Two Key Decisions from the Supreme Court Uphold Exemptions for Religious Employers Under the Affordable Care Act and Employment Discrimination Laws

Contributed by Megan Muoio, July 14, 2020

On July, 8, 2020, the Supreme Court of the United States handed down a 7-2 decision in Little Sisters of the Poor v. Pennsylvania, a case involving whether private employers with religious or moral objections could be required to provide birth control coverage under the Affordable Care Act (ACA). This case was consolidated with Trump v. Pennsylvania because they both addressed the same issue.

Enacted by Congress in 2010, the ACA required that health plans provide coverage for “additional preventive care and screenings” for women and authorized the Health Resources and Services Administration (HRSA), a division of the Department of Health and Human Services, to issue guidelines to implement that provision. The resulting guidelines required employers to provide FDA-approved birth control at no cost to women covered by their plan. In 2013, the HRSA promulgated subsequent guidelines that exempted houses of worship and provided an opt-out process for religious nonprofits. (Thereafter, in 2014, the Court applied the Religious Freedom Restoration Act (RFRA) to invalidate the birth control mandate as applied to a corporation owned by a religious family in Hobby Lobby v. Burwell.)

In 2017, the Trump administration expanded the ACA’s exemption from the birth control mandate to include private employers with religious or moral objections. In response, the Commonwealth of Pennsylvania asked the United States District Court for the Eastern District of Pennsylvania to block the implementation of the exemption nationwide based on the provisions of the ACA and the Administrative Procedure Act (APA). They were granted a temporary injunction, which was upheld by the Third Circuit Court of Appeals.

The Supreme Court reversed the Third Circuit in a 7-2 decision authored by Associate Justice Clarence Thomas. The majority held first that, in granting HHS the authority to promulgate rules to provide coverage for “additional preventive care and screenings,” the ACA gave HRSA broad discretion, including the discretion to create exemptions. Justice Thomas noted that, had Congress wished to specifically provide for birth control coverage, it could have done so. Because the ACA gave the HRSA authority to permit exemptions to the birth control mandate, the majority declined to address whether the RFRA required such an exemption. The majority also held that the agency complied with the APA in promulgating the exception.

In a number of concurring opinions, the Justices demonstrated their ideological divide. The concurring opinion filed by Associate Justices Samuel Alito and Neil Gorsuch agreed with the conclusion of the majority but would have held that the RFRA also required the exemption from the birth control mandate. In contrast, the concurring opinion filed by Associate Justices Elena Kagan and Stephen Breyer in which they agreed with the majority based the language of the ACA but reasoned that, on remand to the District Court, it was likely that the exemption would be found to be arbitrary and capricious in violation of the APA.

In another decision handed down the same day, Our Lady of Guadalupe School v. Morrissey-Berru, a 7-2 majority of the Court held that lay teachers who provide religious instruction as part of their “core function” at Catholic elementary schools are barred from suing their employers for employment discrimination. The majority decision was written by Associate Justice Samuel Alito.

The case involves the “ministerial exception,” a doctrine which grew out of the right of religious institutions to select clerical leaders without government interference. In 2012, the Supreme Court in Hosanna-Tabor Lutheran Church and School v. EEOC held that a Lutheran church and school could not be sued by an employee who was a minister and engaged in religious instruction in the course of her employment.

In Morrisey-Berru, the Court took up the issue of two lay teachers who engaged in both secular and religious instruction. The first plaintiff was a teacher who sued her Catholic elementary school employer for terminating her on the basis of age. The second plaintiff, also a Catholic elementary school teacher, sued her employer because she alleged that she was terminated because she had breast cancer. Both cases were thrown out at the federal district court level due to the application of the ministerial exception and appealed to the Ninth Circuit Court of Appeals, and then to the Supreme Court.

In the majority opinion, Justice Alito rejected a rigid test for whether the teachers were ministerial employees. He reasoned that, although the teachers were not designated as ministers and had less religious training than teachers in previous cases, their core function was teaching religion. Associate Justices Clarence Thomas and Neil Gorsuch filed a concurring opinion, agreeing with the conclusion on the basis that the Court should defer to any ministerial label placed on an employee by a religious organization. The dissenting justices, Associate Justices Ruth Bader Ginsburg and Sonya Sotomayor, disagreed with the conclusion on the basis that the teachers were primarily secular teachers, lacked religious training, and “were not even required to be Catholic,” therefore did not fall under the ministerial exception.