Home » Articles » Case » Church Property and Governance » Advocate Health Care Network v. Stapleton (2017)

Written by John R. Vile, last updated on December 2, 2023

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Governments sometimes exempt churches and religiously affiliated groups from regulations in an attempt to avoid the excessive entanglement between church and state against which it has warned in the third prong of the Lemon Test; alternatively, the government might be more trusting of such institution’s willingness to take care of their employees.


Government tried to keep First Amendment separation of church and state in pension law exemptions

Although the Court did not mention either rationale, they were probably a background consideration in the case of Advocate Health Care Network v. Stapleton, 581 U.S. ____ (2017), which chiefly focused on statutory interpretation. The opinion involved a class-action suit brought by employees of three church-affiliated nonprofits who hoped to be covered under the Employee Retirement Income Security Act of 1974 (ERISA) against their employers who argued that they were exempt under existing congressional legislation.


Employees said nonprofits were breaking law

The ERISA obliges most private employers to offer pension plans that adhere to guidelines designed to ensure their solvency and protect participating employees. This law exempts “church plans,” that is, plans “established and maintained . . . for its employees . . . by a church.” In 1980, Congress further adopted a provision that provided that:


“A plan established and maintained for its employees . . . by a church or by a convention or association of churches includes a plan maintained by an organization . . . the principal purpose or function of which is the administration or funding of a plan or program for the provision of retirement benefits or welfare benefits, or both, for the employees of a church or a convention or association of churches, if such organization is controlled by or associated with a church or a convention or association of churches.”


Court said law exempted church-affiliated organizations

In Justice Elena Kagan’s majority decision for the Court, she observed that the federal agencies that enforced ERISA had long exempted hospitals like the ones responding to this case from the law.  She further thought that the 1980 amendment to this law intended to include plans by principal-purpose organizations associated with such churches.  Under this understanding, retirement plans maintained by a principal-purpose organization affiliated with churches are subject to the same exemptions as those run by churches themselves. Kagan argued that this interpretation honored each word of the 1980 amendment. She further disputed a contrary method of interpretation and hypothetical with another that supported her conclusion.


Kagan further argued that, while the evidence was far from conclusive, her interpretation was consistent with what appeared to be the congressional purpose of eliminating “the distinction between churches and church-affiliated organizations under ERISA.” She further tied this to reaction to a decision by the Internal Revenue Service which had questioned whether plans established by orders of Catholic Sisters were really carrying out the church’s religious functions.  Noting that “If that is so, our construction of the text fits Congress’s objective to a T,” she noted that her interpretation would exempt the government from making such determinations.


Justice Sonia Sotomayor wrote a brief concurring opinion. Although she accepted the majority’s construction of the statute, she was “troubled by the outcome” both because she thought that the law provided needed protection to employees and because she feared that this exemption might also be applied to for-profit subsidiaries that “bear little resemblance to those Congress considered when enacting the 1980 amendment to the church plan definition.”


Because this case rests on statutory interpretation, Congress would have power to overturn it simply by revising the wording of the law.


John Vile is professor of political science and dean of the Honors College at Middle Tennessee State University. He is co-editor of the Encyclopedia of the First Amendment. This article was originally published in 2017


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