The Employee Retirement Income Security Act (ERISA) regulates employee-benefit plans to protect the interests of employees who participate in the plans. To avoid undue governmental intrusion in church affairs, the Act provides an exemption for plans established by churches. Some non-church entities have begun to claim this exemption.
St. Peter’s Healthcare System is a network of hospitals affiliated with the Catholic Church. It has a large number of employees whose duties are purely secular. By claiming the church exemption, St. Peter’s is able to maintain subpar benefit plans that imperil the financial well-being of its employees. In May 2013, employees of St. Peter’s brought a class action against the health system, seeking to require St. Peter’s to comply with ERISA. The trial court ruled in favor of the employees, and the healthcare network appealed to the U.S. Court of Appeals for the Third Circuit.
In May 2015, we filed an amicus brief in support of the employees. We argued that interpreting ERISA’s church exemption to extend to entities like the healthcare system would inflict serious harms on employees and would violate the Establishment Clause. Our brief also countered arguments made by the healthcare system and its amici that the First Amendment requires the government to treat all religiously affiliated entities like houses of worship.
The Third Circuit heard oral argument in October 2015. In December 2015, the Third Circuit affirmed the trial court's decision and held that the defendant was not eligible for the church exemption. The Third Circuit later denied the healthcare system's request for rehearing en banc.
In December 2016, the Supreme Court accepted the case and consolidated it with two others that present the same question. In February 2017, we filed an amicus brief in the Supreme Court; we explained that granting the church exemption to St. Peter’s would violate the Establishment Clause. The Court heard oral argument on March 27, 2017.