Fourth Circuit Reverses Lower Court Ruling on Title VII ''Religious Organization Exemption''

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Kate Hooker | Bloomberg Law Kennedy v. St. Joseph's Ministries, Inc., No. 10-1792, 2011 BL 234720 (4th Cir. Sept. 14, 2011) A district court's decision that religious harassment and retaliatory discharge claims filed by a Catholic nursing home employee were not barred by the "religious organization exemption" to Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e(a)-§ 2000e(17), was reversed by the U.S. Court of Appeals for the Fourth Circuit on September 14, 2011. Explaining that religious organizations are exempt from Title VII's reach with respect to all aspects of employment, not just hiring and firing decisions, the Court held that the employee's claims should not have survived summary judgment. Villa St. Catherine, Inc., is a tax-exempt religious organization that operates a nursing home in Emmitsburg, Maryland, in accordance with Catholic principles. The nursing home holds a weekly Catholic Mass, offers communion, and displays a crucifix in every resident's room. In addition, the nursing home's employee handbook explains that the facility is strongly rooted in the Catholic faith. Lori Kennedy worked at St. Catherine as a geriatric nursing assistant from 1994 to 2007. Kennedy is a member of the Church of the Brethren, and, in accordance with her religious beliefs, wears "modest garb that includes long dresses/skirts and a cover for her hair." At some point, one of Kennedy's superiors told her that her work attire was inappropriate for a Catholic facility and that it made residents and their families uncomfortable. Kennedy refused to change the way she dressed and was subsequently fired on May 17, 2007. Kennedy filed a lawsuit against St. Catherine in the U.S. District Court for the District of Maryland, alleging that she was subjected to religious harassment, retaliatory discharge, and discriminatory discharge on the basis of religion in violation of Title VII. St. Catherine moved for summary judgment on the ground that, as a religious organization, it was exempt from Title VII's prohibition on religious discrimination. Under Title VII, it is illegal for an employer "to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment" because of the individual's religion. 42 § U.S.C. 2000e-2(a)(1). However, this rule does not apply to "a religious corporation, association, educational institution, or society with respect to the employment of individuals of a particular religion to perform work connected with the carrying on by such religious corporation, association, educational institution, or society of its activities." 42 § 2000e-1(a) (Emphasis added.) The district court, reading the term "employment" as synonymous with "employment decisions" such as hiring and firing, held that the exemption did not apply to Kennedy's religious harassment and retaliatory claims. Thus, the district court agreed that Kennedy's discriminatory discharge claim was precluded but held that her religious harassment and retaliation claims survived summary judgment. St. Catherine filed an interlocutory appeal pursuant to 28 U.S.C. § 1292(b).

"Employment" Encompasses More Than Hiring and Firing

On appeal, Kennedy conceded that the religious organization exemption barred her discriminatory discharge claim but urged the Court to adopt the district court's narrow interpretation of the term "employment" in order to save her other claims. The Court declined to limit the meaning of "employment" to hiring and firing decisions, however, holding that the term covers "the breadth of the relationship between employer and employee." According to the Court, this conclusion was consistent with the general maxim that, "as in all statutory construction, unless otherwise defined, words will be interpreted as taking their ordinary, contemporary, common meaning." (Citation omitted.) The Court noted that the use of "employment" elsewhere in Title VII supported the idea that this broader, everyday definition of the term was intended by Congress as well. Had the legislature intended to confine the meaning to hiring and firing decisions, the Court explained, it would not have taken the additional step of banning discrimination with respect to "compensation, terms, conditions, or privileges of employment." The Court thus concluded that Kennedy's harassment and retaliation claims arose, like her discriminatory discharge claim, within the context of her employment by St. Catherine. Furthermore, all three claims are contained in the subchapter of Title VII that is covered by the religious organization exemption. According to the Court, the purpose of the exemption is to "enable religious organizations to create and maintain communities composed solely of individuals faithful to their doctrinal practices, whether or not every individual plays a direct role in the organization's religious activities." (Citation and internal quotations omitted.) Congress could easily have limited the religious organization exemption to situations involving hiring and firing, the Court pointed out, but instead it chose to define employment broadly in keeping with the goal of protecting religious organizations from government intervention. Moreover, under the district court's approach, St. Catherine would have been permitted to fire Kennedy outright but ran afoul of Title VII because it gave her the opportunity to keep her job by changing her clothes. Such "nonsensical results," the Court explained, could not have been what Congress intended. Disclaimer This document and any discussions set forth herein are for informational purposes only, and should not be construed as legal advice, which has to be addressed to particular facts and circumstances involved in any given situation. Review or use of the document and any discussions does not create an attorney-client relationship with the author or publisher. To the extent that this document may contain suggested provisions, they will require modification to suit a particular transaction, jurisdiction or situation. Please consult with an attorney with the appropriate level of experience if you have any questions. Any tax information contained in the document or discussions is not intended to be used, and cannot be used, for purposes of avoiding penalties imposed under the United States Internal Revenue Code. Any opinions expressed are those of the author. The Bureau of National Affairs, Inc. and its affiliated entities do not take responsibility for the content in this document or discussions and do not make any representation or warranty as to their completeness or accuracy. ©2014 The Bureau of National Affairs, Inc. All rights reserved. Bloomberg Law Reports ® is a registered trademark and service mark of The Bureau of National Affairs, Inc.

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