The ERISA Church Plan Exception: Why the Lown Test is Improperly Narrow
The ERISA Church Plan Exception: Why the Lown Test is Improperly Narrow
Suzanne K. Skinner, 10 U. Pa. J. Bus. & Emp. L. 741 (2008)
Some commentators have suggested that exempting religious organizations from legal requirements that apply to other secular organizations is bad public policy and arguably unconstitutional. For example, in October 2006 the New York Times published a series of articles about the fact that religious organizations are exempt from laws that prohibit employment discrimination, and protect an employee’s right to join a union. Some have suggested that courts have been overly protective of religious rights at the expense of important human rights. In at least one area of the law, however, courts have been less protective of religious organizations than Congress intended. Courts have failed to give effect to a portion of statutory language that exempts employee benefit plans sponsored by churches from complying with the Employee Retirement Income Security Act (ERISA) In 2006, for example, the Eighth Circuit found that Baptist Health, a hospital, was neither controlled by, nor associated with a church and thus did not qualify for the ERISA church plan exception. Had the court considered the entirety of the statutory language, rather than just apply a more narrow test sponsored by the Fourth Circuit, it likely would have held that Baptist Health qualified for the exception.
Part I of this Comment generally discusses the ERISA church plan exception, and how it has been interpreted by the Department of Labor. Part II discusses the judicial interpretation of the exception, and demonstrates how courts are not giving full effect to the statutory language.