NAICU Washington Update

Two Supreme Court Rulings Uphold Rights of Faith-Based Institutions

July 09, 2020

The Supreme Court has issued two recent rulings that may provide important protections for religious institutions of higher education. One case addresses the ability of state governments to restrict religious schools from participating in state-aided education programs, while the second case dealt with the scope of the ministerial exception that protects religious employers from job discrimination lawsuits. 

In the first case, Espinoza v. Montana, the Supreme Court considered a Montana Supreme Court decision addressing a state program that provides tax credits to individuals who donate to organizations that award scholarships for elementary and secondary private school tuition. Although the Montana Supreme Court held that the tax credit program violated a provision of the Montana Constitution that prohibits governmental aid to religious schools, the Supreme Court reversed in a 5-4 decision. According to the Court, “Montana’s no-aid provision bars religious schools from public benefits solely because of the religious character of the schools” in violation of the First Amendment’s free exercise clause. 

In its decision, the Court distinguished the Montana tax credit program from a Washington state scholarship program that the Court upheld in its 2004 ruling in Locke v. Davey. That program prohibited recipients of the state-funded scholarships from studying theology, but students could otherwise use scholarships to attend institutions of their choice, including religious institutions. According to the Court, a significant difference between the Washington and Montana programs is that the Washington legislature chose not to fund a specific course of instruction, not deny religious institutions from participating in the program solely because of their religious status. 

Although the Court’s decision in Espinoza did not involve institutions of higher education, the Court’s reasoning could potentially be extended to apply to colleges and universities. According to the Court: “A State need not subsidize private education.  But once a State decides to do so, it cannot disqualify some private schools solely because they are religious.” As a result, state-funded higher education programs may be susceptible to legal challenge if they exclude faith-based institutions from participating. 

In the second case, Our Lady of Guadalupe School v. Morrissey-Berru, the Court examined the employment discrimination claims of two teachers who were fired by the Catholic elementary schools where they worked. Under a Supreme Court doctrine known as the ministerial exception, ministers are barred from suing religious institutions for employment discrimination. In a 7-2 ruling, the Court held that the ministerial exception extends to preclude employment discrimination claims filed by teachers who perform religious duties at such institutions, even if they are not themselves ministers. 

According to the Court: “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.” The ruling is an important victory for the autonomy of religious educational institutions. 

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