NLRB’s new jurisdictional test limits labor law’s reach over religious institutions

Since the Supreme Court’s decision in NLRB v. Catholic Bishop of Chicago, 440 U.S. 490 (1979), courts and the National Labor Relations Board (“Board”) have applied different tests to determine whether a religiously-affiliated institution has a “substantial religious character,” and is therefore outside the Board’s jurisdiction. By declining jurisdiction, the Board avoids a constitutional clash with the First Amendment’s religion clauses.

In its recent decision—Bethany College, 369 NLRB No. 98 (2020)—the Board adopted the “substantial religious character” test formulated by the United States Court of Appeals for the District of Columbia Circuit in University of Great Falls v. NLRB, 278 F.3d 1335 (D.C. Cir. 2002). Under the Great Falls tests, the Board does not exercise jurisdiction over faculty at an institution that:

1. hold itself out to students, faculty, and the community as providing a religious educational environment,
2. is organized as a nonprofit, and
3. is affiliated with, or owned, operated, or controlled, directly or indirectly, by a recognized religious organization, or with an entity, membership of which is determined, at least in part, with reference to religion.

Prior to Bethany College, the Board’s test from Pacific Lutheran University, 361 NLRB 1404 (2014) considered whether the institution “holds out the petitioned-for faculty members themselves as performing a specific role in creating or maintaining the college or university’s religious educational environment. For this analysis the Board would look to the institution’s representation to current or potential students and faculty members, and the community at large. Bethany College overruled Pacific Lutheran.

The newly adopted Great Falls test removes the inquiry into the nature of the institutions’ activities or those of its faculty members. For example, applying the Great Falls’ test to the facts, the Board focused on:

1. the objectives of the institution listed in the handbook, which stated that the “object and purpose of this Corporation shall be to establish and maintain a Christian institution of higher education to be known as ‘Bethany College’; to serve Jesus Christ and his church by training men and women who seek a liberal arts education under Christian auspices;”
2. the job postings, which listed that the college had a mission to “educate, develop, and challenge individuals to reach for truth and excellence as they lead lives of faith, learning, and service;”
3. the fact that the institution was established as a 501(c)(3) nonprofit institution; and
4. that the institution was owned and operated by Central States Synod and the Arkansas/Oklahoma Synod of the Evangelical Lutheran Church in America. Id.

Based on these factors, the Board found that it did not have jurisdiction over the institution. Id.

By adopting the Great Falls test, the Board’s focus will shift to the makeup of the employing institution as opposed to the specific duties of its individual faculty members. The fact that faculty members do not perform religious instruction will not be a basis on which to extend them protection under the National Labor Relations Act. The Board’s explanation was straightforward: “We recognize that the Board has an important mission to protect employees’ rights set forth in the National Labor Relations Act, but those rights are subordinate to those enshrined in the Constitution where there is a potential conflict between the two.”  Slip Op. at p. 4.