California State Officials Urge California Supreme Court Not To Extend Ministerial Exception To Wage And Hour Claims

CATEGORY: Private Education Matters CLIENT TYPE: Private Education The California Supreme Court is considering an important question for religious employers: whether the First Amendment's ministerial exception categorically prevents employees who qualify as 'ministers' from bringing minimum wage and overtime claims against religious organizations, even when resolving those claims would not require a court to decide questions of religious doctrine or governance. The California Attorney General and Division of Labor Standards Enforcement (DLSE) recently filed briefs urging the Court to reject such a categorical rule. The dispute arises from the San Francisco Zen Center (Center), a nonprofit Zen Buddhist organization that operates three residential training centers. The Center also engages in revenue-generating activities, including renting guest rooms to the public. Participants in the Center's residential training program perform both religious practices, such as meditation, and work that supports these operations. They receive room and board and relatively small monthly stipends. Annette Lorenzo participated in the Center's program from 2015 until 2019. Her duties included cleaning guest rooms, doing laundry, checking in guests, working in the kitchen and bathhouse, and preparing lunches for guests. When she left the Center in 2019, her monthly stipend was approximately $198. Lorenzo subsequently filed a claim with the California Labor Commissioner seeking unpaid wages, and the Labor Commissioner awarded her approximately $149,000 in minimum wages, overtime, liquidated damages, interest, and waiting-time penalties. The Center appealed and argued that the ministerial exception barred Lorenzo's claims. The trial court agreed, but the Court of Appeal reversed. For purposes of the appeal, Lorenzo conceded that the Center was a religious institution and that she qualified as a minister; the issue therefore became whether ministerial status alone categorically prevents a worker from pursuing minimum wage and overtime claims. The Court of Appeal concluded that it does not, reasoning that the exception bars claims requiring inquiry into a religious organization's internal governance, faith, or doctrine, but does not necessarily bar claims seeking compensation for work already performed. The California Supreme Court granted review of that issue and the Supreme Court's decision has not been issued yet. In its brief, the Attorney General emphasizes the distinction between the ministerial exception and the broader church autonomy doctrine. The ministerial exception protects a religious organization's constitutional authority to select, supervise, and remove individuals who perform important religious functions. The U.S. Supreme Court applied that principle in two cases (Hosanna-Tabor and Our Lady of Guadalupe), the latter of which involved teachers at religious K–12 schools. According to the Attorney General, however, those cases concerned challenges to employment termination decisions; the Supreme Court has never held that ministerial status creates a general exemption from minimum wage and overtime requirements. The Attorney General and DLSE argue that determining how many hours Lorenzo worked and what statutory wages she was owed does not interfere with the Center's decision about who should serve as a minister. The Attorney General also points directly to the potential consequences for religious schools, arguing that Our Lady of Guadalupe adopted a broad understanding of who may qualify as a minister and that many K–12 teachers at religious schools could fall within that definition. In the State's view, categorically extending the ministerial exception to wage-and-hour laws could therefore remove minimum wage and overtime protections from a substantial number of religious-school employees who perform important religious functions. Note: Religious schools should watch this case closely, particularly in light of the California Attorney General's position urging the California Supreme Court to adopt a narrower view of the ministerial exception. The Attorney General's briefing signals a potential shift toward allowing wage-and-hour laws to apply even to employees who perform important religious functions, rather than treating ministerial status as a categorical bar to such claims. LCW will continue to monitor this case.