Government Funding of Religious Discrimination: The Constitutional Questions and the OLC Opinions

Government may not, of course, discriminate on the basis of religion when it hires its own employees. So says the First Amendment, the Equal Protection Clause and (with respect to the federal government) Article VI. But what happens to this guarantee of nondiscrimination when the state “devolves” certain social-service functions to the private sector, and then subsidizes such functions by providing direct grants to the private entities performing the services? Can a government provide direct funding to a social-service organization, knowing that the funds will be used to subsidize employment positions that are made available only to persons of a single religious denomination?

A bit of background: A principal goal of the President’s “Faith-Based Initiative” is to ensure that a greater percentage of federal grants is awarded to religious, or faith-based, social-service providers, to enable such providers to perform social services (such as drug counseling, welfare assistance, child care, etc.). The initiative has, of course, been very controversial in several respects. One of the most important unresolved constitutional questions is whether there are certain sorts of religious entities (churches, for instance) to which the state may not make direct financial grants. (Justice O’Connor’s governing concurrence in Mitchell v. Helms cryptically indicated that there are “special dangers associated with direct money grants to religious institutions,” including a concern that is “based on more than just diversion [of the aid to religious activities]”; and she cautioned that “the most important reason for according special treatment to direct money grants is that this form of aid falls precariously close to the original object of the Establishment Clause’s prohibition.” But the courts have not yet resolved the implications of Justice O’Connor’s warnings.)

It is basically settled, however, that the state may provide direct aid to at least some organizations that are “faith-based” in the sense that they are affiliated with a church or motivated by a religious mission. See, e.g., Bowen v. Kendrick. Nevertheless, under governing doctrine—including the views of all nine Justices in Kendrick and Justice O’Connor’s governing opinion in Mitchell v. Helms—such recipients of direct aid may not engage in “specifically religious activities,” such as prayer, religious education and proselytizing, at least within the “program” that is funded by the state.

OK, but even if its state-subsidized functions must be secular, what if such an organization decides to hire only persons of one religion? Certainly the state may prohibit such discrimination as a condition of the entity’s receiving aid. But must it do so? What if a government, such as the Bush Administration, wishes to permit the recipient organization to prefer coreligionists, even in employment positions that are government-funded? (For a very helpful collection of materials discussing the policy and legal questions associated with this issue, see this page of the Roundtable on Religion & Social Welfare Policy site.)

The context for the principal constitutional question is this: Although title VII of the 1964 Civil Rights Act generally prohibits religious discrimination in employment, Congress carved out an exemption for certain religious organizations to permit them to discriminate in favor of coreligionists. Several recent charitable-choice statutes expressly reaffirm the applicability of the title VII exemption, even for recipients of direct government aid, and other charitable-choice laws can be construed not to affect the title VII background rule. Thus, as a matter of federal statute, religious organizations that receive government aid under certain (but not all) charitable choice laws may continue to invoke the title VII exemption to allow them to restrict employment to coreligionists, even where the jobs in question are federally funded. (Such recipients may still be prohibited from such discrimination by state or local law, however.)

This raises the serious and unresolved constitutional question noted at the top of this post: Does the Establishment Clause permit the government to provide grants to a religious organization if such grants will subsidize discriminatory employment practices—particularly where the government requires all other, nonreligious employers to refrain from such discrimination?

The question is receiving a great deal of recent attention. It is one of the primary questions presented in the case of Lown v. Salvation Army (S.D.N.Y.), where the governments’ motion to dismiss is currently pending before a district judge in the Southern District of New York. In a recent series of four columns on FINDLAW—here, here, here, and here—Professors Vik Amar and Alan Brownstein argue that such funding of religious discrimination is unconstitutional. By contrast, at pages 39-49 of this recent monograph, Professor Carl Esbeck and colleagues at the Center for Public Justice argue that the title VII exemption for religious organizations is constitutional as applied to recipients of direct aid. And Professors Chip Lupu and Bob Tuttle, in a forthcoming comprehensive article concerning the Constitution and the faith-based initiative, have tentatively suggested a middle ground—namely, that the permitted discrimination is unconstitutional in some applications, i.e., as to certain employees, depending on how the discriminatory practice will affect actual religious practice and commitments. (The article is a work in progress, and Professors Lupu and Tuttle have cautioned that they are still working through this difficult question.) Earlier academic treatments include an article by Professor Steve Green, 30 Hastings Const. L. Q. 1 (2002), and a Note by Laura Mutterperl, 37 Harv. C.R.-C.L. L. Rev. 389 (2002).

The Bush Administration has consistently asserted that there is no Establishment Clause problem. Its views are expressed in an amicus brief that the Department of Justice recently filed in the Lown case, and in an Opinion of the Office of Legal Counsel promulgated in June 2001, which OLC just posted to the Web last week.

The Clinton Administration’s views were somewhat more complicated and equivocal than those of the Bush Administration. In October 2000, OLC promulgated this 33-page Opinion, which analyzes in depth the constitutional (and related statutory) questions. [Disclosure: I worked on both the 2000 and 2001 OLC Opinions.] The 2000 OLC Opinion was distributed widely outside the Executive Branch—inded, DOJ sent it to members of Congress—and it has often been cited and discussed in legislative testimony and academic articles. Assistant Attorney General Moss slated it for publication on the OLC website and in the bound volumes of OLC Opinions. OLC has not, however, posted it to the Office website.

The 2000 OLC Opinion identifies four distinct possible constitutional objections to government funding of an employer that discriminates in favor of coreligionist employees. The Opinion turns aside two of those four constitutional arguments (pp. 17-20), and also explains (pp. 20-22) that when a private entity receives state funding in order to perform social services that the state itself might once have performed, the private entity does not thereby necessarily become a “state actor,” itself subject to constitutional rules against religious discrimination. The opinion also concludes, however (pp. 22-25), that certain government decisions to fund discriminatory organizations might raise serious Establishment Clause questions, depending on the manner in which the government decides which entities to subsidize. Finally, the Opinion explains (pp. 26-30) that although the constitutionality of the title VII religious exemption itself is difficult and unresolved as applied to employers that receive direct government aid, Justice Brennan’s concurrence in Corporation of Presiding Bishop v. Amos provides the basis of an argument that might survive scrutiny under the Court’s “religious accommodation” doctrine (a doctrine that the Court further developed just last week in Cutter v. Wilkinson). (This last argument, about Amos, also forms the heart of the 2001 OLC Opinion.) The 2000 Opinion also examines several difficult, related statutory questions (pp. 6-9, 30-32); background constitutional rules about the funding of religious activities and religious organizations (pp. 12-16); and a question involving the so-called “ministerial exception” to title VII, as applied to direct-aid recipients of social-service grants (pp. 32-33). [Note: As a result of a computer glitch, the 2000 Opinion as originally promulgated (and as linked here) doubled-numbered three footnotes (Nos. 39-41).]

Because this post is already overlong, I won’t go into detail here about the specifics of, and differences between, the two OLC Opinions. Perhaps I’ll have more to say in response to comments, or in further posts. For now, however, I think that folks interested in this constitutional question, or in the workings of the Department of Justice, may wish to read both Opinions—if only for what they demonstrate about how a change in Administrations can affect OLC’s practice and perspective on a particular constitutional issue.