Limits On Religious Staffing If Government Funds Are Involved

Despite a common misconception, there is no general legal or constitutional rule that faith-based organizations lose their freedom to hire on a religious basis as soon as they receive any government money. In fact, the general rule or the principle is the reverse:  faith-based organizations do not lose the religious staffing freedom—except when the particular government funds are governed specifically by a rule that limits or forbids religious staffing by faith-based organizations.

This important principle—that the religious staffing freedom of faith-based organizations is restricted only by specific government rules, and not by the mere fact of receiving government funds—was reaffirmed in 2005 in a major court case, Lown v. The Salvation Army. The federal court upheld the freedom of the Salvation Army in New York City to take account of religion in its employment decisions, even though almost all of the money for its social service programs came from government (see commentary, Oct. 17, 2005). 

However, some federal social-service programs, some states, and some large cities do forbid religious staffing by organizations that receive funds from these sources. In such instances the restriction is applied by specific language in the federal program law, or the state’s law governing procurement (purchase) of social services, or the municipal procurement ordinance. Here, where the restriction is specifically applied to all organizations receiving the government funds, faith-based organizations that receive these funds are bound to abide by the restriction, unless there is also some countervailing law or constitutional rule.

A limited number of federal social-service programs, such as Head Start and job-related programs funded under the Workforce Investment Act, require all grantees to agree not to use religion (among other criteria) in selecting employees. This restriction accompanies these federal funds and applies to all recipients—even when the faith-based organization receives the money not from the federal government but from a state or local agency. Faith-based organizations must look carefully at the conditions that accompany government funds to see whether or not religious staffing is restricted.

Note that a faith-based organization may be able to appeal to the Religious Freedom Restoration Act (RFRA) against such a federal restriction on religious staffing.  For details, read how to appeal to RFRA against federal restrictions on religious staffing.

When the restriction is due to state or local law, then RFRA, which applies only to federal law, is not a remedy. However, there may be other remedies. For details, read about limits on religious staffing at the state and local level.