Garcia v. Salvation Army

• Citation: 918 F.3d 997
• Decision Date: 18 March 2019
• Docket Number: No. 16-16827,16-16827
• Parties: Ann GARCIA, Plaintiff-Appellant, v. SALVATION ARMY, Defendant-Appellee.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

918 F.3d 997

Ann GARCIA, Plaintiff-Appellant,

v.SALVATION ARMY, Defendant-Appellee.

No. 16-16827

United States Court of Appeals, Ninth Circuit.

Argued and Submitted November 13, 2018 San Francisco, California

Filed March 18, 2019

Menno Goedman (argued), Boies Schiller Flexner LLP, Washington, D.C.; Kathleen Hartnett, Boies Schiller Flexner LLP, Palo Alto, California; for Plaintiff-Appellant.

R. Shawn Oller (argued) and Ryan G. Lockner, Littler Mendelson, P.C., Phoenix, Arizona; for Defendant-Appellee.

Before: Mary M. Schroeder and Paul J. Watford, Circuit Judges, and Edward R. Korman,^* District Judge.

KORMAN, District Judge:

The Salvation Army is an evangelical ministry founded in 1865 by William Booth, a former Methodist minister.¹ The Salvation Army's religious tenets differed from traditional Methodism in rejecting the importance of sacraments and emphasizing strong central governance.² To that end, Booth—"General" of the Salvation Army—adopted the military-style hierarchy of the British Army³ under which ranked officers were the equivalent of ministers.⁴ In keeping with Protestantism's nineteenth century "camp revival," Booth took his ministry to the streets⁵ and began establishing mission centers catering to London's poor.⁶

What started as a single ministry in the East End of London spread to the shores of the United States in 1880⁷ and now operates in more than 80 countries through 16,000 evangelical centers and 3,000 social welfare institutions worldwide.⁸ The Salvation Army describes itself as "an evangelical part of the universal Christian church," whose professed mission is "to preach the gospel of Jesus Christ and to meet human needs in His name without discrimination." Here in the United States, the Salvation Army operates through 501(c)(3) nonprofit corporations.⁹ In 2012 and 2013, direct public donations made up the lion's share of the Salvation Army's total revenue; sales to the public comprised fifteen percent.

Ann Garcia's relationship with the Salvation Army dates to 1999, when she began attending religious services at the Estrella Mountain Corps in Avondale, Arizona. In 2002, the Corps hired Garcia to work as an assistant to the pastor, a position she held until July 2010, when Arlene and Dionisio Torres became the new pastors. No longer in need of an assistant, Arlene Torres reassigned Garcia to the position of social services coordinator in January 2011. In that role, Garcia aided clients under the supervision of Arlene Torres. In late 2011, Garcia and her husband "left the Church" and stopped attending the Salvation Army's religious services, but Garcia continued her work as social services coordinator. Afterward, her relationship with Torres began to deteriorate.

Tensions reached new heights in July 2013, when a client filed a lengthy complaint letter against Garcia, claiming that she "refused to provide help to [the client's] family." After Torres informed Garcia that a complaint had been lodged, Garcia demanded to see it. Torres refused, claiming that the complaint was confidential. Three days later, Garcia filed an internal grievance of her own against Torres, claiming that she "fe[lt] discriminated against and excluded and isolated" at work ever since leaving the church. The specter of the undisclosed client grievance continued to disturb Garcia. She would go on to submit complaints to the EEOC and Arizona state authorities for religious discrimination and retaliation.

Following a lengthy period of medical leave due to fibromyalgia

, the Salvation Army fired Garcia after she failed to report to work despite being cleared by her doctor. Garcia then filed a second complaint with the EEOC and state authorities alleging that, by declining to disclose the client complaint, the Salvation Army failed to accommodate her disability.

Garcia's EEOC charges were dismissed, and right-to-sue letters issued. Garcia subsequently brought two lawsuits against the Salvation Army: one under Title VII of the Civil Rights Act of 1964 (Title VII), 42 U.S.C. § 2000e, et seq. , and another under the Americans with Disabilities Act (ADA), 42 U.S.C. § 12112, et seq. , which were consolidated. In sum, Garcia alleged that the Salvation Army subjected her to a hostile work environment because she stopped attending religious services and retaliated against her for filing an internal grievance complaining of religion-based mistreatment. The resulting stress precipitated health problems that the Salvation Army failed to accommodate.

The district judge (Campbell, J. ) granted summary judgment to the Salvation Army, holding that Title VII's religious organization exemption (ROE) protects the Salvation Army from suit, even if it failed to timely assert the defense. Garcia v. Salvation Army , 2016 WL 4732845, at *4 (D. Ariz. Sept. 12, 2016). He reasoned that the ROE is jurisdictional—a matter of courts' Article III power to hear cases and controversies—and cannot be forfeited. Id. The district judge also dismissed Garcia's ADA claims on the merits. Id. at *5–6.

Garcia appeals, raising two legal questions regarding the application and scope of the ROE. First , whether the ROE is jurisdictional, depriving federal courts of subject matter jurisdiction when invoked. And second , whether the ROE extends beyond hiring and firing decisions to hostile work environment and retaliation claims. She also challenges the district judge's dismissal of her ADA claims (to which the ROE does not apply). We first address the application of the ROE before turning to the merits of the ADA claim.

DISCUSSION

Title VII Claims

A. The ROE Applies to the Salvation Army

The ROE provides that Title VII's protections against discrimination

shall not apply to an employer with respect to ... a religious corporation, association, educational institution, or society with respect to the employment of individuals of a particular religion to perform work connected with the carrying on by such corporation, association, educational institution, or society of its activities.

42 U.S.C. § 2000e-1(a). The entity seeking the benefit of the statute bears the burden of proving it is exempt. EEOC v. Kamehameha Schs./Bishop Estate , 990 F.2d 458, 460 (9th Cir. 1993).

In applying the ROE, we determine whether an institution's "purpose and character are primarily religious" by weighing "[a]ll significant religious and secular characteristics." EEOC v. Townley Eng'g & Mfg. Co. , 859 F.2d 610, 618 (9th Cir. 1988). It does not suffice that an institution be "merely ‘affiliated’ with a religious organization." Id. at 617. Although we construe the ROE narrowly, often the organization seeking the exemption is "clearly" religious. Id. at 618.

This is such a case. See, e.g. , Rev. Rul. 59-129, 1959-1 C.B. 58 (noting that the Salvation Army is a "church" under the Internal Revenue Code); Schleicher v. Salvation Army , 518 F.3d 472, 478 (7th Cir. 2008) ("The Salvation Army, which has existed in the United States since 1880, is acknowledged to be a completely legitimate church ...."); McClure v. Salvation Army , 460 F.2d 553, 554 (5th Cir. 1972) ("The Salvation Army is a church ...."). The Salvation Army holds regular religious services. It offers social services to customers regardless of their religion "to reach new populations and spread the gospel." Indeed, the Salvation Army's mission statement describes it as

an evangelical part of the universal Christian church. Its message is based on the Bible. Its ministry is motivated by the love of God. Its mission is to preach the gospel of Jesus Christ and to meet human needs in His name without discrimination.¹⁰

The record establishes that, as a church, the Salvation Army is "clearly" religious. See Townley , 859 F.2d at 618 ("[T]he central function of [the ROE] has been to exempt churches, synagogues, and the like, and organizations closely affiliated with those entities."). Accord Lown v. Salvation Army, Inc. , 393 F.Supp.2d 223, 246–54 (S.D.N.Y. 2005) (applying ROE to the Salvation Army); Clark v. Salvation Army, LLC , 2008 WL 11375384, at *1–2 (N.D. Ala. June 16, 2008) (same).

Garcia argues that the Salvation Army does not qualify for the ROE because it does not satisfy the fourth factor of a four-part test discussed in Spencer v. World Vision, Inc. , 633 F.3d 723, 724 (9th Cir. 2011) (per curiam), which asks whether an entity "engage[s] primarily or substantially in the exchange of goods or services for money beyond nominal amounts." Garcia contends this factor is not satisfied because the Salvation Army generates a large-dollar amount of sales revenue, even though that amount constitutes a small portion (fifteen percent) of its total income. Moreover, in 2012, 82 cents of every dollar spent by the Salvation Army went toward its program services. These considerations aside, the concurring opinions of Judges O'Scannlain and Kleinfeld, who wrote separately on how to evaluate the fourth Spencer factor, support the Salvation Army's entitlement to ROE protection. Under Judge O'Scannlain's approach, the ROE applies if the first three factors identified in the per curiam opinion are satisfied and the organization is a nonprofit. Spencer , 633 F.3d at 734 (O'Scannlain, J., concurring). The Salvation Army easily satisfies that test. While Judge Kleinfeld would alternatively ask how the organization charges for its services, he cites the Salvation Army as a group that satisfies this criterion because it "gives its homeless shelter and soup kitchen services away, or charges nominal fees." Id. at 747 (Kleinfeld, J., concurring).

B. The ROE Reaches Claims for Retaliation and Hostile Work Environment

Even assuming the ROE applies to the Salvation Army, Garcia argues that it does not reach her claims for retaliation and hostile work environment. In her view, the ROE applies only to hiring and firing decisions. Although we have not addressed this question, other courts have held that the ROE extends to both retaliation and hostile work environment claims....