Court Applies Sidley Austin Brown & Wood LLP "Litmus Test"
To Rule In Favor Of Catholic University
Are religious-based schools, hospitals, broadcasters and other sectarian not-for-profits under the jurisdiction of the National Labor Relations Board in having to submit to union representation?
Based on a new, simple test devised by Sidley Austin Brown & Wood LLP and adopted by the U.S. Court of Appeals in rendering a decision in The University of Great Falls v. The NLRB, the answer is decidedly not, provided such an entity holds itself out to the public as a religious institution.
The 3-0 decision, handed down on February 12, overturns an earlier finding by the NLRB that the private Catholic university in Great Falls, Montana had violated the National Labor Relations Act by refusing to accept the Montana Federation of Teachers as the collective bargaining agent for the university's faculty and other staff. The NLRB had refused Great Falls' exemption, arguing that the school was not of "substantial religious character" and therefore did not qualify for a federal exemption from certain labor laws that are granted to such religious schools.
However, in filing an amicus brief on behalf of other religious institutions, Sidley Austin Brown & Wood LLP offered a simple, three-pronged test for the court to determine whether the institution was entitled to an exemption. According to the test, for an institution to be considered of substantial religious character it must hold itself out to the public as a religious institution, must be religiously affiliated, and must be a non-profit organization. All three criteria were met by the University of Great Falls.
"This decision provides a necessary safe-harbor exemption for legitimate religious institutions so that the government and the NLRB do not interfere with their day-to-day operations, especially with respect to employment and labor policies," said Gene C. Schaerr, the Washington, DC partner for Sidley Austin Brown & Wood LLP who argued the case on behalf of the university.
Because the court applied the U.S. Supreme Court's jurisprudence in a previous landmark case, NLRB v. Catholic Bishop of Chicago, and also applied the new set of standards to determine that Great Falls was exempt, the court denied the NLRB cross-petition for enforcement.
"This case sets a gold standard for how religious institutions will be measured in order to operate in accordance with their own beliefs, while also complying with labor laws," said Jeffrey Berman, a Los Angeles partner with Sidley Austin Brown & Wood LLP and labor law specialist. Mr. Berman and Mr. Schaerr have one of the few religious institution practices among major U.S. law firms.
Sidley Austin Brown & Wood LLP (www.sidley.com) is one of the world's largest full-service law firms, with some 1,420 lawyers practicing on three continents (North America, Europe and Asia). The firm, which has a major appellate and Supreme Court practice based in Washington, DC, provides integrated services to meet the needs of both large and small businesses as well as governments, institutions, associations, foundations, professional firms and individuals.