In An Important Ruling for Religious Educational Institutions, The National Labor Relations Board Overrules Prior Decision and Holds that the NLRB Cannot Exercise Jurisdiction Over the Faculty of Religious Educational Institutions

Seyfarth Synopsis: The National Labor Relations Board (“NLRB”) issued an important ruling strongly protecting the First Amendment rights of religious educational institutions, holding that “while the [National Labor Relations] Act is of paramount importance in almost every other scenario — it is dwarfed by the First Amendment’s protection of religion.” In a ruling just issued on June 10, 2020 in Bethany College, 369 NLRB No. 98 (June 10, 2020), the Board formally overruled Pacific Lutheran University, 361 NLRB 1404 (2014). In its place, the Board adopted the jurisdictional test announced by the D.C. Circuit in University of Great Falls v. NLRB, 278 F.3d 1335 (D.C. Cir. 2002). Now, the Board will decline jurisdiction over faculty at a religious college that (1)“holds itself out to students, faculty, and community as providing a religious educational environment”; (2) is “organized as a nonprofit”; and (3)is “affiliated with, or owned, operated, or controlled, directly or indirectly, by a recognized religious organization, or with an entity, membership of which is determined, at least in part, with reference to religion.”

Background

In the 1970s, the Board tried to exercise jurisdiction over teachers at Catholic high schools. In a seminal case on the issue, the United States Supreme Court in NLRB v. Catholic Bishop of Chicago, 440 U.S. 490 (1979) rejected the Board’s exercise of jurisdiction under the canon of constitutional avoidance. Although the National Labor Relations Act does not exclude religious employers, the Supreme Court rejected this effort because of the concern that the Board’s exercise of jurisdiction raised a “significant risk that the First Amendment will be infringed,” and the Court could be forced to “resolve difficult and sensitive questions arising out of the guarantees of the First Amendment Religion Clauses.”

Even after the Supreme Court’s decision, the Board consistently tested the limits of the Catholic Bishop decision until the reviewing courts rejected the Board’s attempts. In University of Great Falls v. NLRB, 278 F.3d 1335 (D.C. Cir. 2002), the D.C. Circuit rejected the Board’s test in exercising jurisdiction over the faculty of a private Roman Catholic university claiming exemption under Catholic Bishop. Instead, the D.C. Circuit promulgated a three-prong test where the Board “must decline to exercise jurisdiction” over a religious educational institution that:

(1) “holds itself out to students, faculty, and community as providing a religious educational environment”;

(2) is “organized as a nonprofit”; and

(3) is “affiliated with, or owned, operated, or controlled, directly or indirectly, by a recognized religious organization, or with an entity, membership of which is determined, at least in part, with reference to religion.”

Pacific Lutheran and Bethany College

Despite the Great Falls bright line test, the Board in Pacific Lutheran University, 361 NLRB 1404 (2014) once again attempted to limit Catholic Bishop and distinguish its applicability. There, the religious university argued that it was exempt from the Board’s jurisdiction. The Board majority imposed yet another burden on the university, holding that to be exempt from the NLRA, the institution also had to show that the petitioned-for faculty members themselves performed “a specific role in creating or maintaining the college or university’s religious educational environment, as demonstrated by its representations to current or potential students and faculty members, and the community at large.” In other words, the Pacific Lutheran University decision held that secular faculty at a religious institution were still subject to the Board’s jurisdiction.

Earlier in 2020, the D.C. Circuit Court in Duquesne University of the Holy Spirit v. NLRB, 947 F.3d 824 (D.C. Cir. 2020) rejected the Pacific Lutheran test in favor of the Great Falls bright line test. This week, the Board in Bethany College, 369 NLRB No. 98 (June 10, 2020), using the D.C. Circuit’s rationale, finally overruled Pacific Lutheran and adopted the three-prong Great Falls test.

Application in Bethany College

Bethany College is a 501(c)(3) institution of higher learning, and also a ministry of the Evangelical Lutheran Church in America (ELCA) that is owned and operated by the Central States Synod and the Arkansas/Oklahoma Synod of the ELCA.

The first prong (“holds itself out to students, faculty, and community as providing a religious educational environment”) was easily met because the college’s handbook explained its religiously based nature, as well as job postings showing that prospective faculty members were aware of the college’s religious educational environment.

The second prong (“organized as a nonprofit”) was also easily met because of its 501(c)(3) status.

Finally, the third prong (“affiliated with, or owned, operated, or controlled, directly or indirectly, by a recognized religious organization, or with an entity, membership of which is determined, at least in part, with reference to religion”) was likewise easily met because the Central States Synod and the Arkansas/Oklahoma Synod of the ELCA owned and operated the college.

Having met all three prongs, the Board declined to exercise jurisdiction.

Employer Takeaways

Given the Board’s decision in Bethany College, religious educational institutions are not subject to the NLRA and have assurance that faculty cannot organize under the NLRA, irrespective of the religious or secular nature of the particular faculty member’s educational focus. It is important to remember that the holding is limited to the faculty of self-identified religious schools. Seyfarth lawyers are available to assist employers in determining whether they would satisfy the Great Falls test used by the Board in Bethany College.