Qualifying for the Title VII religious organization exemption: federal circuits split over proper test.

• Author: Dyer, Roger W., Jr.
• Position: Case note

Spencer v. World Vision, Inc., No. 08-35532, 2011 WL 208356 (9th Cir. Jan. 25, 2011) (per curiam).

1. INTRODUCTION

   While the United States Supreme Court has upheld the constitutionality of a law permitting religious organizations to exercise a religious preference when making employment decisions, (1) courts remain at odds over the proper test for determining whether an organization is "religious." This conflict highlights the tension between Title VII of the Civil Rights Act and the First Amendment's religion clauses. (2) When Congress passed Title VII, it took the first step toward its goal of "eliminating] all forms of unjustified discrimination in employment." (3) Title VII prohibits employment discrimination on the basis of race, color, religion, sex, or national origin. (4) Title VII generally applies to religious organizations; (5) however, in order to avoid offending the religion clauses, Congress added an exemption, codified in section 702 of the Act, for "religious corporations], association[s], educational institution[s], or societ[ies]" with respect to Title VII's prohibition against religion-based discrimination. (6)

   Section 702 is intended to protect religious organizations from unconstitutional government intrusions into their religious affairs. (7) Yet in drafting Title VII, Congress provided little guidance on determining whether an entity qualifies as a religious organization. (8) As a result, the courts were tasked with developing a workable standard. (9) A circuit split has developed. (10) over the years, federal courts applied four different tests to determine whether organizations were religious. (11) However, in Spencer v. World Vision, Inc., the U.S. Court of Appeals for the Ninth Circuit called into question the constitutionality of these competing tests and subsequently issued three separate opinions, with each judge proposing a new test. (12) Although the Spencer court correctly pointed out flaws in the tests applied by other circuits and offered new considerations that are helpful in applying section 702 to future cases, it failed to develop a standard that adequately protects the religious liberty of all religious organizations.

2. FACTS AND HOLDING

   In Spencer, Silvia Spencer, Ted Youngberg, and Vicki Hulse (collectively, Employees) filed Title VII claims against their former employer, World Vision, Inc. (World Vision). (13) World Vision is a nonprofit, self-described "Christian humanitarian organization" that provides humanitarian aid and services to impoverished people around the world. (14) Employees alleged World Vision terminated their employment because of their religious beliefs. (15) World Vision admitted that Employees were discharged because of their religious beliefs but claimed that as a "religious corporation," it is exempt under section 702 from Title VII claims based on religious discrimination. (16)

   Founded in 1950 by Dr. Robert Pierce, a pastor whose faith inspired him to begin sending monthly donations to a poor child in China, World Vision has grown into an international federation of national-level entities operating under one umbrella organization, World Vision International (WVI). (17) WVI is not a traditional church or house of worship, nor is it affiliated with any particular religious denomination. (18) However, the I.R.S. has classified it as a "church" for tax purposes. (19) World Vision represents the U.S. branch of WVI. (20) World Vision solicits financial donations from within the U.S. for a variety of humanitarian efforts, including its renowned child sponsorship program. (21) In addition to fundraising, World Vision collects and distributes supplies for overseas disaster relief, provides operational support to foreign relief centers, offers a wide-range of vocational training to international aid recipients, and educates people in the U.S. about the needs of the world's poor. (22)

   World Vision characterizes its humanitarian work as "a demonstration of God's unconditional love." (23) It believes that serving those in need "is a signpost of the good news of Jesus Christ[,] it is a means of building trust to those who may be skeptical[,] and it is a metaphor for a life transformed by Christ." (24) World Vision identifies itself as a Christian organization on its website, applications for employment, and assorted mailings soliciting donations and thanking donors. (25) World Vision's buildings are adorned with religious paintings, photographs, sculptures, and Bible verses. (26) World Vision's philosophy is articulated in its articles of incorporation:

   The primary, exclusive and only purposes for which this corporation is organized are religious ones, to wit: to perform the functions of the Christian church including, without limitation, the following functions, to conduct Christian religious and missionary services, to disseminate, teach and preach the Gospel and teachings of Jesus Christ, to encourage and aid the growth, nuture [sic] and spread of the Christian religion and to render Christian service, both material and spiritual to the sick, the aged, the homeless and the needy. (27) This philosophy is reiterated in World Vision's mission statement and core values. (28)

   Employees' job duties at World Vision were not inherently religious. (29) Spencer was employed as a tech-support telecom specialist, providing services related to the upkeep and maintenance of the organization's technology and facilities. (30) Hulse worked as an administrative coordinator, performing miscellaneous office tasks. (31) Youngberg was employed as a project manager, coordinating shipping and facility needs, such as preparing packages for shipping via UPS and coordinating furniture needs for World Vision offices. (32) Employees testified that they regarded World Vision as a secular organization because its humanitarian efforts are focused on meeting the physical rather than spiritual needs of aid recipients. (33)

   World Vision requires all new employees to sign an acknowledgment form indicating that they "subscribe[] wholeheartedly" to World Vision's statement of faith, core values, and mission statement. (34) New employees must also attend a two-day orientation that focuses on serving Christ by serving the needs of the poor. (35) Further, employees are required to participate in daily devotions and weekly chapel services. (36) Employees fulfilled these requirements. (37) However, approximately two years before their termination Employees began conducting a small group Bible study in place of World Vision's weekly employee chapel session with permission from a supervisor and with no objection from World Vision. (38) Employees continued to participate in World Vision's daily devotions, even leading their own respective sessions. (39) Nonetheless, it was brought to the attention of World Vision management that Employees stopped attending the weekly chapel services. (40) World Vision investigated Employees and learned that they had come to hold contrary beliefs regarding the deity of Jesus and the existence of the Trinity. (41) World Vision subsequently terminated Employees. (42)

   Employees filed charges of discrimination with the U.S. Equal Employment Opportunity Commission (EEOC). (43) Spencer and Youngberg received right-to-sue letters from the EEOC and filed suit in the U.S. District Court for the Western District of Washington. (44) Hulse joined the suit as a plaintiff upon receiving her right-to-sue letter. (45) World Vision filed a motion to dismiss Employees' claim pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6), asserting its exemption from religious discrimination claims pursuant to section 702. (46) Employees then filed a Federal Rule of Civil Procedure 56(f) motion, which the district court granted, converting World Vision's 12(b) motion to a motion for summary judgment on the section 702 exemption issue. (47)

   The district court entered an order granting World Vision's motion for summary judgment and dismissing Employees' claims in their entirety with prejudice. (48) In doing so, the district court concluded that a multifactor test previously utilized by the Ninth Circuit "d[id] not provide an accurate framework" for determining whether World Vision is religious. (49) Instead, the court applied a different multifactor test developed by the Third Circuit in LeBoon v. Lancaster Jewish Community Center Ass'n, (50) reasoning that the factors considered in LeBoon provided more flexibility and were more applicable to the facts of the case. (51) After applying the LeBoon test, the court determined that World Vision qualified as a religious corporation. (52) Employees appealed. (53)

   In a plurality decision with one judge dissenting, a panel of the Ninth Circuit Court of Appeals affirmed the district court's decision, but not under the LeBoon rationale. (54) Judges Diarmuid F. O'Scannlain and Andrew J. Kleinfeld formed the plurality, and they agreed on everything except the proper test. (55) Consequently, all three judges issued separate opinions, each offering a new test for determining whether an organization is religious. (56) Judge O'Scannlain held that World Vision is a religious corporation and therefore exempt from religious discrimination claims arising under Title VII because it is nonprofit, its articles of incorporation state a religious purpose, it performs activities in furtherance of its stated purpose, and it holds itself out to the public as religious. (57) Judge Kleinfeld concurred. (58) However, he did not do so because World Vision is a nonprofit corporation, but rather because it does not charge more than a nominal fee for its services. (59) Judge Marsha L. Berzon dissented, arguing that the exemption is intended to apply only to churches and entities similar to churches. (60)

   Following the decision, Employees filed a petition for rehearing en banc. (61) Judge Berzon voted to rehear the case en banc, and Judges O'Scannlain and...