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Volume 106 - Issue 2
The Irony of Hosanna-Tabor Evangelical Lutheran Church and School v. EEOC
In Hosanna-Tabor Evangelical Lutheran Church and School v. EEOC, a schoolteacher sued her employer for retaliating against her in violation of the American with Disabilities Act (ADA). The success of her ADA claim turned on whether the Supreme Court thought that she was a minister. If she was not a minister, she would have probably won. After all, the school stated in writing that a main reason for her termination was her threatened lawsuit. But because the Supreme Court decided that she was a minister, and that ministers may not sue their religious employers for discrimination under the ministerial exception, she lost.In fact, neither the Free Exercise Clause nor the Establishment Clause necessitated the ministerial exception. Under Employment Division v. Smith, neutral laws of general applicability do not violate the Free Exercise Clause, and no one disputes that the ADA is a neutral law of general applicability. In attempting to distinguish Smith, the Supreme Court not only created an incoherent free exercise jurisprudence but also ignored Jones v. Wolf, which explicitly rejected blanket deference to religious institutions in matters of internal governance. Jones further recognized that a deference approach may cause more establishment problems than a neutral principles of law approach. Indeed, the irony of the Hosanna-Tabor case is that trying to discern whether the schoolteacher was a minister entangled the Court in religious doctrine more than simply adjudicating her retaliation claim would have
Act III of the Ministerial Exception
The Supreme Court’s recent decision in Hosanna-Tabor Evangelical Lutheran Church and School v. EEOC marks a resounding victory for the principle of church self-governance and the autonomy of religious institutions. But it is just the beginning of the story, not the end. Hosanna-Tabor properly recognizes that a significant measure of church autonomy is a key element part of the American church–state settlement, and may signal a broader recognition of the important role played by nonstate institutions in our social infrastructure. But it does not tell us how churches should behave under such a regime of autonomy, or how those inside and outside the church should respond. This commentary argues that these are the questions we are now obliged to consider. Institutional autonomy imposes responsibilities as well as rights, and churches must ponder when, whether, and how they will use their autonomy. It also imposes a civic duty on citizens to monitor, engage with, and sometimes criticize our central infrastructural nonstate institutions. In short, HosannaTabor raises nonlegal questions that are just as important as the allocation of legal authority between churches and other nonstate institutions and the state.
Using Appraisal to Protect Net Operating Loss Carryforwards
The Internal Revenue Service’s net operating loss rules enable corporations to use one year’s losses to offset their tax liability in future years. However, a corporation’s ability to do so depends on its maintaining the same ownership: if enough of a corporation’s stock changes hands, it loses the ability to take advantage of all of its prior losses. In response to the threat of ownership changes, corporations have enacted particularly strict “poison pills,” which are designed to prevent stock from changing hands. However, a side effect of these poison pills is that they ameliorate the threat of hostile takeovers, thereby reducing managers’ incentives to maximize corporate welfare. In this Comment, I suggest using the appraisal mechanism to alleviate the need for poison pills and ownership-change restrictions by enabling corporations to pursue damages against shareholders who trigger the devaluing of their net operating losses. The proposed appraisal regime properly balances the interests of tax law and corporate law by ensuring that net operating losses will not be freely transferred but will also not serve as an excuse for allowing managerial
incentives to deviate from the proper goal of shareholder wealth maximization.