U.S. Supreme Court Exempts Religiously Affiliated Hospitals From Pension Protections

The U.S. Supreme Court unanimously ruled that religiously affiliated hospitals do not have to comply with federal regulations that protect employee pensions.

On June 5, eight justices (newly appointed Justice Neil Gorsuch did not participate in the decision) ruled these health systems can take advantage of the same exemption given to houses of worship.

“The Supreme Court has put the retirement of hundreds of thousands of Americans at risk,” said Richard B. Katskee, legal director of Americans United. “These hospitals now have the right to use their religious affiliation to pocket hundreds of millions of dollars that they promised to their employees as retirement funds and pensions.”

The decision involves three cases – Dignity Health v. Starla Rollins, Advocate Health Care Network v. Maria Stapleton and St. Peter’s Healthcare System v. Laurence Kaplan – and the Employee Retirement Income Security Act. ERISA is a federal law that protects employee pensions by requiring employers to make good on their promises to workers by funding and insuring pension plans as well as keeping employees informed about them.

In a friend-of-the-court brief filed in the case, Americans United pointed out that religiously affiliated hospitals and medical centers employ hundreds of thousands of employees, the vast majority of whom perform secular duties.

As highlighted by Justice Sonia Sotomayor in her concurring opinion, the religiously affiliated hospitals “operate for-profit subsidiaries ... employ thousands of employees ... earn billions of dollars in revenue ... and compete in the secular market with companies that must bear the cost of complying with ERISA. …This current reality might prompt Congress to take a different path.” AU hopes Congress will heed Sotomayor’s warning to remedy this injustice to workers.

“Religious freedom is a fundamental American value. And the ability to retire with financial security is an important part of the American dream,” Katskee added. “Our country can and should deliver both.”

On the same day the high court ruled in this case, the justices declined to hear another case that involved a misuse of religious freedom. In Sterling v. United States, former Marine Lance Corporal Monifa Sterling sued because she was court-martialed after she refused to fulfill some of her duties, including ignoring orders from superior officers, not showing up for duty and refusing to wear a required uniform.

In the midst of her insubordination, she posted signs around her work space that read, “No weapon formed against me shall prosper.” When she refused to remove the signs, her supervisor took them down – and she put them back up. It wasn’t until months later, during her court-martial proceedings, that Sterling said for the first time that the signs were religious and that posting them should be protected by the Religious Freedom Restoration Act, a federal law designed to protect religious expression.

The Courts of the Armed Forces concluded after-the-fact claims of religious liberty cannot excuse blatant insubordination, and since the Sup­reme Court declined to accept the case, the military’s decision stands.

AU and allied groups filed a friend-of-the-court brief in the case, noting the military is required to meet the reasonable religious needs of the men and women who serve in uniform, but it isn’t required to tolerate insubordination or just plain bad behavior.

On AU’s “Wall of Separation” blog, AU Communications Director Rob Boston applauded the high court’s decision not to take the case: “Religious liberty is a fundamental American value, but allowing service members to do as they please under the guise of religion would undercut genuine claims for religious exemptions. And this case was only ever really about insubordination.”