Monday, December 09, 2013

Hobby Lobby and the Establishment Clause, Part III: Reconciling Amos and Cutter

Guest Blogger

Micah Schwartzman, Richard Schragger, and Nelson Tebbe

We have been arguing (here, here, and here) that a religious exemption to the contraception mandate would raise serious concerns under the Establishment Clause. In our last post, we rejected the argument that employees are not burdened when the government creates an exemption from a government-provided benefit. Here, we want to consider a different objection, namely, that the Supreme Court has, in fact, allowed religious employers to impose substantial burdens on their employees. This objection rests, in turn, on a more general claim, which is that the Establishment Clause does not prohibit costs shifting when the government lifts burdens it has imposed on private religious actors.
A number of critics, including Eugene Volokh (here), have argued that the Establishment Clause prohibition on cost shifting does not apply in Hobby Lobby. To make this argument, they rely upon the Supreme Court’s decision in Corporation of Presiding Bishop v. Amos, which held that religious non-profit associations have a statutory right, pursuant to a religious exemption in Section 702 of Title VII, to discriminate on religious grounds against employees who do not share their religious affiliation, even when those employees are performing otherwise secular functions.

Some have misread Amos to stand for the proposition that the Establishment Clause does not limit cost shifting when the government lifts burdens that it has created, but only when it imposes legal obligations on third parties. We reject this view because it flatly contradicts the Supreme Court’s decision in Cutter v. Wilkinson, which relied upon Estate of Thornton v. Caldor to hold that the Establishment Clause requires courts to “take adequate account of the burdens a requested accommodation may impose on nonbeneficiaries.” (We previously discussed Caldor here.)

A better interpretation of these cases is available – one that gives full meaning both to Amos and to the prohibition on cost shifting in Cutter and Caldor. In our view, Amos is about protecting the associational interests of churches and religiously-affiliated non-profits by allowing them to control their membership. But that protection does not extend to for-profit enterprises, which generally have weaker associational interests and which implicate greater concerns about equality of opportunity in the market. As we argue below, this interpretation is superior because it shows that the Supreme Court’s precedents concerning Establishment Clause limits on religious exemptions – Amos, Caldor, and Cutter can be reconciled in a way that respects the different constitutional values expressed in them.

1.      Limiting Amos

While Amos places some limits on the Establishment Clause prohibition on cost shifting, those limits are not nearly as far-reaching as some commentators have recently suggested.

Initially, as a doctrinal matter, the holding in Amos is narrow. The Court stated repeatedly that its decision applied only to religious ­non-profit activities. It also emphasized that those activities were “expressive of the Church’s religious values.” Furthermore, in an often-overlooked passage, the Court addressed the distinction between non-profit and for-profit activities. Noting that a lower court had expressed the “fear that sustaining the [religious] exemption would permit churches with financial resources impermissibly to extend their influence and propagate their faith by entering the commercial, profit-making world,” the Court again underscored that its decision applied only to longstanding, religious non-profit activities.

The Court in Amos was right to be ambivalent about extending religious exemptions to for-profit activities, for at least two reasons:

(1)  Associational freedom: For-profit employers generally have weaker associational interests than houses of worship and the religious non-profits that are affiliated with them. In their concurring opinions in Amos, Justice Brennan and Justice O’Connor explained that religious communities have a significant interest in selecting their membership and leadership according to their doctrinal commitments. This interest is what justifies the religious exemption from Title VII. Justice Brennan appealed to the idea of “church autonomy” (citing the work of Douglas Laycock). Amos can be read as extending this form of autonomy to religious non-profits. (Judge Sykes took this view in her recent decision for the Seventh Circuit in Korte v. Sebelius: “The religious-employer exemptions in Title VII and the ADA are legislative applications of the church-autonomy doctrine.”) We have elsewhere expressed reservations about the idea of church autonomy. Whatever its merits, however, the legal doctrine is limited to churches. At most, it can be extended to religious non-profits affiliated with churches. But stretching that idea to encompass large, for-profit employers removes it from the context in which the idea was developed and for which it has its strongest normative appeal.
 (2)  Equality of opportunity: In part because of their size, large for-profit employers exert a stronger influence in the economy and in the labor market. When such employers exercise religious exemptions that impose significant costs on their employees, those costs are likely to be more substantial and far-reaching. Such burdens may seriously impair employees’ equality of opportunity in the workplace. Thus, whereas nearly everyone acknowledges that a church can discriminate against women in hiring clergy, the same is not true for large companies, including those with religious owners. Even if the government opted to allow such companies to discriminate on the basis of sex, the Establishment Clause would prohibit religious exemptions that allowed employers to exclude female employees from the commercial workforce.  
 We recognize that religious non-profits may also impose burdens on their employees, including in ways that hamper their equality of opportunity. We would not rule out the possibility that some cases might raise concerns that sound in the Establishment Clause – as where a religious non-profit (e.g., a hospital) monopolizes a local market. But setting aside special circumstances, concerns about equality of opportunity in the non-profit context are mitigated in part by the reasonable expectation that employees who work for churches and religious-affiliated non-profits understand that their employers are focused on advancing a religious mission; whereas the same is generally not the case for employees who work for large, for-profit corporations, whose primary mission is to make money.
To summarize, although we agree that Amos allows some religious employers to impose substantial burdens on third parties, the Court’s holding is limited to churches and religious-affiliated non-profit activities. Moreover, there are good reasons for those limits. The value of associational freedom is stronger for churches than it is for profit-seeking enterprises, while equality of opportunity favors constraining religious exemptions in the commercial sphere that would otherwise burden non-beneficiary employees.

We now address a competing view, which attempts to reconcile Amos and Cutter by broadening Amos to include for-profits and by marginalizing what Cutter says about limiting religious exemptions. While this view has some textual support in Amos, we find that basis insufficient, especially because it requires an incoherent interpretation of the Supreme Court’s more recent decision in Cutter. More importantly, any view that requires us to ignore or diminish what the Court has called a “fundamental principle of the Religion Clauses” is one that we should disfavor.

2.      Lifting v. imposing burdens

Those who reject Establishment Clause limits on burden-shifting in Hobby Lobby argue that there is a crucial distinction between the government (a) lifting a burden it has imposed on private parties, which is always permissible under the Establishment Clause, at least provided that the government does not favor one religion over another, and (b) imposing a legal obligation on private parties that substantially burdens them, which may be impermissible under the Establishment Clause.

The argument for this distinction is that in Amos, the government was lifting a burden that it had imposed on religious employers, namely, the prohibition on religious discrimination in Title VII. By contrast, in Caldor, the government was not lifting a burden, but rather imposing a legal obligation on private employers to accommodate their employees’ religious observances.

We recognize that there is some textual support for this argument in Amos. In a footnote, the Court distinguished Caldor on the grounds that the challenged Connecticut statute “had given the force of law to the employee’s designation of a Sabbath day and required accommodation by the employer regardless of the burden which that constituted for the employer or other employees,” whereas, in Amos, “it was the Church … and not the Government, who put [the employee] to the choice of change his religious practices or losing his job.”

But like Gedicks and Van Tassell, and Justice O’Connor before them, we think this attempt to distinguish Caldor is incoherent. It makes no sense to say that the government was responsible for the burden on third parties in Caldor but not in Amos. In Caldor, the government granted a religious accommodation to employees: it gave them the right not to work on the Sabbath day of their choosing. Their power to exercise that right burdened third parties, namely, their employers and fellow employees. The same is true in Amos, where the government granted a religious accommodation to employers: it gave them the right to discriminate on religious grounds against employees. Their power to exercise that right burdened third parties, namely, those employees who lacked the proper religious affiliation.
Concurring in the judgment in Amos, Justice O’Connor rightly noted that “there is little significance to the Court’s observation that it was the Church rather than the Government that penalized [the employee’s] refusal to adhere to Church doctrine … The Church had the power to put [the employee] to a choice of qualifying [religiously] or losing his job because the Government had lifted from religious organizations the general regulatory burden imposed by [Title VII].”
Not only is the Amos majority’s attempt to distinguish Caldor conceptually unsound, the Court has declined to follow it. As we have previously noted, in Cutter, the Court relied explicitly on Caldor for the general proposition that “an accommodation must be measured so that it does not override other significant interests.” And nowhere does the Court limit this Establishment Clause principle to cases in which the government has imposed a legal obligation on private parties, as opposed to lifting burdens that the government has otherwise created.
There is more:  if Amos stands for the proposition that the Establishment Clause does not prohibit cost shifting when the government lifts a burden imposed on private parties, then Cutter could not have relied on Caldor to limit a religious exemption, RLUIPA, that might have otherwise burdened non-beneficiaries.
But as we have seen, that is exactly what the Court did. In affirming RLUIPA’s facial constitutionality under the Establishment Clause, the Cutter Court explained that “[f]oremost, we find RLUIPA's institutionalized-persons provision compatible with the Establishment Clause because it alleviates exceptional government-created burdens on private religious exercise” (emphasis added). That is, in enacting RLUIPA, the government did not impose a legal obligation on private parties; rather, it lifted a government burden – just as it had in Amos. And indeed the Court recognized this point by citing Amos, along with only one other case (Kiryas Joel), for the proposition that “removal of government-imposed burdens on religious exercise is more likely to be perceived ‘as an accommodation of the exercise of religion rather than as a Government endorsement of religion.’” Then, in the very next sentence, the Court held that RLUIPA did not “founder on shoals our prior decisions have identified” because it required courts to account for burdens imposed on non-beneficiaries, at which point the Court cited Caldor.*
We conclude that the Amos Court’s approach to distinguishing Caldor was mistaken, and that this mistake was not repeated, but indeed implicitly rejected, by the Court in Cutter. That is the only way to make sense of how RLUIPA, a burden-lifting statute, could be limited by the general principle announced in Caldor.
3.      Reconciling the cases
As we have been arguing, there is a better reading of Amos and Cutter. The Establishment Clause includes a general prohibition on requiring some citizens to contribute significantly to subsidize the religious beliefs and practices of others. When the government provides a religious exemption that imposes substantial burdens directly on third parties, it effectively compels them to pay for another’s religious observance. But this principle does not hold for exemptions that allow houses of worship, and by extension religiously affiliated non-profits, to select their members according to their religious views. Certain exemptions from antidiscrimination law are designed to respect the associational interests of religious groups, while to some extent relying on reasonable expectations about the purposes of those organizations to mitigate potential burdens on third parties. That is why Amos limits the burden-shifting principle with respect to churches and religious non-profits in deciding their membership. But as applied to the category of large, for-profit corporations, the order of values is generally reversed. Associational interests are diminished, and concerns about equality of opportunity are overriding. In those circumstances, the Establishment Clause limits on burden shifting expressed in Cutter and Caldor have their full effect.
As we read them, Amos and Cutter are not in tension. There is nothing strange about giving churches more room to maneuver than commercial profit-making ventures that are owned by religious believers. We can recognize that groups with religious or expressive purposes have a greater measure of associational freedom, while at the same time acknowledging that exemptions for activities in the marketplace raise substantial equality concerns. Those exemptions can put burdens on basic rights to workplace non-discrimination, security, health, and personal welfare. And they raise concerns that the government may be favoring one set of players in the marketplace over others. That is why the associational and expressive rights that apply more broadly in the church setting are not appropriate in the commercial setting. And this is why the general prohibition on burden shifting is so important: it signals that Establishment Clause limitations have been reached.
This reconciliation of the Court’s precedents concerning Establishment Clause limits on religious accommodations fits the doctrine and shows how it is supported by important constitutional values. In both respects, our account is superior to an interpretation that renders the Court’s decisions incoherent, while at the same time ignoring, or perhaps sacrificing, a fundamental principle of the Establishment Clause.
The employees whose interests are at stake in the contraception mandate litigation have a serious legal claim, which the government has failed to articulate. The Establishment Clause provides them with grounds for a significant complaint – one that the Supreme Court should take into consideration when it decides the first wave of these cases later this term.
* A reader has suggested to us (and Eugene Volokh has argued here) that Cutter did, in fact, involve a law that imposed obligations, rather than lifting government burdens. According to this argument, RLUIPA is a federal law that imposes legal obligations on state prisons to accommodate the religious practices of their prisoners. Thus, as applied to state prisons, religious exemptions that impose substantial burdens would violate the Establishment Clause.
The unstated corollary of this argument is that, as applied to federal prisons, RLUIPA would be wholly unconstrained by the Establishment Clause’s prohibition on burden shifting. The result would be that state prisons, but not federal ones, would be subject to the limitations stated in Cutter and Caldor.
To put it bluntly, we think this argument shows the absurdity of the Amos Court’s interpretation of Caldor and contemporary reliance on it. Nowhere does the Court in Cutter remotely suggest a difference in how it would apply the burden-shifting principle to state and federal prisons. Moreover, the Court is explicit that RLUIPA lifts government-imposed burdens on “private religious exercise” – indeed, that conclusion was central to its holding that RLUIPA is constitutional. Of course, none of this is surprising, since the argument for a distinction between religious exemptions that lift a burden and impose an obligation rests on a conceptual confusion, as Justice O’Connor made clear nearly two decades earlier.

Micah J. Schwartzman is
Edward F. Howrey Professor of Law at
the University of Virginia School of Law. You can reach him by e-mail at schwartzman at

Richard C. Schragger is Perre Bowen Professor Barron F. Black Research Professor of Law at the University of Virginia School of Law. You can reach him by e-mail at schragger at

Nelson Tebbe is Professor of Law at
Brooklyn Law School. You can reach him by e-mail at nelson.tebbe at

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