Religiously affiliated hospitals win Supreme Court pension case

A general view of the U.S. Supreme Court building in Washington on Dec. 5, 2004. (Courtesy of Creative Commons/Duncan Lock)

Washington — In a decision that has religiously affiliated hospitals cheering, the Supreme Court ruled that federal pension rules don't apply to religiously affiliated hospitals.

The 8-0 ruling reverses lower court decisions that sided with hospital workers who argued that the exemption from pension laws should not extend to hospitals affiliated with churches.

June 5's Supreme Court ruling in favor of the hospitals — two with Catholic and one with Lutheran ties — will also affect other religiously affiliated institutions and their employees.

"The Supreme Court got it right," said Eric Rassbach, deputy general counsel at Becket, a religious liberty law firm that filed a friend-of-the-court brief on behalf of the hospitals.

"Churches — not government bureaucrats and certainly not ambulance chasers — should decide whether hospitals are part of the church. It is simple common sense that nuns, soup kitchens, homeless shelters, seminaries, nursing homes, and orphanages are a core part of the church and not an afterthought."

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Hospital workers argued that it's unfair that these religious employers, who operate hospitals as for-profit subsidiaries that compete with secular hospitals, get a pass on pension laws designed to protect employees.

"The Supreme Court has put the retirement of hundreds of thousands of Americans at risk," said Richard Katskee, legal director of Americans United for Separation of Church and State. "These hospitals now have the right to use their religious affiliation to pocket hundreds of millions of dollars that they promised to their employees as retirement funds and pensions."

The employees also called the decision a violation of the Constitution's establishment clause, which forbids the federal government from establishing a religion or favoring one over others.

Advocate Health Care Network v. Maria Stapleton revolves around ERISA, the Employee Retirement Income Security Act, passed by Congress to ensure that companies invest and manage employee pension funds responsibly.

For decades, religiously affiliated hospitals have been allowed to take the ERISA exemption afforded to churches and other houses of worship.

The three hospitals systems who won at the high court are: Dignity Health, Advocate Health Care and St. Peter's Healthcare System.

Justice Neil Gorsuch did not participate in the decision because he was not on the court when the case was argued in March.


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