Silo v. CHW Medical Foundation

• Decision Date: 16 May 2002
• Docket Number: No. S095918.,S095918.
• Citation: 45 P.3d 1162,119 Cal.Rptr.2d 698,27 Cal.4th 1097
• Court: California Supreme Court
• Parties: Terence SILO, Plaintiff and Respondent, v. CHW MEDICAL FOUNDATION et al., Defendants and Appellants.

119 Cal.Rptr.2d 698

27 Cal.4th 1097

45 P.3d 1162

Terence SILO, Plaintiff and Respondent, v. CHW MEDICAL FOUNDATION et al., Defendants and Appellants.

No. S095918.

Supreme Court of California.

May 16, 2002.

Fole-v Lardner Weissburg & Aronson, Foley & Lardner, Stephen W. Parrish and John H. Douglas, San Francisco, for Defendants and Appellants.

Sidley Austin Brown & Wood, Jeffrey A. Berman, James M. Harris, Los Angeles, Gene C. Schaerr and Nicholas Miller for General Conference of Seventh-day Adventists, The Church of Jesus Christ of Latter-day Saints, American Baptist Churches in the USA, Clifton Kirkpatrick, as Stated Clerk of the General Assembly of the Presbyterian Church (U.S.A.), the Worldwide Church of God, The First Church of

Christ, Scientist, California Catholic Conference, Loma Linda University & Medical Center, Adventist Health, Association of Christian Schools International and the Christian Legal Society as Amici Curiae on behalf of Defendants and Appellants.

Alan J. Reinach, Westlake Village; Alan E. Brownstein; David Lewellyn; Bassi, Martini & Blum and Fred Blum for the California Coalition for the Free Exercise of Religion as Amicus Curiae on behalf of Defendants and Appellants.

Law Offices of Steven Drapkin and Steven Drapkin, Los Angeles, for Council on Religious Freedom as Amicus Curiae on behalf of Defendants and Appellants.

Matheny Poidmore Linkert & Sears, Matheny, Sears, Linkert & Long, Eric R. Wiesel, Amanda C. Raffanti and Anthony J. Poidmore, Sacramento, for Plaintiff and Respondent.

MORENO, J.

In this case, we consider whether a Catholic hospital exempt from the Fair Employment and Housing Act (the FEHA), Government Code section 12900 et seq.,¹ because it is "a religious corporation ... not organized for private profit" (§ 12926, subd. (d)) and therefore not an "employer" within the meaning of the FEHA, may nonetheless be liable for terminating an employee in violation of public policy (see Tameny v. Atlantic Richfield Co. (1980) 27 Cal.3d 167, 164 Cal.Rptr. 839, 610 P.2d 1330). The public policy at issue prohibits religious discrimination. Specifically, we address whether terminating an employee of a religiously affiliated health care organization for using what it considers objectionable religious speech in the workplace constitutes a form of religious discrimination that violates a fundamental public policy. We conclude that a religious organization may not be held liable under these circumstances. Although there is a clear, constitutionally based state policy against religious discrimination in employment (Cal. Const., art. I, § 8), there is also a countervailing policy rooted in the free exercise of religion clause of the First Amendment to the United States Constitution, as well as the comparable California constitutional right (Cal. Const., art. I, § 4), that permits religious organizations to define themselves and their religious message. We therefore conclude there is no clear public policy against religious organizations prohibiting what they consider to be inappropriate religious speech in the workplace and therefore no liability in tort for such organizations' termination of an employee who engages in such speech.

I. Statement of Facts

Defendant CHW Medical Foundation (CHWMF) is organized for the delivery of health care services. It was formed as a nonprofit public benefit corporation by three "Sponsoring Congregations" of Roman Catholic religious communities of women: the Sisters of Mercy of Burlingame, the Sisters of Mercy of Auburn and the Sisters of St. Dominic of the Most Holy Rosary of Adrian, Michigan. Its "Sponsoring Congregations" are organized under the auspices of the Roman Catholic Church for the purpose of furthering the church's teachings and faith. Its articles of incorporation require it to conduct its activities "in a manner which is consistent with and supportive of the Mission and Corporate Philosophy" of the Sponsoring Congregations, and "in a manner which conforms to the Ethical and Religious Directives for Catholic Health Facilities as may, from time to time, be approved by the National Conference for Catholic Bishops ...." Its bylaws provide that its activities "shall be carried on subject to the moral and ethical principles of the Roman Catholic Church." Its board of directors, and its officers, must support the Sponsoring Congregations' mission of healing and providing services to the sick and poor in the Catholic moral tradition and must support the Ethical and Religious Directives for Catholic Health Services. CHWMF is exempt from taxation by the State of California as a nonprofit religious or charitable institution (Rev. & Tax.Code, § 23701d), and is exempt from federal taxation as an entity operated by the Roman Catholic Church in the United States. However, CHWMF does not provide services only to patients of the Roman Catholic faith, does not have a chaplaincy or chapel, does not sponsor or conduct religious services, prayer groups or Bible studies on its premises and does not publicly place or display Bibles, crucifixes or any other religious symbols.

CHWMF hired plaintiff Terence Silo in July 1991 to be a file clerk in its Sacramento medical clinic's medical records department. In November of 1992, he experienced a religious conversion in which, as he testified, "I gave my life to Christ, ... my heart was filled with the Holy Spirit, and my life was changed." After this conversion experience, he began to share his experience and his faith with others at his workplace. In January of 1993, Silo met with defendants Mary King, CHWMF's human resources manager, and Ruth Ann Lewis, the manager of the medical records department. He was told of two complaints, one by a fellow employee who reported that he had asked her not to "use the name of God in vain" and the other from a patient who complained that Silo was "preaching" at him or her. He was counseled by King and Lewis that he should not use the word "God ... unless it's off the clock."

Meanwhile Silo was given a less than satisfactory performance evaluation in December 1992. In February 1993 he was told his work was not getting done on time and he was placed on probation, with a warning that he would be discharged if there was no improvement. He was informed on April 23, 1993, that his work performance had improved but that he would continue on probation.

On April 30, 1993, Silo was summoned to another meeting with King and Lewis. They informed him that he was being terminated and gave him a "termination paper" that purported to explain the reasons for his discharge. According to that document, Silo "has been counseled three times previously ... regarding Soul Saving [sic] on clinic premises. On the last occasion, he was told that if this continued he would be terminated." In spite of this warning, the document stated that there were three known incidents in April of 1993 in which he continued to "preach" and "Soul Save." On all three occasions, "he was asked to stop but continued preaching. Three of the employees involved have complained of harassment." The document also recited that Silo was on "probationary status for poor work performance." Silo, in his subsequent testimony, denied harassing the employees in question and insisted that he had not been asked to stop his religious discussions. He also claimed that the April 1993 incidents occurred during his lunch hour, i.e., off the clock.

Silo filed a timely complaint with the California Department of Fair Employment and Housing against his employer and, after receiving a right-to-sue letter, filed suit against CHWMF, King, and Lewis. Silo's complaint alleged six causes of action: employment discrimination in violation of public policy, employment discrimination in violation of the FEHA (§ 12920, subd. (a)), breach of contract, breach of the implied covenant of good faith and fair dealing, intentional infliction of emotional distress, and malicious prosecution based on CHWMF's appeal of Silo's unemployment benefits. Defendants successfully demurred to the cause of action for intentional infliction of emotional distress. CHWMF moved for summary adjudication on all remaining causes of action except those based on contract. King and Lewis moved for summary judgment on the employment discrimination claim under the FEHA, the only remaining cause of action in which they were named as defendants. Defendants sought summary judgment on the FEHA cause of action, contending that CHWMF, as a nonprofit religious corporation, was exempt from the FEHA as a matter of law and therefore King and Lewis were not acting as agents of an entity subject to the FEHA. They argued the first cause of action must fail because there was no clear public policy against a religious employer engaging in religious discrimination.

The court denied the motion for summary judgment on the ground that CHWMF was organized under California law as a nonprofit public benefit corporation, not a nonprofit religious corporation and it was therefore unclear whether the FEHA exemption found in section 12926, subdivision (d) applied, leaving a material issue of fact as to whether CHWMF's purposes and functions were essentially religious.

The case was tried before a jury. By special verdict, the jury found that defendants unlawfully discriminated against Silo based on his religious beliefs and practices in violation of the FEHA and that they terminated his employment in violation of public policy. The jury found no breach of contract and no breach of the implied covenant of good faith and fair dealing. The jury awarded Silo $6,305 in economic damages and $1 in noneconomic damages. The court subsequently awarded Silo $155,245.75 in attorney fees pursuant to Code of Civil Procedure section 1021.5.

The Court of Appeal originally affirmed the judgment, holding that CHWMF was in fact an "employer" under the FEHA. We granted review and eventually retransferred the case to ...