New Ruling For Religious Employers Limits "Ministerial Exception" to Wage and Hour Claims

The California Court of Appeal recently waded into the First Amendment guaranty of separation of church and state in Su v. Stephen S. Wise Temple, decided March 8, 2019. The case arose when the California Labor Commissioner sued the Reform Jewish synagogue, Stephen S. Wise Temple, which operates a preschool, for failing to provide 10 minute rest breaks, 30 minute meal breaks, and overtime pay to its teachers, as required under California’s Labor Code. The Temple argued its teachers were exempt from the state’s law requirements under the “ministerial exception,” first developed by the courts in 1972 and universally recognized, including by the U.S. Supreme Court.

The ministerial exception permits a church, synagogue, or other religious institution to engage in conduct that may otherwise be held to be impermissible under state and federal law. The underlying principle behind the exception is that if the state via wage and hour or anti-discrimination laws, for example, were to require a religious institution to employ or retain a minister, this would intrude on the religious institution’s internal governance, violating the First Amendment’s guaranty of separation of church and state.

The Court of Appeal analyzed whether the preschool teachers qualified as “ministers” within the meaning of the exception. While the preschool had a partially religious curriculum, including teaching Jewish holidays, observance of sabbath, and Jewish values and rituals, the teachers were not required to be Jewish, were not required to undertake theological study, and in fact several former and current teachers were catholic, including a teacher that previously taught at a catholic school and another that taught catechism at a church.

The Court of Appeal considered whether: (1) the synagogue gave teachers the title of minister or any other religious titles, they are ordained, and if they are required to be Jewish; (2) teachers are required to pass religious instruction or hold religious degrees, (3) teachers held themselves out as ministers, for example by claiming tax benefits that would be available only to ministers, and (4) teachers are responsible for teaching a religious curriculum and have a role in transmitting Jewish religion and practice to the children.

Of the above, only the fourth factor weighed in favor of applying the ministerial exception. Based on the factors as a whole, the Court of Appeal held that the teachers were not ministers, the exception did not apply, and the Labor Commissioner was permitted to proceed with the claims for violation of wage and hour laws.

Religious employers should take note that unless employees are held out as ministers and have earned religious degrees or passed instruction, in addition to being engaged in some religious activities, they will probably not be immune from state wage and hour laws or other state labor and employment laws.

Reserved for a future case is whether the exception applies to a religious institution where all employees, from preschool teachers to office staff to janitors, are required to be members of the religious faith, are ordained, and hold titles as ministers. What would be the outcome where religious instruction and ministering to the congregation are claimed to be an integral parts of all employment positions?

Laine Mervis is a litigator specializing in contract disputes, commercial transactions, and business and investment frauds. He can be reached at laine@eanetpc.com.

Laine Mervis