141 F.3d 344 (D.C. Cir. 1998), 97-1116, Lutheran Church-Missouri Synod v. F.C.C.

Docket Nº:97-1116.
Citation:141 F.3d 344
Party Name:LUTHERAN CHURCH-MISSOURI SYNOD, Appellant v. FEDERAL COMMUNICATIONS COMMISSION, Appellee Missouri State Conference of Branches of the NAACP, et al., Intervenors
Case Date:April 14, 1998
Court:United States Courts of Appeals, Court of Appeals for the District of Columbia Circuit
 
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141 F.3d 344 (D.C. Cir. 1998)

LUTHERAN CHURCH-MISSOURI SYNOD, Appellant

v.

FEDERAL COMMUNICATIONS COMMISSION, Appellee

Missouri State Conference of Branches of the NAACP, et al.,

Intervenors

No. 97-1116.

United States Court of Appeals, District of Columbia Circuit

April 14, 1998

Argued Jan. 12, 1998.

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Appeal of an Order of the Federal Communications Commission.

Barry H. Gottfried argued the cause for appellant, with whom Richard R. Zaragoza, Kathryn R. Schmeltzer, and Gene C. Schaerr were on the briefs.

Daniel M. Armstrong, Associate General Counsel, Federal Communications Commission, argued the cause for appellee, with whom Christopher J. Wright, General Counsel, C. Grey Pash, Jr., and David Silberman, Counsel, were on the brief. Robert B. Nicholson, Attorney, United States Department of Justice, entered an appearance.

David E. Honig was on the brief for intervenors Missouri State Conference of Branches of the NAACP, et al.

Lisa Wilson Edwards, Attorney, United States Department of Justice, was on the brief for the United States as amicus curiae.

Michael E. Rosman was on the brief for amici curiae Center for Individual Rights and National Religious Broadcasters. Michael P. McDonald, Daniel E. Troy, and Lawrence W. Secrest, III entered appearances.

Jay A. Sekulow, Mark N. Troobnick, and Colby M. May were on the brief for amicus curiae American Center for Law and Justice.

Before: SILBERMAN, WILLIAMS, and SENTELLE, Circuit Judges.

Opinion for the Court filed by Circuit Judge SILBERMAN.

SILBERMAN, Circuit Judge:

Lutheran Church-Missouri Synod appeals the Federal Communication Commission's

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finding that it transgressed equal employment opportunity regulations through the use of religious hiring preferences and inadequate minority recruiting. The Church argues that the Commission has violated both its religious freedoms and the equal protection component of the Fifth Amendment and that the Commission unreasonably imposed a $25,000 lack of candor forfeiture. We reverse and remand in part.

I.

Appellant holds licenses for two radio stations in Clayton, Missouri. KFUO(AM), which operates noncommercially, maintains a religious format; KFUO-FM operates commercially and broadcasts classical music with a religious orientation as well as some religious programming. Both stations are housed on the campus of the Church's Concordia Seminary and, as appellant puts it, "have been dedicated to the task of carrying out in their way the Great Commission which Christ gave to His Church, to preach the Gospel to every creature and to nurture and serve the people in a variety of ways." Because of the stations' religious mission, the Church believes that many, if not most, of the positions at the station require a knowledge of Lutheran doctrine.

The Commission has adopted equal employment opportunity (EEO) regulations that impose two basic obligations on radio stations. Stations are forbidden to discriminate in employment against any person "because of race, color, religion, national origin, or sex." 47 C.F.R. § 73.2080(a) (1997). And stations must adopt an affirmative action "EEO program" targeted to minorities and women. 47 C.F.R. § 73.2080(b) & (c) (1997). Such a program must include a plan for (1) disseminating the equal opportunity program to job applicants and employees; (2) using minority and women-specific recruiting sources; (3) evaluating the station's employment profile and job turnover against the availability of minorities and women in its recruitment area; (4) offering promotions to minorities and women in a nondiscriminatory fashion; and (5) analyzing its efforts to recruit, hire, and promote minorities and women. 47 C.F.R. § 73.2080(c).

After receiving the Church's 1989 licensing renewal applications, Commission staff asked for more information about its affirmative action efforts during the preceding license term. A month later, the NAACP filed a petition to deny the applications, contending that the Church's EEO program was deficient and that it had hired an inadequate number of blacks. 1 The Church responded that it did have minority employees, including blacks, and that it did in fact engage in minority-specific recruitment. But it offered two primary explanations for its relatively low number of minority hires and allegedly inadequate recruiting efforts.

First, the Church claimed that its hiring criteria of "knowledge of Lutheran doctrine" and "classical music training" narrowed the local pool of available minorities. Although minorities comprised 15.6% (14.1% black, .8% Hispanic, .5% Asian-Pacific Islander and .2% American Indian) of the St. Louis Missouri-Illinois Metropolitan Statistical Area (MSA), the Church estimated that only 2% of the area population were minorities with Lutheran training and 0.1% were minorities with classical music training. The Church's counsel, Arnold & Porter, derived the 0.1% figure from KFUO-FM's (which was the only full-time classical music station in the area) listenership

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surveys. Of KFUO-FM's 72,800 listeners, 3.7%--or 2,693--were black, and none were Hispanic or Asian. This represents approximately 0.1% of the population in the St. Louis MSA. And counsel noted that the number of minorities with classical music expertise--as opposed to simply interest--would be even lower. Relying on a Commission policy statement that "the Commission will, in its in-depth reviews, take cognizance of a licensee's inability to employ women or minorities in positions for which the licensee documents that only a very limited number of women or minority groups have the requisite skills," 2 the Church asserted that the NAACP's numbers did not translate into evidence of discriminatory hiring or recruiting.

Second, the Church explained that for many job openings, it did not engage in any outside recruiting, largely because it drew many of its employees from Concordia Seminary. Historically, the stations had an informal agreement with the Seminary whereby the stations operated rent-free in return for hiring seminarians and their spouses when possible. Because the Church thought radio important in its mission and ministry, it viewed working at the stations as part of the seminarians' overall education. 3 These explanations, however, did not satisfy the Commission and they further upset the NAACP, who thought that the station's estimates of minorities with classical music expertise reinforced negative stereotypes of blacks. Seeking more details about the extent of the Church's affirmative action recruiting efforts and the potentially adverse impact of its hiring criteria on blacks, the Commission designated the Church's applications for hearing.

The Commission determined that the Church's Lutheran hiring preference was too broad. In re The Lutheran Church/Missouri Synod, 12 F.C.C.R. 2152 (1997) (Lutheran Church ). FCC policy exempts religious broadcasters from the ban on religious discrimination, but only when hiring employees who are reasonably connected to the espousal of religious philosophy over the air. King's Garden, Inc., 38 F.C.C.2d 339 (1972), aff'd sub nom. King's Garden, Inc. v. FCC, 498 F.2d 51 (D.C.Cir.1974). After questioning the Church about the duties attached to various positions, the Commission found it unnecessary for receptionists, secretaries, engineers, and business managers to have knowledge of Lutheran doctrine.

The FCC also found that the Church violated the EEO regulations by making insufficient efforts to recruit minorities. In measuring compliance, the ALJ, with subsequent approval by the Commission, divided the license term into two time periods to take account of a shift in FCC policy. Until August 3, 1987, the Commission used purely result-oriented processing standards and automatically reviewed a station's compliance if its minority and female representation was less than 50% of their "overall availability" in the area labor force. 4 A workforce with minority representation matching 100% of overall availability is referred to by the Commission and the ALJ as "parity," a term which reflects the FCC's perception that proportional representation is the norm. To assess the Church's compliance from February 1, 1983 to August 3, 1987, the ALJ relied primarily on labor force statistics. He found that while the Church slipped below 50% of parity during 1983, 1984, 1986, and 1987, it achieved nearly 100% of parity in 1985 and was close enough, on balance, to pass muster. In re The Lutheran Church/Missouri Synod, 10 F.C.C.R. 9911 (1995) (Initial Decision ).

Analyzing the remaining two and a half years, the ALJ relied on the Commission's newer enforcement policy that purports to de-emphasize statistics and look more at a station's overall EEO efforts. 5 With 9.1% full-time minority hires, the Church exceeded

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the Commission's 50% of parity guideline during this period. It failed, however, to utilize a formal EEO process: it did not include an EEO notice on its employment application, regularly solicit applicants from minority-specific sources, or instruct any management level employee to implement a structured EEO program. Moreover, the ALJ found no evidence that the Church had ever "formally evaluated [its] employment profile and job turnover against the availability of minorities and women in [its] recruitment area." Initial Decision, 10 F.C.C.R. at 9912. He observed that although KFUO-FM's general manager decided in 1987 to increase the number of minorities, he waited nearly a year before hiring a Hispanic salesperson. And, importantly for the ALJ, "[t]here [was] no indication that [the general manager's] desire to hire minorities, or that [this woman's] hire in particular, resulted from the type of evaluation...

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