Vargas: When churches provide public services, they should follow the law

In June, the Supreme Court ruled LGBTQ+ people are protected from discrimination under Title VII of the Civil Rights Act, in a decision that is likely to have dramatic ripple effects for decades to come.

Next month, the Supreme Court will hear arguments in another case that could rip a massive hole in that hard-won victory. The litigants are, once again, asking for the court to create a “religious freedom” exception to anti-discrimination laws.

Fulton v. Philadelphia involves the decision by Philadelphia to end its relationship with Catholic Social Services (CSS) when the city discovered CSS was barring same-sex couples from its foster services in violation of the city’s anti-discrimination law. CSS sued, citing its religious objections to anti-discrimination laws, and demanding to have their contract reinstated. Both the trial court and the Third Circuit Court of Appeals rejected CSS’s claim.

Two years ago, in the landmark case of Masterpiece Cakeshop v. Colorado, the Supreme Court rejected the idea that the First Amendment creates a “religious freedom” exemption. Justice Kennedy, writing for a 7-to-2 majority, wrote “it is a general rule that (religious) objections do not allow business owners … to deny protected persons equal access to goods and services.”

In 2019, however, the court did carve out a very small exception in Our Lady of Guadalupe School v. Morrissey-Berru, which allows religious institutions to discriminate against their own employees (such as teachers).

But can they legally discriminate against their clients? That is the question in Fulton, and it’s not directly covered by either Morrissey-Berru or Masterpiece. If the Supreme Court were to narrowly interpret its own recent decisions, then Fulton should be decided against CSS.

The danger, however, comes if the Supreme Court continues to expand the “religious freedom” exception in Morrissey-Berru. It is one thing for a religious institution to be allowed to discriminate against its own employees. Such discrimination is deeply hurtful and wrong, but if religious institutions can also discriminate against their clients or customers, the universe of potential victims grows exponentially because religious institutions have become a critical part of the social safety net.

The U.S. government gives religious institutions nearly $100 billion each year in subsidies, and since the Clinton Administration blessed public partnerships with “faith-based organizations” (FBOs), governments at all levels have funneled billions more to FBOs in direct payments for providing certain public services. These services include poverty and homelessness programs (including local safe parking programs), as well as assistance for families such as adoption, foster and child care.

However, FBOs also are expanding deep into the healthcare sector. One in six hospitals in the United States is now a Catholic hospital. There is nothing inherently wrong with FBOs taking on these public roles and accepting government money for it. However, it becomes a problem when they refuse to provide certain services to certain people based on their religious objections, which is exactly what is happening.

This has a disproportionate impact on the most vulnerable communities. The LGBTQ+ community, in particular, stands to lose access to critical public resources if discrimination by FBOs is legalized.

For example, the trans community, especially trans youth, are dramatically overrepresented in the homeless population, and yet FBOs control as many as 60% of all available emergency shelter beds in the United States. Not surprisingly many shelters outright refuse to serve trans people, and the Trump Administration already has moved to legalize this discrimination.

Foster care and adoption are two more critical service where discrimination would have a devastating impact. There are more than 400,000 children in the foster care system, and 10% to 30% of them identify as LGBTQ+. Allowing discrimination could effectively abandon those children to homelessness in many cities.

At the same time there are as many as 2 million loving, qualified LGBTQ+ families looking to adopt. Allowing foster care and adoption service providers to arbitrarily deny qualified families is cruel to the hundreds of thousands of children looking for a home and the millions of parents who are ready and willing to provide it.

If the court expands its new “religious freedom” exception, then local leaders will be forced to choose between funding discrimination against their residents and taking these services back from FBOs at tremendous tax payer expense. That’s not fair to anyone, and no one would welcome that result.

Religious institutions that choose to take on a public service should respect the laws and the residents they serve. If a religious institution cannot do that, then a local government should be within its rights to find a service provider that will.

Michael Vargas is a business and securities lawyer and a part-time professor at Santa Clara University Law School. Vargas also chairs the American Bar Association’s committee on Business Law Education and serves on the executive board of the Santa Clara County Democratic Party, and on the boards of BAYMEC and the Rainbow Chamber of Commerce.