; (2) be organized as nonprofit entities; (3) hold themselves out as religious organizations; (4) self-certify that they satisfy the first three criteria by submitting a self-certifying statement to their insurance carrier, which would then allow an employee to obtain the contraceptive coverage directly from the group insurance carrier. The Little Sisters “challenged the self-certification accommodation, claiming that completing the certification form would force them to violate their religious beliefs by ‘taking actions that directly cause others to provide contraception or appear to participate in the Departments’ delivery scheme.’” Supra, Little Sisters of the Poor Saints Peter and Paul Home, (quoting Little Sisters of the Poor Home for the Aged, Denver, Colo. v. Burwell, 794 F. 3d 1151, 1167 (CA10 2015)). This 2015 action was based on the Religious Freedom Restoration Act (RFRA), the same statute on which the 2014 Hobby Lobby case was decided. Burwell v. Hobby Lobby Stores, 573 U.S. 682, 134 S. Ct. 2751 (June 30, 2014). Hobby Lobby held that requiring employers to provide contraceptive coverage, even non-religious employers with sincerely held moral objections to certain kinds of contraceptive services, burdened the free exercise of religion in violation of the Religious Freedom Restoration Act of 1993 (RFRA), 42 USC 2000bb.

In that 2015 Little Sisters’ case, the Tenth Circuit held that the self-certification requirement did not burden the free exercise of religion and rejected the Little Sister’s RFRA claim. The Little Sisters appealed and although the Supreme Court granted certiorari in four cases involving the challenge to the certification requirement, those cases were remanded without deciding the question because the “Government had ‘confirm[ed]’ that ‘contraceptive coverage could be provided to petitioners’ employees, through petitioners’ insurance companies, without any … notice from petitioners.’” (the Little Sisters). Supra, Little Sisters of the Poor Saints Peter and Paul Home, (quoting Zubik v. Burwell, 578 U.S. __, 136 S. Ct. 1557 (2016)).

In 2017, IFRs were promulgated that formed the basis for this litigation. The first rule broadened the definition of an exempt religious employer to include those objecting to providing contraceptive coverage based on sincerely held religious beliefs (not just religious employers). “Among other things, this definition included for-profit and publicly traded entities.” Supra, Little Sisters of the Poor Saints Peter and Paul Home, Pp. __, (citing 82 Fed. Reg. 47806). The second IFR created a “moral exemption” for employers, including nonprofits and for-profits with no publicly traded components, whose owners had “sincerely held moral” objections to providing certain contraceptive coverage. Supra, Little Sisters of the Poor Saints Peter and Paul Home. As explained above, the Commonwealth of Pennsylvania filed the action challenging these IFRs, and after additional final rules were released that were largely the same, with a broader exemption and no requirement for self-certification, New Jersey joined Pennsylvania’s suit and the Little Sisters also intervened to join this suit defending the authority of the government Departments to promulgate these final rules.

The Supreme Court’s decision on July 8 is a major victory for religious organizations and other employers who have sincerely held religious beliefs against, or who morally object to the concept of contraceptive coverage for women. Because the Court’s decision held that the government had the authority under the statute to create the religious exemptions, and the method of rulemaking was procedurally sound, the Court did not consider RFRA, which the Hobby Lobby case showed “’provide[s] broad protection for religious liberty.’” Supra, Little Sisters of the Poor Saints Peter and Paul Home, (quoting Hobby Lobby, Supra, 573 U.S., at 693). Although this case was not decided on RFRA grounds, the Court noted that “Under RFRA, a law that substantially burdens the exercise of religion must serve ‘a compelling governmental interest’ and be ‘the least restrictive means of furthering that compelling governmental interest’ Secs. 2000bb-1(a)-(b).” Supra, Little Sisters of the Poor Saints Peter and Paul Home. The Court predicted that there would undoubtedly be additional decisions in this area and that RFRA will be involved in analyzing, balancing, and deciding those questions.

Our Lady of Guadalupe School v. Agnes Morrissey-Berru and St. James School v. Darryl Biel

In deciding whether the First Amendment permits courts to review employment claims involving teachers at religious schools, the Supreme Court considered two cases from the 9th Circuit, Our Lady of Guadalupe School v. Agnes Morrissey-Berru, No. 19-267, and St. James School v. Darryl Biel, No. 19-348 (hereinafter referred to together as Our Lady of Guadalupe). On July 8, 2020, the Supreme Court held that the First Amendment does not allow judicial intervention into disputes between a religious school and a teacher entrusted with educating and forming students in the faith.

“The First Amendment provides that ‘Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof.’”

Our Lady of Guadalupe, Nos. 19-267, No. 19-348. In interpreting the establishment and free exercise clauses, the Court relied on the leading case in this area, Hosanna-Tabor Evangelical Lutheran Church and School v. EEOC, 565 US 171 (2012). That case clarified the “ministerial exception,” which prohibits government interference with a religious institution’s employment decisions if the employee is considered a “minister” charged with teaching and promoting matters of faith and doctrine. If the employee is a “minister” the exception is broad and includes an exception from all federal employment laws. The question before the Court in these cases was whether the employees in question were “ministers” of the faith and therefore outside the protection of the federal employment laws.

In the first case, Our Lady of Guadalupe v. Agnes Morrissey-Berru, the employee was a Catholic grammar school fifth and sixth grade lay teacher, Agnes Morrissey-Berru. She taught religion as well as other classes required by the curriculum. She signed a contract acknowledging that the school’s mission was “to develop and promote a Catholic School Faith Community.” Supra, Our Lady of Guadalupe. The Court noted that “[l]ike all teachers in the Archdiocese of Los Angeles, Morrissey-Berru was ‘considered a catechist’ i.e., a ‘teacher of religion’” Supra, Our Lady of Guadalupe (quoting App. To Pet. For Cert. in No. 19-267, at 56a, 60a). Ms. Morrissey-Berru was terminated and she filed suit under the Age Discrimination in Employment Act (ADEA). The school was granted summary judgment by the lower court based on the “ministerial exception,” stating that because Ms. Morrissey-Berru was a “minister,” the government was prohibited from interfering with the religious school’s decision to terminate this employee. The Ninth Circuit reversed stating that Ms. Morrissey-Berru’s duties did not rise to the level of a “minister” in the Church and therefor the “ministerial exception” did not apply.

The facts in the second case, St. James School v. Darryl Biel, closely mirror the Lady of Guadalupe case with both claimants being Catholic grammar school teachers whose responsibilities included teaching religion, attending Mass, praying with the students, and displaying religious imagery in the classroom. Both had signed employment agreements acknowledging the religious nature of the school and the religious goal of the educational program. Ms. Biel’s employment claim was related to the Americans With Disabilities Act (ADA). St. James School was similarly granted summary judgement below and the Ninth Circuit reversed deciding that Ms. Biel was not a “minister” because she did not rise to the definition as explained in Hosanna-Tabor.

Under the “ministerial exception,” “courts are bound to stay out of employment disputes involving those holding certain important positions with churches and other religious institutions.” Supra, Our Lady of Guadalupe.

Justice Alito, writing for the Court, laid out the principal behind the ministerial exception: “The constitutional foundation for our holding [in Hosanna-Tabor] was the general principal of church autonomy to which we have already referred: independence in matters of faith and doctrine and in closely linked matters of internal government.” Supra, Our Lady of Guadalupe.

In deciding that a teacher in a religious school was a “minister,” the Hosanna-Tabor Court mentioned four relevant circumstances: the title of minister; extensive religious training; holding one’s self out as a minister; job duties reflecting the role of carrying out the Church’s mission. The Supreme Court in the Our Lady of Guadalupe case found that these factors did not constitute a rigid list of requirements necessary to be a minister. “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 teaching, and training them to live their faith are responsibilities that lie at the very core of the mission of a private religious school.” Supra, Our Lady of Guadalupe.

By emphasizing the importance of educating youth in the tenets of the religion, and the acknowledgement by the teacher that they were responsible for imparting the religious message to their students, the Court broadened the definition of who will be considered a “minister” and significantly opened a religious institution’s ability to assert the “ministerial exception” to allow them to make hiring and firing decisions based on their judgement regarding who is best suited for the work, without having to consider federal employment law protections. In this case, one of the teachers was not even a practicing Catholic but the Court emphasized that the Constitution forbids government interference with the internal governance of religious institutions. “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.” Supra, Our Lady of Guadalupe.