Limits on the Religious Staffing Freedom at the State and Local Level
Some states, but not others, and many large municipalities, but not all, require all organizations that receive funds from them (that is, grants, contracts, etc.) to agree not to use religion (along with other criteria such as race and age) in their employment decisions. Such a procurement law restriction applies not only to state and local funds but also federal funds that flow first to a state or local agency before being awarded to private organizations. That is an important reality because most federal social service funds (80-90%) go first to state or local governments before being distributed to private providers. State and local governments are permitted to add a procurement restriction on religious staffing before awarding the funds, even when the funds originated with the federal government and include no such federal restriction.
These state and local procurement restrictions apply to a faith-based organization if it receives government funds from such state or local agencies, even when the funds originally came from the federal government. Organizations should look not only at federal rules but also at the procurement requirements that exist in their state and locality.
Overriding State and Local Procurement Restrictions
In the special case of funds subject to a state or local procurement restriction on religious staffing that came from the federal government in a program governed by Charitable Choice (TANF funds, CSBG funds, SAMHSA drug treatment and prevention funds), then the state or local restriction is preempted or set aside by the federal Charitable Choice rules. Charitable Choice is designed to enable faith-based organizations to collaborate with the government without having to diminish their religious character as a condition of collaboration. (For more on Charitable Choice, see Church-State Standards.)
A state or local agency may dispute this preemption effect of Charitable Choice. If so, the faith-based organization may need to seek the assistance of the Center for Faith-Based and Community Initiatives at the U.S. Department of Health and Human Services. The organization may also need to obtain the help of a lawyer familiar with employment law and the standards of the faith-based initiative.
For a detailed discussion of Charitable Choice’s preemption of state and local restrictions on religious staffing, see Carl H. Esbeck, Stanley W. Carlson-Thies, and Ronald J. Sider, The Freedom of Faith-Based Organizations to Staff on a Religious Basis (Center for Public Justice, 2004), pp. 58-64. Download a free copy of this book below (PDF).
The Equal Treatment regulations, which govern federal money not covered by Charitable Choice—that is, most federal funds for social services—do not preempt state and local restrictions on religious staffing nor do they override federal program restrictions on religious staffing. (For more on Equal Treatment, see Church-State Standards.)
However, a faith-based organization faced with a ban on religious staffing that accompanies funds governed by Equal Treatment regulations may still have recourse. Remind the officials that the purpose of the Equal Treatment regulations is to preserve the religious character and governance of a faith-based organization that receives government funds—and point out that the restriction on religious staffing will harm both. Or appeal to the state constitution’s or the federal constitution’s protection of religious freedom. In either strategy, the faith-based organization may need the assistance of a lawyer well versed in constitutional law and in employment law. For further discussion, see The Freedom of Faith-Based Organizations to Staff on a Religious Basis, referenced above.
Federal Contracting for Goods and Services
By executive order 13279 (Dec. 12, 2002), President Bush amended an earlier executive order that prohibited religious staffing by faith-based organizations that contract with the federal government to provide services such as research or products to the federal government. This allows faith-based organizations, such as religious universities, faith-based research institutes, and faith-based think tanks, to compete to provide research, advice, and consulting to federal agencies without loss of their religious staffing freedom. This change in federal policy does not apply to federal funds used to provide social services.
