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November 17, 2023

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Introduction

Individuals often express their religious beliefs by establishing and working for faith-based non-profits. A faith-based organization should therefore have a foundational understanding of the constitutional protections the First Amendment extends to it, particularly as these protections relate to the organization’s religious activity. This whitepaper provides a brief overview of the scope of these protections and offers some guidance for ways an organization can protect itself from and, if necessary, respond to laws and regulations that may infringe on its religious liberty rights.  

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Executive Summary

As a general rule, governmental units, including municipal governments, have long enjoyed the authority to regulate within their borders. This regulation can take several forms:  

1. statutes enacted by the state legislature and signed by the governor of the state, which are applicable throughout the state;  

2. ordinances adopted by a local or municipal government that are only applicable within the jurisdiction of that governing body; and  

3. regulations, which are rules issued by state or local administrative agencies that are not passed by a legislature, but nonetheless have the force of law.¹  

A government’s power to regulate is not unlimited, however, since statutes, ordinances, and regulations within a state must still comply with the state constitution and federal law, including the U.S. Constitution. The First Amendment to the U.S. Constitution is one such constraint on a government’s regulatory power, and it binds government action, whether it be on the federal, state, or local level.² 

While local, state, and federal governments may typically enforce generally applicable laws on religious individuals and organizations, they may not do so in a way that targets religion or treats religious activity more negatively than secular activity. State statutes, local ordinances, or regulations that have either of these effects may violate the First Amendment, and will be struck down unless the government can prove that they further a “compelling governmental interest” and are “narrowly tailored” to advance that interest.³ This standard of proof is very difficult for the government to meet.

There are several preventive steps your organization can take to troubleshoot future conflicts with problematic local laws. These actions start with paying close attention to changes that might be on the horizon and communicating with your local officials. But reviewing your organization’s policies is also a simple and potentially critical measure for ensuring you are not inviting discrimination claims or other legal action.  

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First Amendment Basics

What does the First Amendment protect?

The First Amendment states that “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof . . . .” Together, these clauses generally bar the government from regulating what individuals believe (through compelled prayer, e.g.) as well as how people choose to express those beliefs. While these protections certainly apply to individuals, they also extend to organizations, including faith-based nonprofits and even businesses.⁴  

More specifically, the Supreme Court has held that the First Amendment protects “church autonomy.” This term refers to the freedom of not just houses of worship, but all religious institutions to be free from government interference with their internal affairs. Five areas that the church autonomy doctrine protects are:  

1. The formation and interpretation of religious doctrine;

2. An organization’s choice of polity or governance structure, including its embodiment in the organization’s canons and bylaws;

3. Decisions about the hiring, training, supervision, promotion, or removal of clergy, worship leaders, and other leaders and employees who perform explicitly religious functions;

4. Determinations related to the admission, expulsion, and standing of the organization’s members; and

5. The religious organization’s internal communications pertaining to the full enjoyment of the first four subjects.⁵  

What does the First Amendment permit state and local governments to do?

As a general rule, the U.S. Constitution allows state and local governments to subject religious organizations to legal requirements that are neutral and generally applicable.⁶ Under this standard, restrictions on activity that apply to everyone—such as criminal prohibitions on illegal drug use—are presumptively permissible so long as they do not target religious activity. Similarly, governments can compel activity that is required of everyone—such as paying taxes—without running afoul of these protections.  

While Congress attempted to restrict the scope of governmental authority through the Religious Freedom Restoration Act of 1993 (RFRA), the U.S. Supreme Court has since held that RFRA does not apply to state and local governments.⁷ RFRA continues to restrain action taken by the federal government, however.  

How does the First Amendment restrain state and local government action?

While governments may enforce neutral, generally applicable legal requirements against religious individuals and organizations, they are not permitted to do so in a discriminatory manner. Laws that treat any secular activity more favorably than comparable religious activity are thus likely to violate the First Amendment.⁸ Similarly, governments may not deny religious organizations access to secular aid programs,⁹ or target activity because of its religious nature.¹⁰ 

Additionally, under the church autonomy doctrine, the First Amendment restricts state and local governmental interference with internal religious affairs, as outlined in the previous section.  

In many states, state and local governments are also bound by state RFRA statutes that, like the federal RFRA, provide protections for religious exercise beyond those promised in the U.S. Constitution. In Pennsylvania, for example, individuals, churches, and tax-exempt organizations may challenge even neutral and generally applicable local or state laws that “substantially burden” their religious exercise.¹¹ In Indiana, for-profit businesses may also avail themselves of this safeguard.¹² Alabama has even incorporated similar additional protections in the state Constitution.¹³  

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What Should I Do if an Ordinance Threatens My Religious Liberty?

Preventive Steps

It is within your organization’s best interest to avoid litigation to the greatest extent possible. To that end, there are a number of actions you can take now to prevent a conflict from ever arising.  

• Build Relationships and Communicate with Local Officials. Try to connect with your local officials and ensure they are aware of the good work your organization does. If one of them proposes an idea that would be harmful to your organization, reach out to them directly. Do not assume that your local and state leaders have a thorough grasp of the protections that apply to religious activity in the state. They may genuinely not be aware of the ways in which their proposal violates current law or might adversely impact your organization and others like it. Communicating these contingencies shows you want to avoid a problem, and it might even help you stop unconstitutional regulations before they start.  
• Stay Informed. Be attuned to changes that your government officials may be considering. Regulating activity popular with religious groups is usually controversial, and you may be able to prevent such proposals from advancing if you can react in a timely manner. Getting the word out through local news and social media about the role your organization plays in the community can go a long way towards cautioning government action that might adversely impact those services. Raising public awareness about how such changes might affect your organization and partnering with similarly-situated groups to dissuade officials from problematic proposals might also be helpful to this end.  
• Review Your Policies. An increasing number of cities have passed anti-discrimination laws that often prohibit discrimination based on an individual’s sexual orientation or gender identity, which may require religious organizations to take actions contrary to their mission. If your organization has conduct expectations, ensure they apply to everyone and only to activity in which everyone can engage. In addition, review your organization’s protocol to make sure your policies are being enforced against everyone. When applicable, make the religious basis for your policies clear. References to instructive sources (Holy Scripture, the Catechism of the Catholic Church, canon law, etc.) can be good means for grounding your policies in the religious beliefs that drive your organization.  
• Employment Contracts. The Supreme Court has recognized a “ministerial exception” that protects religious institutions, including religious non-profits, from certain employment discrimination claims by employees who have religious duties, even if they are not ordained clergy. Make it clear in your job descriptions and employment contracts when the particular duties, qualifications, and exceptions for a role are such that the role itself is “ministerial” (even if not referred to as such). For example, at many faith-based organizations, all employees (not just pastors or clergy) may be called upon to lead the community in prayer. To learn more about how to establish these protections for your organization, please see Napa Legal’s resources on the ministerial exception.  

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Legal Action

When preventive measures have failed to avert a problem, legal action may be unavoidable. From the moment you receive notification of a potential legal violation, engage counsel as soon as possible. There may still be ways to resolve the problem short of litigation, and your lawyer will be best positioned to pursue that goal. In the meantime, keep a record of all of your communications with government officials, and try to conduct this communication over email or other written form.  

Local Ordinances and Religious Liberty

Self-Assessment

• Have we identified relevant local officials and established a good relationship with them?
• Have we instituted a direct line of communication to those offices, particularly those offices that might not share in our mission or beliefs?
• Are we taking advantage of opportunities to explain the good we do and the services we provide to the community?
• Are we working to stay informed about changes in the law that might affect our organization?  
• Have we reviewed our organization’s policies to help avoid conflict where possible, especially as they apply to our employment practices? For example:
• Have we identified applicable religious exemptions and documented the basis for our eligibility?  
• Does our employment handbook express to our staff the organization’s religious commitment and identity?  
• Do our employment agreements indicate our religious identity and clearly communicate expectations for our staff?  
• Do our job descriptions appropriately and expressly define the connection between each role and the religious mission of our organization?
• To avoid misunderstandings, when appropriate, do employment documents (such as job descriptions) communicate to job applicants and staff that the organization may be exempt from certain employment laws and regulations?
• If legal action is imminent, have we retained legal counsel?  
• Do we have a protocol for preserving a record of communication our employees have with government officials?

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¹ To see examples of local and municipal codes, visit Civic Plus’ MuniCode library.  

² Gitlow v. New York, 268 U.S. 652 (1925).

³ See Church of the Lukumi Babalu Aye v. City of Hialeah, 508 U.S. 520 (1993).

⁴ See Burwell v. Hobby Lobby Stores, 573 U.S. 682 (2014).

⁵ Carl H. Esbeck, An Extended Essay on Church Autonomy, 22 The Federalist Society Review  244, 248 (2021).

⁶ Employment Division v. Smith, 494 U.S. 872 (1990).

⁷ City of Boerne v. Flores, 521 U.S. 507 (1997).

⁸ Tandon v. Newsom, 141 S. Ct. 1294 (2021).

⁹ Trinity Lutheran Church of Columbia, Inc. v. Comer, 137 S. Ct. 2012 (2017).

¹⁰ Masterpiece Cakeshop, Ltd. v. Colorado Civil Rights Comm’n, 138 S. Ct. 1719 (2018).

¹¹ 71 Pa. Stat. § 2401-2407 (2002).

¹² Ind. Code § 34-13-9-10(a) (2015).  

¹³ Ala. Const. amend. 622.