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Religious Employers Get Boost in Wage Cases From Supreme Court

July 8, 2020, 11:19 PM

The U.S. Supreme Court’s ruling that broadened its test for excluding employees of religious institutions from the protections of anti-discrimination laws bolsters employer arguments that those workers aren’t covered by federal wage law, employment attorneys said.

The high court said in its 7-2 ruling Wednesday that the religious nature of workers’ duties are more important than titles or other factors when determining if the “ministerial exception” to anti-bias laws applies. The decision also signals that religious employers’ explanations of workers’ roles should get some deference.

The legal analysis for excluding religious workers is different under federal anti-bias laws and the Fair Labor Standards Act, the law governing issues like minimum wage and overtime pay. But the ministerial exception to both laws involve some of the same issues and will be informed by the decision in Our Lady of Guadalupe School v. Morrissey-Berru, lawyers said.

“The ruling will encourage religious organizations to assert the ministerial exception more frequently,” said Thomas Johnson, a partner in the labor and employment group at the management-side firm Dechert. “It gives them a reasonable basis to believe what they say about an individual’s role will be persuasive.”

Federal courts applied the ministerial exception to anti-discrimination laws for decades before it got the Supreme Court’s blessing in a 2012 decision. The justices further empowered religious employers’ authority to hire and fire workers in its Our Lady decision, which threw out discrimination claims brought by two Catholic school teachers.

Justice Samuel Alito emphasized in the court’s opinion that a religious organization’s view on the nature of a worker’s duties deserves considerable weight.

The dissent penned by Justice Sonia Sotomayor claims that the majority opinion “all but forbids courts to inquire further about whether the employee is in fact a leader of the religion.”

Wage Law’s Ministerial Exception

The U.S. Labor Department has recognized a ministerial exception to the FLSA since at least 1967. The law doesn’t cover “nuns, monks, priests, lay brothers, ministers, deacons, and other members of religious orders who serve pursuant to their religious obligations,” according to the department’s Wage and Hour Division field manual.

Although not as heavily litigated an issue as in discrimination cases, courts have applied the exception in wage disputes. For example, the Richmond, Va.-based U.S. Court of Appeals for the Fourth Circuit ruled in 2004 that a Jewish organization’s former employee, who had been responsible for guarding against violations of kosher dietary laws, wasn’t covered by the FLSA because he performed a ministerial role for that religious group.

Similar to the ministerial exception for anti-bias laws, the FLSA’s exemption follows the First Amendment’s religious freedom principles to exclude workers who perform as clergy, said Paul DeCamp, former head of the Wage and Hour Division who now represents employers at Epstein Becker Green.

The Our Lady ruling lends support to employers arguing that workers who perform religious duties aren’t covered by the FLSA, but those cases will be fact specific and there are a lot of gray areas, DeCamp said.

In the case of teachers at religious schools, for instance, whether they fall under the ministerial exception for wage laws could come down to what subjects they teach, said Jonathan Segal, a partner in the labor and employment group at the management-side firm Duane Morris.

The exception would probably apply for those who teach religion, Segal said. Those who teach science according to religious principals would be a closer call, and a calculus teacher would be even closer, he said.

Potential Limitations

But the Supreme Court’s two rulings on the ministerial exception are animated by robust First Amendment protections over a religious organization’s hiring and firing decisions, said Michael Moreland, a law professor who directs Villanova University’s Eleanor H. McCullen Center for Law, Religion and Public Policy.

Employers may have a significantly harder time convincing courts to apply the exception outside of that core issue of employee selection, Moreland said.

Douglas Laycock, a law professor at the University of Virginia who’s written extensively about religious freedom, similarly suggested the Our Lady decision’s impact on wage and hour law could be muted.

“The range of people who may be allowed to take a vow of poverty and voluntarily work for less than minimum wage or minimum labor standards may be a narrower set than the range of people the church has to be free to hire and fire,” Laycock said.

The case is Our Lady of Guadalupe v. Morrissey-Berru, U.S., No. 19-267, 7/8/20.

To contact the reporter on this story: Robert Iafolla in Washington at riafolla@bloomberglaw.com

To contact the editors responsible for this story: Andrew Harris at aharris@bloomberglaw.com; Jay-Anne B. Casuga at jcasuga@bloomberglaw.com

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