• Federal Appeals Court Finds Charitable Group Exempt from Title VII Discrimination Prohibition
  • September 2, 2010 | Authors: Mark S. Askanas; Michael A. Griffin
  • Law Firms: Jackson Lewis LLP - San Francisco Office ; Jackson Lewis LLP - Seattle Office
  • The non-profit organization World Vision is exempt from employees' Title VII claims of religious discrimination, the Court of Appeals for the Ninth Circuit has ruled. Spencer v. World Vision, Inc., No. 08-35532 (9th Cir. Aug. 23, 2010). The Court determined that World Vision, an organization not affiliated with any church, may discharge employees for religious reasons because it qualifies for the religious exemption (codified in 42 U.S.C. § 2000e-1(a)) from Title VII's prohibition against employment discrimination. Accordingly, the Court affirmed summary judgment for the employer.

    The Facts
    World Vision describes itself as "a Christian humanitarian organization dedicated to working with children, families and their communities worldwide to reach their full potential by tackling the causes of poverty and injustice." It is not affiliated with any established church. It requires new employees to submit personal statements describing their "relationship with Jesus Christ" and to acknowledge their "agreement and compliance" with World Vision's beliefs, which is that "there is one God, eternally existent in three persons: Father, son and the Holy Spirit."

    Sylvia Spencer, Vicki Hulse, and Ted Youngberg were employees of World Vision. They each provided the required personal statements and acknowledgments. They held secular jobs, such as maintaining technology, performing miscellaneous office work, and coordinating shipping.

    In 2006, after discovering that, contrary to their personal statements and acknowledgments, Spencer, Hulse, and Youngberg "denied the deity of Jesus Christ and disavowed the doctrine of the Trinity," the organization fired the three for holding religious beliefs incomparable to the organization's doctrinal beliefs.

    The former employees brought an action against World Vision for wrongful discharge in violation of Title VII, alleging religious discrimination.

    Test for Exemption
    Title VII of the Civil Rights Act bars religious discrimination in employment. However, under § 2000e-1(a), an employer is exempt from this prohibition if it is a "religious corporation, association, ... or society with respect to the employment of individuals of a particular religion to perform work connected with the carrying on by such corporation, association, ... or society of its activities."

    The trial court granted World Vision's motion for summary judgment, concluding that it was a religious entity entitled to claim the Title VII religious exemption. On appeal, the federal appellate court agreed by a 2-1 vote.

    Judges Diarmuid O'Scannlain and Andrew Kleinfeld said that in most cases, the organization seeking the exemption is clearly religious. Here, however, it is less obvious that World Vision is such a "religious corporation, association, ... or society." In that case, a court should determine whether "the 'general picture' of an institution is primarily religious or secular." They rejected any suggestion that a court should limit its inquiry to deciding whether the entity was essentially a church as contrary to Congressional intent. "If Congress had intended to restrict the exemption to '[c]hurches, and entities similar to churches' it could have said so. Because Congress did not, some religious corporations, associations, and societies that are not churches must fall within the exemption," the majority said.

    The two judges in the majority did not agree on the proper test to determine whether an entity falls under the Title VII exemption. Judge O'Scannlain said:

    a nonprofit entity qualifies for the section 2000e-1 exemption if it establishes that it 1) is organized for a self-identified religious purpose (as evidenced by Articles of Incorporation or similar foundational documents), 2) is engaged in activity consistent with, and in furtherance of, those religious purposes, and 3) holds itself out to the public as religious.

    Because of its adherence to its founding Christian tenets, activities consistent with such principles, and holding itself out to the public as a religious organization, Judge O'Scannlain determined that World Vision falls under the Title VII exemption.

    While in agreement that allowing the exemption here is proper, in a concurring opinion, Judge Kleinfeld found Judge O'Scannlain's test "too inclusive" and would have the unwanted consequence of allowing "nonprofit institutions with church affiliations to use their affiliations as a cover for religious discrimination in secular employment." He, instead, offered the following test:

    To determine whether an entity is a "religious corporation, association, or society," determine whether it is organized for a religious purpose, is engaged primarily in carrying out that religious purpose, holds itself out to the public as an entity for carrying out that religious purpose, and does not engage primarily or substantially in the exchange of goods or services for money beyond nominal amounts.

    Emphasis added.

    According to Judge Kleinfeld, the addition of the italicized language would ensure that entities cannot use religious affiliations as cover.

    Judge Marsha Berzon, dissenting, criticized the tests set out by the majority as too expansive. Congress intended the religious exemption to be applied narrowly to "those institutions with extremely close ties to religion," Judge Berzon wrote. Accordingly, Judge Berzon would hold that World Vision does not qualify for the exemption.