Church School Has Right to Discriminate

Montrose Christian School Corp., a church-run school, was permitted to discharge employees on the basis that they were not members of the church, the Court of Appeals held last month.

The top court left most of Montgomery County’s anti-discrimination ordinance intact as applied to religious organizations. However, one section was found to be unconstitutional: a provision that limits the exemption for religious organizations to employees hired “to perform purely religious functions.” That provision was severable from the law as a whole, the court found.

Montrose Christian School Corp. is a private, religious school affiliated with the Montrose Baptist Church in Montgomery County. School enrollment is not limited to church members or Baptists. However, the school board members must belong to the church. The church’s pastor is an “ex officio” school board member and supervises the school principal.

Ray Hope became the new pastor in February 1996. That June, the school promoted Gregory Scheck, formerly vice principal, to principal. Changes soon followed: All school employees who were not members of the church, with the exception of two janitors, were discharged.

Among others, Scheck fired Barbara Anne Carver, Mary Lou Jones, Sharon M. Walsh and E. Poole (collectively the former employees). They filed a complaint with the Montgomery County Human Relations Commission charging employment discrimination based on religious creed in violation of §27-19 of the Montgomery County Code. More than 45 days passed without resolution of the administrative complaint, and action was filed in the circuit court.

The circuit court awarded damages to the former employees. The Court of Appeals reversed and remanded.Constitutional Conflict

Under the Maryland Constitution, “[a] local government ordinance which conflicts with a public general law enacted by the General Assembly is preempted and thus is invalid.” Coalition v. Annapolis Lodge, 333 Md. 359, 635 A.2d 412 (1994).

The school argued that the county’s employment discrimination law, section §27-19, was preempted by state and federal law. Specifically, the county’s code fails to provide the broad exemption from coverage for religious organizations found in state law (Art. 49B, §§14 – 18) or the federal model on which it was based (42 U.S.C. §2000e et seq); see Molesworth v. Brandon, 341 Md. 621, 672 A.2d 608, (1996)

Discrimination by religious organizations on the basis of creed is not covered by state law, but that doesn’t mean it is authorized by the statute. See Annapolis Lodge, 333 Md. at 380, 635 A.2d at 422. The state employment discrimination law simply excludes religious organizations from coverage of the religious creed anti-discrimination provision in the state statute. Instead of constituting an affirmative authorization to discriminate, Art. 49B, §18, merely removes religious organizations from the scope of the state law with regard to religious creed discrimination. Accordingly, there is no conflict between Art. 49B, §18, and §27-19 of the Montgomery County Code.

Section 27-19(a) of the Montgomery County Code makes it unlawful for an employer “to discharge any individual” “because of … religious creed ….” A later subsection, however, contains an exception that allows “religious” organizations to employ persons “of a particular religion” — but only if they are hired “to perform purely religious functions.” Section 27-19(d)(2).

Those last five words of §27-19(d)(2), “to perform purely religious functions,” on their face violate the Free Exercise Clause of the First Amendment and Article 36 of the Maryland Declaration of Rights. However, the limitation is severable from the remaining language of §27-19(d)(2). As a result, the viable portion of §27-19(d)(2) will provide that “it shall not be an unlawful employment practice … [f]or a religious corporation, association, or society to hire and employ employees of a particular religion.” Because the school’s conduct was permitted by the valid portion of the §27-19(d)(2) exception, the judgments below were reversed.Watch Word

The school argued, unsuccessfully, that both the school and Scheck were entitled to the defense of charitable immunity first recognized in Maryland in Perry v. House of Refuge, 63 Md. 20 (1885). In Maryland, charitable immunity is premised on the trust fund theory: because funds of the organization are impressed with a trust for charitable purposes, those funds should not be diverted to pay tort damage awards. See Loeffler v. Sheppard-Pratt Hospital, 130 Md. 265, 100 A. 301 (1917).

However, the immunity applies only to tort actions. Except for wrongful or abusive discharge actions pursuant to Adler v. American Standard Corp., 291 Md. 31, 432 A.2d 464 (1981), actions for damages based on the termination of employment relationships, including those regulated by statutes, ordinarily sound in contract and not in tort. See generally, Montgomery County v. Broadcast Equities, Inc., 360 Md. 438, 758 A.2d 995 (2000); Suburban Hospital v. Dwiggins, 324 Md. 294, 596 A.2d 1069, (1991).

Since the doctrine of charitable immunity applies only in tort actions, and since the case here sounded in contract, the charitable immunity defense was inapplicable.