On January 25, 2011, the Ninth Circuit denied rehearing en banc and issued an amended opinion (per curiam) in Spencer v. World Vision, Inc., No. 08-35532. The amended opinion indicates that Spencer will not be permitted to file any subsequent petitions for rehearing or rehearing en banc.
As you may remember, World Vision, Inc. terminated a number of employees after learning that they did not subscribe to certain Christian tenants. The employees filed a religious discrimination lawsuit under Title VII. World Vision moved for summary judgment based on the religious exemption from Title VII. The District Court granted summary judgment, and the Ninth Circuit affirmed this decision on August 23, 2010.
The amended per curiam opinion presents a succinct summary of the test adopted by the Ninth Circuit to determine exemption from Title VII for certain religious organizations. The opinion enunciates a four-part test, as follows: (1) the entity is organized for a religious purpose; (2) the entity is engaged primarily in carrying out that religious purpose; (3) the entity holds itself out to the public as an organization carrying out that religious purpose; and (4) the entity does not engage primarily or substantially in the exchange of goods or services for monetary gain, beyond nominal amounts. This test is consistent with Judge Kleinfeld’s Concurrence. While the first three factors are also set forth in Judge O’Scannlain’s Concurrence, he believes the fourth prong should entail whether the entity is a non-profit organization. Judge Kleinfeld disagrees with a non-profit requirement, explaining that some congregations may retain employees without utilizing any corporate apparatus.
The decisions of Judges O’Scannlain, Kleinfeld and Berzon remain substantively unchanged. The amended opinion essentially provides clarification on the applicable test in light of the three differing underlying opinions. The narrower, more exclusive test, which is the analysis described by Judge Kleinfeld, controls. With this guidance, religious entities will be better able to assess their obligations, or lack thereof, under Title VII.