Religious Preferences in Employment Decisions: How Far May Religious Organizations Go?

NOTE RELIGIOUS PREFERENCES IN EMPLOYMENT DECISIONS: HOW FAR MAY RELIGIOUS ORGANIZATIONS GO? INTRODUCTION When religious organizations assert that their religious mission mandates faith-based preferences in employment decisions, the Civil Rights Act's prohibition against religious discrimination' inevitably clashes with the requirements of the first amendment's religion clauses. Title VII makes it unlawful for employers to discriminate with respect to hiring, discharge, compensation, terms, conditions, or privileges of employment, because of an individual's race, color, religion, sex, or national origin. 2 This statute has been interpreted as an attempt by Congress to "eliminate all forms of unjustified discrimination in employment."'3 In contrast, the United States Supreme Court has held that the religion clauses command "that government neither engage in nor compel religious practices, that it effect no favoritism among sects or between reli'4 gion and nonreligion, and that it work deterrence of no religious belief." To alleviate the tension between the religion clauses and Title VII, Congress enacted a special exemption from Title VII for religious organizations. 5 This exemption, set forth in section 702 of the Act, allows religious organizations to exercise religious preferences when making em6 ployment decisions. The breadth of the right to discriminate granted to religious organizations by section 702 led to claims that this provision conflicts with the religion clauses' requirement that government not show favoritism toward religion. 7 However, in Corporationof PresidingBishop v. Amos, the Supreme Court upheld the constitutionality of the section 702 exemption 1. Title VII of the Civil Rights Act of 1964, § 703, 42 U.S.C. § 2000e-2 (1988). 2. Id. § 2000e-2(a)(1). 3. 4. 5. 6. 7. Feldstein v. Christian Science Monitor, 555 F. Supp. 974, 976 (D. Mass. 1983). School Dist. v. Schempp, 374 U.S. 203, 305 (1963) (Goldberg, J., concurring). Feldstein, 555 F. Supp. at 976. 42 U.S.C. § 2000e-1 (1988) [hereinafter section 702]. See infra notes 52-65 and accompanying text. DUKE LAW JOURNAL [V/ol. 1990:587 as applied to both the religious and secular activities of religious organizations. 8 Despite the holding in Amos, ambiguities concerning the scope of the exemption remain. Uncertainties arise both because the Court left certain questions unaddressed in Amos and because of section 702's vagueness. This Note assesses the current state of section 702 and develops a framework for determining what kinds of activities and what areas of the employment relationship the exemption should cover. Part I outlines the requirements of the free exercise clause and the establishment clause of the first amendment and examines the tensions that arise between them. This Part then summarizes the history of the section 702 exemption and the types of preferences courts have allowed under its provisions. Part II examines the activities of religious organizations that are currently covered by the exemption and makes recommendations concerning the scope of the exemption. This Part first addresses the Supreme Court's decision in Amos, 9 which held that section 702 covers secular activities of religious organizations. Inquiring into whether the Amos analysis should apply to both nonprofit and for-profit secular activities, or whether the coverage of for-profits should extend only to those activities that are religious in nature, this Part takes the position that the religion clauses require that the exemption extend only to those for-profit activities that are religious in nature. Part III seeks to determine what aspects of the employment relationship the exemption covers. It begins by examining possible definitions of the term "employment" in section 702 and compares these possibilities with the Equal Employment Opportunity Commission (EEOC) definition of the term. This Part then analyzes hiring and discharge decisions to discern whether such decisions would be covered under the EEOC's interpretation of the term "employment." This Section further discusses the EEOC's position on whether the term "employment" in section 702 covers terms, conditions, and privileges of employment and also examines the ramifications of its position for the religious employer's right to discriminate with regard to compensation, insurance and like benefits, and promotions. In conjunction with this analysis, Part III also offers an alternative analysis of the different components of the employment relationship. This Part recommends looking at terms, conditions, and privileges individually to determine whether extending the exemption to cover that aspect of employment coincides with the purpose of section 702 and the requirements of the religion clauses. Using this approach, this Part concludes that promotion opportunities 8. 483 U.S. 327 (1987). For further discussion of Amos, see infra notes 66-84 and accompanying text. 9. 483 U.S. at 327. Vol. 1990:587] RELIGIOUS PREFERENCES should be included within the exemption, while opportunities for compensation and insurance and like benefits should not. I. A. THE REQUIREMENTS OF THE RELIGION CLAUSES AND THE ENACTMENT OF SECTION 702 Requirements of the Religion Clauses The first amendment to the United States Constitution seeks to protect religious freedom through two separate clauses. The establishment clause provides that "Congress shall make no law respecting an establishment of religion." 10 The free exercise clause requires that Congress enact no laws "prohibiting the free exercise" of religion. 1 These two mandates comprise the religion clauses. In Lemon v. Kurtzman, the Supreme Court formulated a test to determine whether government action satisfies the prohibition set forth in the establishment clause.12 Lemon involved a challenge to state statutes that granted aid to religious schools which complied with various restrictions.1 3 The plaintiffs alleged that by granting aid to religious schools, the statute constituted an establishment of religion by the government in violation of the first amendment. The Court announced a three-part test to analyze whether a statute violates the establishment clause. The first prong of the test requires that the statute have a "secular legislative purpose." 1 4 The Court in Amos held that this requirement does not mean that the purpose of the law must be unrelated to religion-that would require an indifference to religious groups never before read into the establishment clause.1 5 The establishment clause does not excuse the government from recognizing those situations in which it must accommodate religious practices-it does not give the government leave to violate the free exercise clause. 16 Instead, according to Amos, this requirement is designed to prevent the government "from abandoning neutrality and acting with the intent of promoting a particular point of view 17 in religious matters." 10. U.S. CONST. amend. I. 11. I (...truncated)