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Legal Issues of Interest
Please see the write up of the March 2009 decision in the Carroll College case for the latest, which overturned the ruling referenced below.
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Carroll College and UAW Case 30-RC-6594, NLRB decision and order Aug. 26, 2005

N.B. This write up of the Carroll College case is posted with permission of Jeffrey A. Berman, Sidley Austin Brown and Wood LLP (October 2005)

Recent Developments in Labor Law Affecting Religious Institutions

Presbyterian College Held Subject to Potential Unionization: National Labor Relations Board Clarifies Implications Of Religious Freedom Restoration Act For Religious Institutions

In a decision of uncertain import, the National Labor Relations Board (Board) has affirmed the assertion of jurisdiction over a college affiliated with the Presbyterian Church. Carroll College, Inc., 345 NLRB No. 17 (2005). At issue was whether the Religious Freedom Restoration Act (RFRA) precluded the Board from asserting jurisdiction over a union's effort to organize the faculty employed by Carroll College, a private Wisconsin liberal arts school affiliated with the Presbyterian Church. The College contended that the Board's assertion of jurisdiction would impermissibly impose a "substantial burden" on its exercise of religion in violation of RFRA. The Board reached a contrary conclusion, substantially based on its finding that the College failed to present adequate evidence of the burden on its religious exercise.

Religious Liberty Standards Clarified

At the outset of its decision, the Board noted the debate over whether RFRA is constitutional as applied to the federal government. Nevertheless, as it previously did in University of Great Falls, 331 NLRB 1663 (2000), enforcement denied 278 F.3d 1335 (D.C. Cir. 2002), the Board assumed that RFRA was constitutional as applied to the National Labor Relations Act and its proceedings.

In Great Falls, the Board had previously concluded that a religious school that failed the test established by the Supreme Court in NLRB v. Catholic Bishop of Chicago, 440 U.S. 490 (1979) could not then escape Board jurisdiction on RFRA grounds. This holding was reversed by the D.C. Circuit in Great Falls, which clarified that the tests under the Supreme Court's Catholic Bishop decision and RFRA are independent.

Although the Board often does not follow the ruling of a particular Court of Appeals, it specifically accepted the D.C. Circuit's analysis in Great Falls. Under that rationale, a determination that an entity is not exempt from Board jurisdiction under Catholic Bishop does not foreclose a RFRA claim that requiring the entity to engage in collective bargaining would "substantially burden" its exercise of religion. Accordingly, the Board disavowed its decision to the contrary in Great Falls and held that a party that desires to bring a RFRA claim before the Board will have it analyzed independent of any Catholic Bishop exemption claim. This change in position was particularly important to Carroll College as it had conceded that it did not satisfy the Catholic Bishop test.

In outlining the RFRA requirements, the Board acknowledged that RFRA requires a three-step analysis: (1) whether assertion of Board jurisdiction would substantially burden the entity's ability to freely exercise its sincere religious beliefs, (2) whether the Act serves a compelling governmental interest, and (3) whether application of the Act is the least restrictive means of accomplishing that compelling interest. In this regard, the Board also recognized that the "substantial burden" standard to be applied is the one set forth in the Sherbert v. Verner, 374 U.S. 398 (1963) and Wisconsin v. Yoder, 406 U.S. 205 (1972) decisions, and that the Supreme Court's subsequent holding in Dept. of Human Resources of Oregon v. Smith, 494 U.S. 872 (1990), was not relevant to the inquiry.

Application of Test to Carroll College

Given that the Regional Director had not performed this three-step RFRA analysis, the Board was required to do so in the first instance. Essentially, Carroll College argued that a requirement to bargain with the Union would substantially burden its free exercise of religion because it would interfere with its right to decide whether the faculty members that the union sought to represent were "discharging the Christian objectives and purpose of the institution." The Board concluded that this contention was not supported by the evidence. As noted by the Board, the relevant testimony on this issue consisted of less than two pages of an 874-page record.

Specifically, the Board noted that there was nothing in the record to indicate that the College used any religious criteria in its hiring process or in connection with other employment decisions, nor that faculty members were required to agree to any particular statements of belief. In fact, Carroll College's Articles of Incorporation specifically prohibit religious discrimination in admissions and employment. Further, there was nothing in the record to indicate that a faculty member was ever disciplined - or that any other action had been taken - for engaging in conduct contrary to the teachings of the Church or for advocating ideas contrary to Christianity or the Presbyterian Church.

The Board next noted that the union had not yet been certified as the collective bargaining representative of the faculty and that "no specific religion-based conflicts have emerged." It then stated that "hypothetical transgressions" or "the mere potential for transgression" is not enough to satisfy RFRA's substantial burden test. According to the Board, the burden must be "a demonstrable reality," and not "merely a speculative possibility." In this vein, the Board stated that compliance with the regulation must be "directly contrary to the claimant's religious beliefs." It concluded by stating that the proper inquiry in connection with either an election proceeding or a test of certification by refusing to bargain would be subject to the same standard.

In the Board's view, a potential religious-based conflict generally cannot emerge without bargaining taking place. Applying this test to Carroll College, the Board noted that it had not offered a "single piece of evidence" to indicate what the tenets of the Presbyterian faith were or how requiring the College to collectively bargain would conflict with those tenets and create a substantial burden on its free exercise of religion.

Of interest is the fact that the Board specifically noted that the record in this case stood in "stark contrast" with Ukiah, in which the Board had asserted jurisdiction over a Seventh-day Adventist hospital notwithstanding its claim that Church teachings prohibited it from recognizing a union. Ukiah Valley Medical Center, 332 NLRB 602 (2000). In that case, the hospital had raised both RFRA and First Amendment arguments. In Carroll College, the Board distinguished Ukiah, however, based on the fact that the hospital had "offered voluminous evidence to demonstrate that the Adventist faith prohibits Adventist institutions such as Ukiah from recognizing or bargaining with the unions." The Board went on to note that Carroll College did not claim that Presbyterian doctrine forbids collective bargaining or requires it to engage in unfair labor practices.

The Board also contrasted prior cases involving Catholic and Lutheran employers. In these cases, the doctrine of the sponsoring religions did not counsel them to either refuse to bargain with a union or to commit unfair labor practices. Finally, the Board stated that there was nothing in the record indicating that requiring Carroll College to bargain with the union would put pressure on it to modify its religious behaviors or violate its belief.

The implications of this decision for other religious institutions remain unclear, but the tests for challenges under Catholic Bishop and RFRA have at least been qualified. At this point, religious institutions opposing unionization efforts would be well-advised to build as substantial a record as possible of any religious basis for their action.

Sidley Austin Brown and Wood LLP filed an amicus brief on behalf of a group of Seventh-day Adventist hospitals in Carroll College. Sidley also filed an amicus brief in Great Falls, both before the Board and the D.C. Circuit, and it represented the employer in Ukiah.

See the Sidley Austin Brown Religious Institutions Practice Group Web page for more on decisions and filings of interest to religious institutions.