his 2008 presidential campaign, then-candidate Barack Obama said that
he intended to overturn President George W. Bush’s policy of allowing
faith-based groups that receive federal funding to consider a potential
employee’s religion when making hiring decisions. Although a 1972 civil
rights law generally exempts religious groups from the prohibition on
religious discrimination in hiring, it remains unclear whether this
exemption applies when a religious group receives federal funds. The
Bush administration, which expanded the flow of federal aid to
religious social-service providers, contended that religious groups
always have the right to hire on the basis of religion – even when they
receive federal funding. But President Obama has suggested that he
disagrees with this policy. To explore how the Obama administration
might alter Bush’s policy, the Pew Forum turns to church-state scholar
Ira “Chip” Lupu.
Recently, there has been some controversy over whether
religious groups that receive federal funds for providing social
services, such as job training or drug treatment counseling, should be
allowed to take into account a potential employee's religion when
making hiring decisions. Why is faith-based hiring so controversial?
I think this issue has been controversial because it raises a direct
conflict between two opposing viewpoints on church-state relations. One
viewpoint is that hiring on the basis of religion is discriminatory and
that the government should never subsidize such discrimination. The
opposing viewpoint, held by many faith-based groups, is that to
maintain the distinctive character and nature of their respective
religious missions, these groups must take religion into account when
What about faith-based hiring by a religious group that does not receive federal funding? Is that legally permissible?
Yes, that is clearly permissible. Although Title VII
of the Civil Rights Act, which was passed by the U.S. Congress in 1964,
prohibits private employers from, among other things, hiring employees
based on their religion, there has always been an exception for
religious groups that want to hire based on religion. The original
exception, enacted in 1964, applied only to jobs of "religious
significance." But the question quickly arose: Which jobs were
religiously significant? While it was clear that a clergy position was
religiously significant, it was not clear whether a position such as a
parochial school math teacher also was religiously significant.
After much litigation over which jobs were indeed religiously
significant, it became clear to Congress that this exception was too
vague. So in 1972, Congress amended the exception, expanding it to
allow religious groups to engage in faith-based hiring for any job, including those that many would consider religiously insignificant.
This 1972 amendment, however, does not mention whether this rule
still applies when religious groups receive federal funding. So while
it's been clear for the past 37 years that religious groups that don't
receive federal money may hire based on religion, it still is not clear
whether that right extends to religious groups that do receive federal
How does a religious group become eligible to receive a federal grant for providing social services?
Within the federal government there are 26 grant-making agencies
that issue federal grants to groups for the purpose of carrying out a
function specified by Congress. For example, the Department of Health
and Human Services awards grants to private groups that further the
agency's mission of providing essential human services to needy
families. To receive a grant from one of these grant-making agencies, a
group must compete with other groups to establish its superior ability
to carry out a particular function. Congress often sets conditions on
such grants, but it's the federal agencies that decide which groups
will receive them.
What has been the federal government's policy on whether
religious groups that receive federal funding may hire on the basis of
There are three critical periods in the federal government's
changing policy on this issue: between 1972 and 1996, between 1996 and
2001, and between 2001 and today.
When Congress passed the 1972 amendment allowing religious groups to
engage in faith-based hiring, it did not mention whether this amendment
applied to religious groups receiving federal funding. It wasn't an
issue at the time because the U.S. Supreme Court's interpretation of
the Establishment Clause in the First Amendment to the U.S.
Constitution was that "pervasively sectarian" religious groups, such as
houses of worship, could not directly receive government funding.
Although religiously affiliated philanthropic groups, such as Catholic
Charities, were allowed to receive direct funding, faith-based hiring
was not a major issue because these groups weren't hiring on the basis
of faith, or if they were, the government wasn't monitoring their
faith-based hiring practices.
In the late 1990s, however, there was a movement toward greater
church-state partnerships. This prompted Congress to introduce a Charitable Choice provision
into the 1996 welfare reform act. This Charitable Choice provision
authorized the Department of Health and Human Services to award grants
to religious groups, including houses of worship, that provided social
services for needy families. In 1998 and 2000, Congress enacted similar
Charitable Choice provisions that sought to allow religious groups to
receive federal grants for providing various social services.
These Charitable Choice provisions expressly said that receiving
Charitable Choice grants would not affect a religious organization's
Title VII exemption. It remained unclear, however, whether the
Charitable Choice provisions required federal agencies to award grants to religious groups without regard to their faith-based hiring.
The Clinton administration did not take a position on this issue
because it was understood at the time that the Establishment Clause
prevented intensely religious groups from directly receiving federal
funding. As a result, very few such groups were applying for or
receiving federal grants through Charitable Choice.
But in 2000, in Mitchell v. Helms,
the Supreme Court interpreted the meaning of the Establishment Clause
to allow the government to fund all religious groups directly as long
as there was some assurance that the groups would use the money only
for secular programs. So when George W. Bush entered office in 2001,
Establishment Clause law allowed religious groups to receive federal
grants. Responding to this change in Establishment Clause law, Bush
expanded on the Charitable Choice provisions by creating the White
House Office of Faith-Based and Community Initiatives, which sought to
remove all obstacles that congressional statutes and agency regulations
had placed on religious groups seeking federal grants.
As a result, more religious groups began applying for and receiving
federal funding, which opened up the whole question of whether a
religious group receiving federal funding could take religion into
account in hiring decisions. So, unlike the Clinton administration, the
Bush administration very quickly had to take a position on this issue.
And its position was that religious groups may always engage in
faith-based hiring, even if they receive federal funding.
How did the Bush administration implement this policy?
The Bush administration implemented this policy in several ways.
First, it declared that the federal government's general policy on
church-state issues was to create a "level playing field" for religious
and secular groups alike. According to the administration, this level
playing field guaranteed that religious groups could engage in
faith-based hiring while receiving federal funding because prohibiting
religious groups from engaging in such hiring would require these
groups to surrender their religious character if they wanted to compete
for federal grants.
Second, in January 2001, within a week of taking office, Bush issued
several executive orders (presidential directives on how federal
agencies should enforce federal laws) that mandated that all federal
grant-making agencies review their rules and remove any regulations
that unnecessarily prevented religious groups from participating in
federally funded social service programs.
Third, in December 2002, Bush issued an executive order, called the
Equal Protection of the Laws for Faith-Based and Community
Organizations, which explicitly amended a 1965 executive order that had
prohibited the government from contracting with groups that considered
religion when making hiring decisions. The 2002 executive order stated
that the 1965 order did not apply to religious groups.
Fourth, the Bush administration argued against the legality of
federal statutes that prohibited all grant recipients from taking
religion into account when hiring employees. A number of federal
statutes contain such provisions; for example, the Workforce Investment
Act provides that if a group receives federal aid to provide job
training, the group must not engage in faith-based hiring. Because
Congress had enacted these prohibitions as part of a statute, the Bush
administration could not simply override them through executive orders,
which have the power to change administrative regulations but not
statutes passed by Congress.
So in 2007, the Bush administration's Office of Legal Counsel (OLC)
in the Department of Justice, which advises the president and federal
agencies on how to enforce federal laws, prepared a memo arguing that these federal statutes prohibiting faith-based hiring could not be applied to religious groups because of the Religious Freedom Restoration Act (RFRA),
a 1993 congressional statute that prohibits the federal government from
placing "substantial burdens" on religious groups and practices.
What was the OLC's legal argument for why applying these statutes to religious groups would violate RFRA?
Under RFRA, when a federal law imposes a "substantial burden" on a
religious activity, the government must exempt from that law any group
or person suffering from that burden unless the government has a
"compelling interest" for not extending the exemption. The OLC
contended that prohibiting religious grant recipients from engaging in
faith-based hiring imposed a substantial burden on these groups and
that the government lacked any compelling interest for placing such a
burden on these groups. The thrust of the argument was that these grant
conditions create a catch-22: On the one hand, the religious groups may
engage in faith-based hiring but not receive federal funding, in which
case it would be difficult for some groups to provide needed services;
on the other hand, religious groups may receive federal funding but
only if they cease faith-based hiring, in which case it would be
difficult for some religious groups to maintain their religious
character and mission.
This was a novel argument because the conventional understanding of
RFRA's "substantial burden" language was that such burdens arise only
from government coercion, such as when the government makes it a crime
to engage in a religious act. There was no legal precedent that held
that a substantial burden can arise from restrictions on the use of
Has any court ever considered this argument that applying the grant conditions to religious groups violates RFRA?
No, the question has not arisen because the only way a group would
have legal standing (the right to sue) would be if the government
denied a group a grant but told the group that it would have received
the grant if it had not engaged in faith-based hiring. The Bush
administration had no interest in denying a grant on this basis, so
that issue has not arisen yet. But this scenario might well arise if
the Obama administration were to start denying grants to otherwise
qualified religious groups that take religion into account when hiring
What steps might President Obama take to establish a policy requiring that the federal government not fund religious groups engaging in faith-based hiring?
Federal grants are generally governed by three different sets of
conditions related to faith-based hiring, so the Obama administration
would have to address each set of grant conditions.
First, there are grants for which Congress has specifically
prohibited faith-based hiring in the grant language. As I mentioned
earlier, in 2007 the Bush administration's Office of Legal Counsel
wrote a memo arguing that applying such grant conditions to religious
groups would violate RFRA. If, as is expected, the Obama
administration's OLC lawyers reject the 2007 memo, then the Obama
administration could conclude that RFRA does not, in fact, exempt any
religious groups from grant conditions prohibiting faith-based hiring.
The Obama administration could then put in place its own policies
affirming that all grant recipients must comply with the governing
congressional conditions on hiring practices. So, for example, the
Obama administration could simply affirm that the Workforce Investment
Act, and other laws that specifically prohibit grant recipients from
engaging in faith-based hiring, will govern all groups, religious or
secular, that receive funding under these acts.
But in the unlikely event that the OLC affirms the 2007 memo and
agrees that applying the grant conditions to religious groups would
violate RFRA, it would be very difficult for the Obama administration
to change this policy. In that case, the administration would have to
convince Congress either to amend RFRA so that it would allow these
grant conditions to apply to religious groups, or to amend the grant
statutes themselves so that they would expressly trump RFRA. Congress
has been in a stalemate over this hiring issue for a long time, so
getting Congress to take action on either option could prove difficult.
Second, there are grants for which Congress has neither prohibited
nor authorized religious groups to engage in faith-based hiring. Some
grants simply don't mention this issue; for example, many overseas
grants do not specify whether religious grant recipients may hire on
the basis of religion. The administration could issue executive orders
telling the relevant agencies to create regulations that prohibit all
recipients from engaging in faith-based hiring. Although revising
regulations in this way would take time, the Obama administration would
clearly have the authority to fill in the holes where Congress has been
silent on the issue.
The third, and most difficult, set of cases for the Obama
administration would be those grants governed by the Charitable Choice
provisions, because these provisions expressly affirm that religious
groups maintain their Title VII exemptions even when they receive
The most straightforward option for the administration would be to
convince Congress to do one of two things: repeal the Charitable Choice
provisions, or pass new legislation explicitly prohibiting all groups
that receive federal funding from engaging in faith-based hiring. As I
just mentioned, Congress has been in a stalemate over this issue for
quite some time and is unlikely to pass such legislation.
A more legally controversial option, which would not involve
Congress, would be for the Obama administration to declare that the
only prohibition related to faith-based hiring practices contained in
the Charitable Choice provisions is that the government may not
initiate Title VII legal proceedings against religious groups that
receive Charitable Choice grants and engage in faith-based hiring.
Since denying a group grant funding is not a Title VII issue, the
administration could argue that Charitable Choice allows the
administration to refuse to issue grants to groups that hire on the
basis of faith.
If the administration refused to fund some religious groups
on this basis, might the excluded groups sue the government, claiming
that it had violated Charitable Choice?
Yes, that's certainly a possibility. The excluded groups might argue
that the purpose of Charitable Choice is to create a level playing
field between religious and secular groups and that this exclusion
would expressly undermine that purpose by making it more difficult for
religious groups to compete for federal funding. Moreover, the excluded
group might argue that by expressly affirming their Title VII
exemptions, Charitable Choice guaranteed that religious grant
recipients may receive federal funding while maintaining their
religious identities, which includes the right to receive federal
grants without regard to whether they engage in faith-based hiring.
And how might the Obama administration respond to these legal arguments?
In response, the Obama administration would likely argue that it had
complied with Charitable Choice because its exclusion of these
religious groups had not deprived them of their Title VII exemptions;
these groups could still hire on the basis of faith without fear of
being sued under Title VII. They simply could not engage in faith-based
hiring while receiving a federal grant.
Do you think such a case would go all the way up to the Supreme Court?
This is the type of case that the court may not want to get involved
in too quickly. In cases involving interpretations of statutes, the
court tends not to get involved until a conflict arises between or
among the various circuit courts. But if such a conflict did arise,
then I think the Supreme Court might take the case because it is of
such great policy importance.
And how do you think the high court would rule?
Predicting Supreme Court decisions is always a risky endeavor, and
predicting a ruling on this hypothetical case would be especially
challenging because the legal issues are difficult. This difficulty
lies in the ambiguity of the Charitable Choice language, which, as I
mentioned earlier, says that religious grant recipients maintain their
Title VII exemptions but doesn't clearly say whether the government must issue grants to groups without considering whether the groups hire on the basis of faith.
The court could interpret the Charitable Choice provisions broadly
to mean that because they extend the Title VII exemption to religious
grant recipients, the purpose of these provisions is to protect a
religious grant recipient's religious identity, thus barring the
government from denying one of these groups a grant simply because the
group engages in faith-based hiring. But the court could also interpret
the provisions narrowly to mean that while neither the government nor
private victims of religious discrimination may initiate legal
proceedings under Title VII against a religious group for engaging in
faith-based hiring, the government still has the discretion not to
subsidize faith-based hiring by giving these groups federal funding. I
think there are reasonable arguments on both sides.
This transcript has been edited for clarity, spelling and grammar.