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CHRISTIAN FOR PROFITS: UNDERSTANDING PUBLIC ACCOMMODATION LAWS’ IMPACT ON CHRISTIAN BUSINESS OWNERS

By David Hyams, Esq. and H. Robert Showers, Esq.

“Fascists!”…“Bigots!”…“Theocracy!!”

 

The blood-curdling screams against humble florists and bakers seem almost comical, but the crushing fines and social stigma imposed on these small business owners are no laughing matter. Now, public accommodation laws are being employed to shut Christian businesses down so we need to know how to manage the risks and respond to situations as they arise.

Previously, we discussed some legal strategies Christian business owners can employ to integrate their “sincerely held religious beliefs” regarding work with how they structure and operate their for-profit business. For example, there are specific exemptions to the employment discrimination laws (i.e. Religious Corporation, Bona Fide Occupational Qualifications (BFOQ) and Religious Freedom Restoration Act (RFRA)) that may apply to your specific situation, and which we discuss in the longer memo on this subject that can be purchased by contacting our firm. Faithfully implementing all the recommended tips and tactics should not only assist the Christian entrepreneur in living a more integrated life, but will also provide potentially valuable legal defenses in the event of litigation.

However, operating a business on the basis of one’s sincerely held religious beliefs is not without its risks. In recent years, legal headlines have often featured stories of Christian business owners who have declined to use their artistic talents in a manner that would violate their consciences. See, e.g., Elane Photography, LLC v. Willock, 309 P.3d 53 (N.M. 2013) (wedding photographer); State v. Arlene’s Flowers, Inc., 389 P. 3d 543 (Wash. 2017) (florist); Craig v. Masterpiece Cakeshop, Inc., 370 P.3d 272 (Colo. App. 2015),  cert. granted sub nom. Masterpiece Cakeshop, Ltd. v. Colo. Civil Rights Comm’n, ___ U.S.L.W. ___ (U.S. June 26, 2017) (No. 16-111) (baker). Typically, these cases have arisen in the context of same-sex weddings, but not exclusively. The plaintiffs’ suits generally allege violations of state public accommodation laws, which prohibit denying people the full and equal enjoyment of the goods, services, facilities, privileges, advantages, or accommodations of a place of public accommodation on the basis of certain protected classes (e.g., disability, race, creed, color, sex, marital status, national origin, or ancestry). Many states have amended their public accommodations statutes to include sexual orientation and gender identity as protected classes.

What, exactly, is a “public accommodation”? While some states exempt churches, synagogues, mosques, or other places that are principally used for religious purposes, see, e.g., Colo. Rev. Stat. § 24-34-601(1), “public accommodation” is generally defined so sweepingly so as to effectively include all businesses. For instance, in Colorado, the following institutions are considered public accommodations:

[A]ny place of business engaged in any sales to the public and any place offering services, facilities, privileges, advantages, or accommodations to the public, including but not limited to any business offering wholesale or retail sales to the public; any place to eat, drink, sleep, or rest, or any combination thereof; any sporting or recreational area and facility; any public transportation facility; a barber shop, bathhouse, swimming pool, bath, steam or massage parlor, gymnasium, or other establishment conducted to serve the health, appearance, or physical condition of a person; a campsite or trailer camp; a dispensary, clinic, hospital, convalescent home, or other institution for the sick, ailing, aged, or infirm; a mortuary, undertaking parlor, or cemetery; an educational institution; or any public building, park, arena, theater, hall, auditorium, museum, library, exhibit, or public facility of any kind whether indoor or outdoor.   C.R.S. § 24-34-601(1)

In the public accommodation cases concerning Christian business owners, courts have been unpersuaded by the proprietor’s willingness to serve homosexuals in any capacity short of one that forces the owner to use her expressive talents to communicate a message that violates her sincerely-held religious beliefs. The courts see no meaningful distinction between choosing to not participate in a ceremony primarily engaged in by homosexuals, and refusing to serve homosexuals themselves, because of their sexual orientation. The courts have justified government-compelled expression in the name of ending discrimination, and any imposition upon conscience rights is, in the words of the New Mexico Supreme Court, “the price of citizenship.” Elane Photography, LLC v. Willock, 309 P.3d 53, 80 (N.M. 2013) (J. Bosson, concurring).

Not all of the public accommodation cases have come out against the Christian business owners, however. In Lexington Fayette Urban County Human Rights Comm’n v. Hands on Originals, Inc., No. 2015-CA-00745-MR (Ky. Ct. App. May 12, 2017), a Kentucky t-shirt printer refused to print t-shirts for a “gay pride” event. The potential customer sued under Kentucky’s public accommodations statute. The Kentucky Court of Appeals found that the owner did not engage in unlawful discrimination, for there was no evidence demonstrating that Hands On Originals “refused any individual the full and equal enjoyment of the goods, services, facilities, privileges, advantages, and accommodations it offered to everyone else because the individual in question had a specific sexual orientation or gender identity.”  Id. at *16.

In Amy Lynn Photography Studio, LLC v. City of Madison, No. 2017-CV-000555 (Wis. Cir. Ct. Aug. 11, 2017), a Christian photographer, Amy Lawson, filed a pre-enforcement challenge to Wisconsin’s public accommodations law that conceivably dictated the types of weddings her internet-based business must photograph. There, the court avoided any discussion of the First Amendment and instead held that, because Ms. Lawson’s business did not qualify under Wisconsin case law’s requirement that a public accommodation be a “physical place” of business open to the public, the statute did not apply to her business. While a victory of sorts, this is probably not a viable solution in most jurisdictions or for most businesses, and only begs the ultimate questions at stake.

Much-needed clarity on the intersection between religious liberty and sexual autonomy should be forthcoming, as the United States Supreme Court agreed to hear the case of Jack Phillips, proprietor of Masterpiece Cakeshop, where it will decide the question of “[w]hether applying Colorado’s public accommodations law to compel Phillips to create expression that violates his sincerely held religious beliefs about marriage violates the Free Speech or Free Exercise Clauses of the First Amendment.”

In the Masterpiece Cakeshop case, Mr. Phillips was approached by two men who wanted him to make a cake celebrating their same-sex wedding which was to be held in Massachusetts (at the time, same-sex marriage was illegal in Colorado). Mr. Phillips politely declined on the basis that doing so would violate his religious beliefs, and referred them to another business that could furnish their cake. The men filed a charge of sexual orientation discrimination with the Colorado Civil Rights Commission. Mr. Phillips lost his case before the administrative court and the Colorado Court of Appeals, and has ceased providing wedding cakes altogether, as the agency had ordered him to provide cakes for all ceremonies or none at all. His revenue has suffered, as wedding cakes comprised his most profitable menu offering, and he has endured the most vile and hateful rhetoric imaginable, including being labeled a “bigot” and “Nazi.”

RFRA-Emerging in the wake of the landmark Supreme Court ruling of Burwell v. Hobby Lobby, 134 S.Ct. 2751 (2014), this exemption portends the next great legal battle between sexual autonomy and religious liberty.

In Hobby Lobby, the Supreme Court was asked to determine whether the Religious Freedom and Restoration Act (“RFRA”) protected closely-held for-profit corporations from being forced by the government to provide contraceptives to their employees that violated the religious convictions of the employer.  The Court ultimately held that RFRA does provide such protection, but in so holding, the Court had to resolve whether a corporation had any religious free-exercise rights and whether a corporation’s for-profit status made a difference. As to the former, the Court held that RFRA protects the free-exercise rights of “persons,” and a corporation is a “person” under the Dictionary Act. 134 S.Ct. at 2769. “A corporation is simply a form of organization used by human beings to achieve desired ends . . . . When rights, whether constitutional or statutory, are extended to corporations, the purpose is to protect the rights of these people.” Id. at 2768. Accordingly, “protecting the free-exercise rights of corporations like Hobby Lobby . . . protects the religious liberty of the humans who own and control those companies.” Thus, the Court found RFRA’s protections extend to corporations.

As for the corporation’s for-profit status, the Court held corporations can pursue any lawful purpose, “including the pursuit of profit in conformity with the owners’ religious principles.” Id. at 2771.  Thus, the Court found RFRA protects the free-exercise rights of for-profit corporations.  The Court further clarified that only closely-held companies are within the ambit of its opinion, not publicly traded corporations.  Id. at 2774.

While Hobby Lobby was not a “Title VII case” per se, Title VII was not far from the Court’s mind. In fact, on the way to the Supreme Court, the religious corporation exemption was discussed frequently by courts, for the government was arguing that, because courts analyzing the religious corporation exemption considered an employer’s non-profit status to be a relevant factor, Congress intended to limit RFRA to non-profit corporations. The Seventh Circuit did not pay this argument much heed, describing the factors articulated in Townley and LeBoon as “a handful of lower-court decisions applying an interpretive gloss to Title VII’s religious-employer exemption.” Korte v. Sebelius, 735 F.3d 654, 675 (7th Cir. 2013).

There is dicta in the Hobby Lobby decision, however, that renders the religious corporation exemption for for-profit businesses suspect at this point. The government and Justice Ginsburg in her dissent argued that the U.S. “lacks a tradition of exempting for-profit corporations from generally applicable laws. By contrast, [the government] contends, statutes like Title VII, 42 U.S.C. § 2000e-19(A), expressly exempt churches and other nonprofit religious institutions but not for-profit corporations.” Id. at 2773.  Justice Alito, writing for the majority of the Court, disagreed, citing to statutes which do, in fact, exempt for-profit corporations, but, in a troubling bit of dicta, stated: “If Title VII and similar laws show anything, it is that Congress speaks with specificity when it intends a religious accommodation not to extend to for-profit corporations.” Id. at 2774. In other words, because Congress exempted “religious corporations,” but not “for-profit corporations” from Title VII, the religious corporation exemption may not encompass for-profit corporations.

Moreover, in light of Hobby Lobby, at least one court has allowed a for-profit business to assert RFRA as a defense to Title VII.  EEOC v. R.G. & G.R. Harris Funeral Homes, Inc., No. 14-cv-13710 (E.D. Mich. Aug. 18, 2016).  In this case, a closely-held, for-profit corporation funeral home did not avail itself of the religious corporation exemption, but merely asserted RFRA as a defense to the EEOC’s Title VII claim for sex discrimination on the basis of the employer’s gender-specific dress code where the complainant former employee was transitioning from male to female and was fired because he intended to dress as a woman at work. Although the funeral home was not affiliated with any church, its articles of incorporation did not avow any religious purpose, its employees were not required to hold any religious views, it served clients of any religious persuasion, and it employed people of various faiths, the court nonetheless found that the dress code comported with the owner, Mr. Thomas Rost’s, sincerely-held religious beliefs; Mr. Rost was a committed Christian who was very involved in his church and other religious organizations; the funeral home’s website and published mission statement contained theological and scriptural language; Christian literature was placed throughout the funeral home; that Mr. Rost sincerely believed that he was called to minister to the grieving and that a person’s sex is an immutable God-given gift; that he would be violating God’s commands if he permitted a male employee to dress as a female while at work; and that if he were forced to violate his sincerely-held religious beliefs by permitting his employees to dress inconsistently with their biological sex, he would feel pressure to sell the business and give up his calling of ministering to the grieving as a funeral home director and owner. See id. at *7, 15-17.

Citing Hobby Lobby’s holding that a for-profit corporation is considered a “person” for purposes of RFRA, the court held that, “The Funeral Home, a for-profit, closely-held corporation, is therefore entitled to protection under RFRA.”  Id. at *29.  The court further held that, as a governmental agency, RFRA applied to the EEOC.  Id.[1]  Given that the Funeral Home would face severe economic consequences, Mr. Rost believed he would be violating God’s commands, and Mr. Rost would feel forced to sell his business, “the Funeral Home met its burden of showing that enforcement of Title VII, and the body of sex-stereotyping case law that has developed under it, would impose a substantial burden on the ability of the Funeral Home to conduct business in accordance with its sincerely-held religious beliefs.” Id. at 32.

The court proceeded in its RFRA analysis to assume, without deciding, that the EEOC demonstrated a compelling government interest in protecting employees from gender stereotyping in the workplace.  Id. at 36.  However, the court held the EEOC did not meet its burden to show that the substantial burden it was placing on the Funeral Home was the least restrictive means of achieving its goal.  The EEOC did not propose a gender-neutral dress code be applied to all employees, but was seeking to force the Funeral Home to allow the claimant to express his perceived gender identity by wearing stereotypical female clothing.  Accordingly, the court found the Funeral Home was “entitled to a RFRA exemption from Title VII, and the body of sex-stereotyping case law that has developed under it, under the facts and circumstances of this unique case.” Id. at 44 (emphasis added).[2]

A RFRA defense to Title VII discrimination claims will be hotly contested whenever and wherever asserted. Whenever possible, a Christian business should employ the RFRA exemption, for “RFRA protects religious liberty more broadly than the religious-employer exemptions in Title VII and the ADA.” Korte, 735 F.3d at 676.  As with all RFRA claims, however, its success will be determined on a case-by-case basis.

In the coming years, one hopes that the Supreme Court will fashion a remedy that permits business owners such as Jack Phillips to operate their businesses consistent with their sincerely-held religious beliefs. Moreover, we hope that the Court will recognize that religious corporations do exist as “person” under the law and if they show ‘sincerely held religious beliefs” they should be exempt or protect by RFRA or other First amendment protections. If, however, the Court holds that the state has the power to force its citizens to engage in speech and religious activities they find abhorrent and sacrilegious, Christians may feel compelled to re-evaluate the manner in which they engage the marketplace. In the meantime, Christian business owners should be cautious in making any drastic alterations as to how they conduct business until the Court issues its opinion.

Disclaimer: This memorandum is provided for general information purposes only and is not a substitute for legal advice particular to your situation. No recipients of this memo should act or refrain from acting solely on the basis of this memorandum without seeking professional legal counsel. Simms Showers LLP expressly disclaims all liability relating to actions taken or not taken based solely on the content of this memorandum.  Please contact Robert Showers at hrs@simmsshowerslaw.com or David Hyams at dmh@simmsshowerslaw.com  for specific legal advice on your Christian business, or brh@simmsshowerslaw.com to order the expanded legal memo with various options for protective language for $25 and/or to retain Simms Showers law firm for specific legal advice tailored to your greater needs concerning which risk management strategy that is best for your business or organization.

[1] Note, there is a circuit split on whether RFRA applies in suits involving only private parties, see Sara Lunsford Kohn, Religious Freedom in Private Lawsuits: Untangling When RFRA Applies to Suits Involving only Private Parties, 10 Cardozo Pub. L., Policy & Ethics J. 43 (2011) (describing circuit split and analyzing relevant cases). Thus, depending on the jurisdiction, RFRA may only be a viable defense in those cases where the EEOC is the plaintiff, not the individual claimant. The Second, Eighth, and D.C. Circuits have held RFRA applies to suits between private parties, while the Fifth, Sixth, and Seventh have held otherwise.

[2] As of the writing of this memo, this case is on appeal to the 6th Circuit Court of Appeals.

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