Church Law and Tax 1993-05-01 Recent Developments

Employment Practices

Richard R. Hammar, J.D., LL.M., CPA

• Key point: State civil rights laws often contain limited exemptions for religious organizations.

• The Kansas Supreme Court ruled that a state civil rights law that prohibited race and sex discrimination did not apply to religious organizations. A church operated a child care program as a part of its mission. A former employee of the child care program filed a complaint with a state civil rights agency alleging that his dismissal was a result of race and sex discrimination. The church asked a court to dismiss the complaint on the ground that the agency had no jurisdiction over the church. A trial court agreed with the church and dismissed the case, and the state appealed. A state appeals court noted that the state civil rights law (that banned discrimination in employment on account of “race, religion, color, sex, handicap, national origin or ancestry”) only applied to “nonsectarian corporations.” The court concluded that “by specifying an including nonsectarian corporations under the act, the legislature obviously intended to exclude sectarian employers.” The state also claimed that while the church may be a sectarian corporation, its child care program should be viewed as a separate and nonsectarian employer. The court disagreed: We consider this argument untenable for a number of reasons …. There was apparently no testimony, and there is nothing in the record to indicate, that the child care program operated by the church was anything other than sectarian in nature. We believe it is reasonable to conclude that, if the purpose of the church is to honor and carry out the will of God; to carry on religious, educational, and missionary work; and to manifest the unity of the congregation’s faith in Jesus Christ as God and Savior, the child care program run by the church will attempt to meet those goals. These purposes are all clearly set forth in the church’s articles of incorporation and in its constitution. There is simply no evidence in the record to indicate that the child care program can be separated from the other operations of the sectarian corporation which is known as the Zion Lutheran Church.” Determined to find the church liable, the state appealed to the state supreme court. The supreme court affirmed the appeals court’s decision in favor of the church, and adopted the appeals court’s decision as its own. This case is important for a couple of reasons. First, it illustrates the tenacity with which some civil rights agencies will pursue churches, despite an obvious exemption. Second, the decision represents an excellent statement of the religious nature of church-operated child care programs. This language will be useful whenever a government agency attempts to “sever” a child care program from a church in order to subject it to separate regulation. This principle will be pertinent not only in cases of alleged civil rights violations, but also in cases of property tax exemption and zoning. Zion Lutheran Church v. Commission on Civil Rights, 830 P.2d 536 (Kan. 1992).