Supreme Court to decide fate of nun-run hospitals Class-action lawyers threaten religious hospitals’ employee benefits, claiming hospitals aren’t part of a church

WASHINGTON, D.C. –  A group of religious hospitals today asked the Supreme Court for protection from lawyers claiming that the hospitals are not part of a church. In Advocate Health Care Network v. Stapleton a group of class-action lawyers argue that several religious hospital networks shouldn’t be allowed to provide their employees with church pension plans rather than for-profit pension plans similar to those used by corporations like Exxon or Walmart. If Advocate and hundreds of other religious hospitals around the country were forced to follow for-profit rules, money currently used to serve the poor and inner city communities would be lost and many would be forced to shut down.

Churches were the first organizations in the U.S. to provide pension plans to their employees. Today these faith-driven hospitals provide generous benefits to their employees, including pensions through the hospitals’ comprehensive church pension plans. Yet their beliefs and the charitable work they do are being threatened by a group of class-action lawyers who are targeting religious hospitals claiming that hospital ministries are not religious enough to have a tax-exempt church pension plan under The Employee Retirement Income Security Act (ERISA). However, the IRS has viewed these ministries as part of a larger church for more than 30 years.

“If you find yourself arguing that the Franciscan Sisters of the Poor are not part of the Catholic Church you are doing it wrong,” said Eric Rassbach, deputy general counsel at the religious liberty law firm Becket, which filed a friend-of-the-court brief on behalf of the hospitals. “Lawyers have no place saying that nuns are not part of the church—not to mention soup kitchens, homeless shelters, seminaries, nursing homes, and orphanages. These nonprofits are a core part of the church, not an afterthought.”

Over the past four years, class-action lawyers have brought nearly 100 lawsuits against various Catholic and Protestant hospitals around the country, arguing that these nonprofit hospitals had broken the law by participating in special church pension plans instead of using lower-benefit pension plans designed for large for-profit corporations like Exxon and Walmart. If the class-action lawyers prevail, they will receive millions of dollars in attorneys’ fees. In essence, these lawyers argued that serving others is not part of being a “church” and therefore religious hospitals, and other religious ministries, cannot use church pension plans. But a core part of what churches do includes going into the community to feed the hungry, serve the homeless, distribute refugee relief, and more. This is why, for decades, Congress and the IRS have allowed religious non-profits to provide church pension plans for their employees instead of for-profit pension plans.

“For most religious Americans, faith is not some secretive activity conducted behind closed doors,” said Rassbach. “Faith for them means being out in the community serving with and for others, particularly the least among us. The Supreme Court should recognize that fact.”

The Supreme Court is anticipated to decide the case by the end of June.

For more information or to arrange an interview with a Becket attorney, please contact Melinda Skea at media@becketlaw.org or 202-349-7224. Interviews can be arranged in English, Chinese, French, German, Portuguese, Russian, and Spanish.

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Becket is a non-profit, public-interest law firm dedicated to protecting the free expression of all religious traditions and has a 100% win-rate before the United States Supreme Court. For over 20 years, it has successfully defended clients of all faiths, including Buddhists, Christians, Jews, Hindus, Muslims, Native Americans, Sikhs, and Zoroastrians (read more here).