Religious Liberty and the Christian Business Owner: Legal Challenges and Opportunities

1. Religious Liberty and the Christian Business Owner: Legal Challenges and Opportunities in a Post-Hobby LobbyWorld LEWIS ROCA ROTHGERBER LLP June 25, 2015 David M. Hyams, Esq. Kingdom Way Ministries Ft. Collins, Colorado

2. Where Are We Heading? • Colorado Anti-Discrimination Act (“CADA”) • Evangelism in the workplace • How to "Hobby Lobby-ize" your business • Tithing through your business and bankruptcy • Q & A

3. First Things: Perspective “Our citizenship is in heaven.” (Philippians 3:20)

4. First Things: Hope, not Fear • Christ’s Church is Unstoppable: • And I tell you that you are Peter, and on this rock I will build my church, and the gates of Hades will not overcome it. • Matthew 16:18

5. First Things: Your Work Matters! Jesus Christ calls all his disciples to “ministry,” that is, to service. He himself is the Servant par excellence, and he calls us to be servants too. This much is certain: if we are Christians we must spend our lives in the service of God and man. The only difference between us lies in the nature of the service we are called to render. Some are indeed called to be missionaries, evangelists, or pastors, and others to the great professions of law, education, medicine and the social sciences. But others are called to commerce, to industry and farming, to accountancy and banking, to local government or parliament, and to the mass media, while there are still many women who find their vocation in homemaking and parenthood without pursuing an independent career as well. In all these spheres, and many others besides, it is possible for Christians to interpret their life work Christianly, and to see it neither as a necessary evil (necessary, that is, for survival), nor even as a useful place in which to evangelize or make money for evangelism, but as their Christian vocation, as the way Christ has called them to spend their lives in his service. John Stott, Christian Mission in the Modern World.

6. Anti-Discrimination/Public Accommodations Laws

7. Anti-Discrimination Laws • Title VII (federal) • Applies to employers with 15+ employees • Protected classes: • race, color, religion, sex, national origin, pregnancy. 42 U.S.C. § 2000e • Colorado Anti-Discrimination Act (“CADA”) • Applies to employers with 2+ employees • Protected classes: • race, creed, color, sex, age, national origin, ancestry, disability, religion, sexual orientation. Colo. Rev. Stat. § 24-34-402

8. CADA • Three points of focus: • Employment • Public Accommodations • Advertising

9. CADA (Employment) • Be careful in hiring and job perks! • It shall be a discriminatory or unfair employment practice: • For an employer to refuse to hire, to discharge, to promote or demote, to harass during the course of employment, or to discriminate in matters of compensation, terms, conditions, or privileges of employment against any person otherwise qualified because of disability, race, creed, color, sex, sexual orientation, religion, age, national origin, or ancestry C.R.S. § 24-34-402 (1)(a).

10. CADA (Employment) “Harass” means to create a hostile work environment based upon an individual's race, national origin, sex, sexual orientation, disability, age, or religion. C.R.S. § 24-34-402 (1)(a). Harassment occurs if the discriminatory treatment is severe or pervasive, and has the effect of creating a work environment that is objectively and subjectively hostile, intimidating, or offensive. 3 Colo. Code Regs. § 708-1:85.1(A).

11. CADA (Employment) • Be careful with job postings! • It shall be a discriminatory or unfair employment practice: • For any employer . . . to print or circulate or cause to be printed or circulated any statement, advertisement, or publication, or to use any form of application for employment or membership, or to make any inquiry in connection with prospective employment or membership that expresses, either directly or indirectly, any limitation, specification, or discrimination as to disability, race, creed, color, sex, sexual orientation, religion, age, national origin, or ancestry or intent to make any such limitation, specification, or discrimination, unless based upon a bona fide occupational qualification or required by and given to an agency of government for security reasons. C.R.S. § 24-34-402 (1)(d).

12. CADA – Religious Employer Exception Notwithstanding any other provision of law, this section shall not apply 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.Colo. Rev. Stat. § 24-34-402(6)

13. CADA – An Exception to the Exception? For purposes of this section, “employer” shall not include any religious organization or association, except for any religious organization or association that is supported in whole or in part by money raised by taxation or public borrowing.Colo. Rev. Stat. § 24-34-402(7)

14. Ministerial Exception • Defense to claims arising from church-minister relationship • Exempt from most Non-discrimination Laws • Hosanna-Tabor Evangelical Lutheran Church and School v. EEOC, 132 S. Ct. 694 (2012). • “[A] religious body’s right to self-governance must include the ability to select, and to be selective about, those who will serve as the very ‘embodiment of its message’ and ‘its voice to the faithful.’ A religious body’s control over such ‘employees’ is an essential component of its freedom to speak in its own voice, both to its members and to the outside world.” Id. at 713 (Alito, J., concurring). • Checklist (see me afterwards)

15. CADA – (Public Accommodations) • A place of public accommodation is broadly defined and includes both public property and businesses that are open to the public. • “Place of public accommodation” means any place of business engaged in any sales to the public and any place offering services, facilities, privileges, advantages, or accommodations to the public, including but not limited to any business offering wholesale or retail sales to the public; any place to eat, drink, sleep, or rest, or any combination thereof; any sporting or recreational area and facility; any public transportation facility; a barber shop, bathhouse, swimming pool, bath, steam or massage parlor, gymnasium, or other establishment conducted to serve the health, appearance, or physical condition of a person; a campsite or trailer camp; a dispensary, clinic, hospital, convalescent home, or other institution for the sick, ailing, aged, or infirm; a mortuary, undertaking parlor, or cemetery; an educational institution; or any public building, park, arena, theater, hall, auditorium, museum, library, exhibit, or public facility of any kind whether indoor or outdoor.“Place of public accommodation” shall not include a church, synagogue, mosque, or other place that is principally used for religious purposes. • C.R.S. § 24-34-601(1)

16. CADA – (Public Accommodations) • Discrimination occurs when a person is denied the full enjoyment of a place, including the full enjoyment of goods and services, on the basis of disability, race, creed, color, sex, sexual orientation, marital status, national origin, or ancestry. • It is a discriminatory practice and unlawful for a person, directly or indirectly, to refuse, withhold from, or deny to an individual or a group, because of disability, race, creed, color, sex, sexual orientation, marital status, national origin, or ancestry, the full and equal enjoyment of the goods, services, facilities, privileges, advantages, or accommodations of a place of public accommodation . . . . • C.R.S. § 24-34-601(2)(a)

17. CADA – (Public Accommodations) • Beware of signs limiting service! • It is a discriminatory practice and unlawful for a person, . . . directly or indirectly, to publish, circulate, issue, display, post, or mail any written, electronic, or printed communication, notice, or advertisement that indicates that the full and equal enjoyment of the goods, services, facilities, privileges, advantages, or accommodations of a place of public accommodation will be refused, withheld from, or denied an individual or that an individual's patronage or presence at a place of public accommodation is unwelcome, objectionable, unacceptable, or undesirable because of disability, race, creed, color, sex, sexual orientation, marital status, national origin, or ancestry. C.R.S. § 24-34-601(2)(a)

18. CADA – (Advertising) Discriminatory ads are prohibited No person, being the owner, lessee, proprietor, manager, superintendent, agent, or employee of any place of public accommodation, resort, or amusement, directly or indirectly, by himself or herself or through another person shall publish, issue, circulate, send, distribute, give away, or display in any way, manner, or shape or by any means or method, except as provided in this section, any communication, paper, poster, folder, manuscript, book, pamphlet, writing, print, letter, notice, or advertisement of any kind, nature, or description that is intended or calculated to discriminate or actually discriminates against any disability, race, creed, color, sex, sexual orientation, marital status, national origin, or ancestry or against any of the members thereof in the matter of furnishing or neglecting or refusing to furnish to them or any one of them any lodging, housing, schooling, or tuition or any accommodation, right, privilege, advantage, or convenience offered to or enjoyed by the general public or which states that any of the accommodations, rights, privileges, advantages, or conveniences of any such place of public accommodation, resort, or amusement shall or will be refused, withheld from, or denied to any person or class of persons on account of disability, race, creed, color, sex, sexual orientation, marital status, national origin, or ancestry or that the patronage, custom, presence, frequenting, dwelling, staying, or lodging at such place by any person or class of persons belonging to or purporting to be of any particular disability, race, creed, color, sex, sexual orientation, marital status, national origin, or ancestry is unwelcome or objectionable or not acceptable, desired, or solicited. C.R.S. § 24-34-701

19. The Future of CADA • Testers! • See “Religious Minorities Need Not Apply: Legal Implications of Faith-Based Employment Advertising,” 43 Colorado Lawyer No. 4, April 2014. • But see “Peace at Work: Balancing Religious Exercise Rights of Employers and Employees,” 44 Colo. Law. No. 6, June 2015 (business owners do not surrender their 1st Amendment rights) • HB 1161 • Prohibits any remedy that involuntarily requires speech, an artistic act, or a religious act that involves, whether directly or indirectly, participation in or promotion of an ideology, ceremony, creed, behavior, or other practice with which the violator disagrees. • Assigned to State, Veterans, & Military Affairs Committee . . . And Killed

20. The Future of CADA

21. Evangelism at Work

22. Evangelism at Work • CADA & Title VII • “creed and religion” -- “a religious, moral, or ethical belief which is sincerely held.” • Employer is obligated to make reasonable accommodations to the religious need of employees and prospective employees, where such accommodations can be made without undue hardship on the conduct of the employer's business. • Actual knowledge not necessary (EEOC v. Abercrombie & Fitch) • “Undue hardship” = accommodating that worker’s religious need requires anything more than ordinary administrative costs, diminishes efficiency in other jobs, or impairs workplace safety

23. Evangelism at Work • Hostile Work Environment • Workplace permeated with discriminatory intimidation, ridicule, and insult, sufficiently severe or pervasive to alter the conditions of victim’s employment and create abusive working environment. • Totality of the circumstances: (1) frequency of the discriminatory conduct; (2) severity of the conduct; (3) whether the conduct is physically threatening or humiliating, or a mere offensive utterance; and (4) whether the conduct unreasonably interferes with the employee’s work performance. • Environment must be both subjectively and objectively hostile or abusive. • Subjective: Victim must perceive environment to be abusive; severe emotional distress not necessary • Objective: careful consideration of the social context in which particular behavior occurs and is experienced by its target. Conduct which is considered normal and appropriate in one setting may be deemed abusive or hostile in another. See Ross v. Colo. Dep’t Transp., 2012 WL 5975086 (D. Colo. 2012)

24. Evangelism at Work Illustrative cases Wilson v. U.S. W. Commc'ns, 58 F.3d 1337, 1341 (8th Cir. 1995) (employee’s religious vow to wear graphic anti-abortion button to work considered proselytization not protected by Title VII where button caused disruption and decreased among co-workers, employer attempted accommodations, and proselytizing was not an outward requirement of employee’s faith). E.E.O.C. v. TownleyEng'g & Mfg. Co., 859 F.2d 610, 620 (9th Cir. 1988) (employer violated Title VII by requiring employees to attend weekly devotional services while at work, regardless of their religion, where failure to attend was regarded as the equivalent of not attending work. Despite the weekly devotional services, Gospel tracts in every piece of outgoing mail, print Biblical verses on all company invoices and other business documents, company financial support for various missionary causes and churches, the court held the company was not religious in nature where its core business was producing mining equipment, it was not affiliated with or supported by a church, and its articles of incorporation did not mention any religious purpose or goal.)

25. Evangelism at Work Illustrative cases Ervingtonv. LTD Commodities, LLC, 555 F. App'x 615 (7th Cir. 2014) (no violation of Title VII by discharging employee for distributing tracts where employer was not required to accommodate plaintiff’s religion by permitting her to distribute pamphlets offensive to other employees) Scott v. Montgomery Cnty. Sch. Bd., 963 F. Supp. 2d 544 (W.D. Va. 2013) (Supervisor’s offending conduct in leaving scripture verses where employee and others could see them and inviting middle school library employee to join Bible study group and to attend religious conference was not so sufficiently severe or pervasive to alter conditions of employment and to create an abusive work environment, as required for employee’s Title VII religious harassment claim against school board.)

26. Evangelism at Work Illustrative cases Sprague v. Adventures, Inc., 121 F. App'x 813 (10th Cir. 2005) (Religious comments that supervisor allegedly directed at carpet salesman did not create objectively or subjectively hostile work environment, so as to support Title VII claim, when salesman experienced religious-based comments to which he objected only after his first week of two-week stint in which he worked for supervisor, and it was unclear whether salesman complained to management about supervisor’s religiously-oriented speech until some time after his transfer.) E.E.O.C. v. Preferred Mgmt. Corp., 216 F. Supp. 2d 763 (S.D. Ind. 2002) (denying motion for summary judgment on hostile work environment claim where evidence demonstrated that “religious values, precepts, and practices were constituent elements of the very structure of the organization”: company president openly espoused her religious beliefs, required employees to sign a document supporting the company’s religiously oriented mission statement, and selected employees for management positions on the basis of their religious devotion).

27. Evangelism at Work • Mind your P’s • Place of employment • Policies • Position • Performance reviews • Personal relationship • 1 Peter 3:15: “Always be prepared to give an answer to everyone who asks you to give the reason for the hope that you have. But do this with gentleness and respect.”

28. How to “Hobby Lobby-ize” Your Business

29. The Lawsuit • Burwell v. Hobby Lobby Stores, Inc., 134 S. Ct. 2751 (June 30, 2014) • Key holding: Religious Freedom Restoration Act (“RFRA”) applies to regulations that govern the activities of closely held for-profit corporations • Does not provide a shield for employers who might cloak illegal discrimination as a religious practice.

30. RFRA “Government shall not substantially burden a person's exercise of religion even if the burden results from a rule of general applicability.” § 2000bb–1(a). If the Government substantially burdens a person's exercise of religion, under RFRA that person is entitled to an exemption from the rule unless the Government “demonstrates that application of the burden to the person—(1) is in furtherance of a compelling governmental interest; and (2) is the least restrictive means of furthering that compelling governmental interest.” § 2000bb–1(b).

31. Hobby Lobby A corporation is simply a form of organization used by human beings to achieve desired ends. An established body of law specifies the rights and obligations of the people (including shareholders, officers, and employees) who are associated with a corporation in one way or another. When rights, whether constitutional or statutory, are extended to corporations, the purpose is to protect the rights of these people. For example, extending Fourth Amendment protection to corporations protects the privacy interests of employees and others associated with the company. Protecting corporations from government seizure of their property without just compensation protects all those who have a stake in the corporations' financial well-being. And protecting the free-exercise rights of corporations like Hobby Lobby, Conestoga, and Mardel protects the religious liberty of the humans who own and control those companies.Burwell v. Hobby Lobby Stores, Inc., 134 S. Ct. 2751, 2768 (2014).

32. Hobby Lobby “While it is certainly true that a central objective of for-profit corporations is to make money, modern corporate law does not require for-profit corporations to pursue profit at the expense of everything else, and many do not do so. For-profit corporations, with ownership approval, support a wide variety of charitable causes, and it is not at all uncommon for such corporations to further humanitarian and other altruistic objectives.”Burwell v. Hobby Lobby Stores, Inc., 134 S. Ct. 2751, 2771 (2014).

33. What Worked for Hobby Lobby Closely-held, for-profit corporation. Family members in exclusive control. Statement of purpose commits the Greens to “[h]onoring the Lord in all [they] do by operating the company in a manner consistent with Biblical principles.” Each family member signed a pledge to run the businesses in accordance with the family's religious beliefs and to use the family assets to support Christian ministries. In accordance with those commitments, Hobby Lobby stores close on Sundays. Business refuses to engage in profitable transactions that facilitate or promote alcohol use. Contributes profits to Christian missionaries and ministries. Buys hundreds of full-page newspaper ads inviting people to “know Jesus as Lord and Savior.”

34. Suggestions for Your Business • “Bake” theological language into all corporate documents • Articles of Organization/ Operating Agreements • Bylaws • Vision and mission statements • Keep business closely-held • Family members in exclusive control • Take concrete institutional steps in light of beliefs (e.g., close on Sundays) • Tithe through business (but see below regarding the risk of doing this) • No guarantees! Not a gimmick!

35. The Next Battle? • HB 1171 (“mini-RFRA”) • Prohibits state and local governments in Colorado from directly or indirectly constraining the exercise of religion, except in cases involving a compelling governmental interest. • State and local governments, including individual public officials in their official capacity, must use the least restrictive means of furthering any such compelling governmental interest. • Assigned to State, Veteran, & Military Affairs Committee . . . And Killed • SeeAZ, KS, IN, LA, AR

36. Bankruptcy Issues

37. Bankruptcy Issues • Religious Liberty and Charitable Donation Protection Act (“Donation Act”) • Creates a “safe harbor” for charitable contributions to qualified religious or charitable entities from trustee’s 2-year “reach back” powers • Limited to 15 % of a debtor’s gross annual income; or • If the contribution exceeds 15% of GAI, the transfer was consistent with the practices of the debtor in making charitable contributions • Restricts qualifying contributions consisting of cash or financial instruments to those made by “natural persons” • Different than RFRA (see Hobby Lobby)

38. Bankruptcy Issues • Be wary of: • Tithing through your business, especially if the business is struggling financially • Large tithes outside your normal giving habits, especially if you are struggling financially

39. Takeaways Be shrewd, but innocent. (Matthew 10:16) Submit to authorities. (Romans 13:1-6) Obey God rather than man where the two are in genuine conflict. (Acts 5:29)

40. Questions? DHyams@LRRLaw.com David practices in the areas of religious institutions, bankruptcy, and commercial litigation. David ‎is passionate about aiding business owners of conviction with their legal needs so that they may faithfully fulfill their ‎calling.‎ David M. Hyams Associate 1200 Seventeenth StreetSuite 3000 Denver, Colorado 80202 Phone 303.628.9541 Fax 303.623.9222