• Key point. Federal law exempts churches from the ban on "religious discrimination" in employment. However, church leaders must articulate clearly the religious basis for adverse employment decisions in order to qualify for the exemption.
A federal court ruled that a church—affiliated private school could be sued by a former employee who had been dismissed for extramarital sexual relations. In 1995, the school hired an unmarried woman as a math teacher. When she was hired, the woman signed a statement expressing her agreement with the school's "statement of belief" and agreed that her "lifestyle" would be "in accordance with the will of God and the Holy Scripture." A year later the school learned that the teacher (who was still unmarried) was pregnant. Because sexual activity outside of marriage violated the religious beliefs of the school, the teacher was dismissed. She rejected the school's offer to rehire her after giving birth. Shortly after being dismissed, the woman sued the school, claiming that the school had discriminated against her on the basis of pregnancy in violation of Title VII of the Civil Rights Act of 1964. She insisted that she was never informed, before her pregnancy, of any school policy against extramarital sexual relations, and she further claimed that she was told "I was terminated due to the fact that I was pregnant and unmarried and therefore a bad role model." The school denied that pregnancy rather than sexual activity was the basis for the teacher's dismissal. It conceded that this was the first case in which it had dismissed an employee for extramarital sex, but it insisted that it would treat male employees no differently if a case arose. The school asked the court to dismiss the lawsuit on the ground that Title VII permits religious employers to discriminate against employees on the basis of religion. The court declined to do so.