Kelly v. Methodist Hospital of Southern Cal.

997 P.2d 1169, 95 Cal. Rptr. 2d 514, 22 Cal. 4th 1108, 22 Cal. 1108, 2000 Cal. Daily Op. Serv. 3717, 2000 Daily Journal DAR 4951, 65 Cal. Comp. Cases 494, 2000 Cal. LEXIS 4078, 78 Empl. Prac. Dec. (CCH) 40,058, 82 Fair Empl. Prac. Cas. (BNA) 1544
CourtCalifornia Supreme Court
DecidedMay 11, 2000
DocketS053888
StatusPublished
Cited by46 cases

This text of 997 P.2d 1169 (Kelly v. Methodist Hospital of Southern Cal.) is published on Counsel Stack Legal Research, covering California Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kelly v. Methodist Hospital of Southern Cal., 997 P.2d 1169, 95 Cal. Rptr. 2d 514, 22 Cal. 4th 1108, 22 Cal. 1108, 2000 Cal. Daily Op. Serv. 3717, 2000 Daily Journal DAR 4951, 65 Cal. Comp. Cases 494, 2000 Cal. LEXIS 4078, 78 Empl. Prac. Dec. (CCH) 40,058, 82 Fair Empl. Prac. Cas. (BNA) 1544 (Cal. 2000).

Opinion

*1111 Opinion

WERDEGAR, J.

The Fair Employment and Housing Act (FEHA) (Gov. Code, § 12900 et seq.) 1 bars discrimination by employers on several enumerated bases. Under section 12926, subdivision (d) (the religious-entity exemption), the term “employer” specifically excludes “a religious association or corporation not organized for private profit.” 2 In McKeon v. Mercy Healthcare Sacramento (1998) 19 Cal.4th 321 [79 Cal.Rptr.2d 319, 965 P.2d 1189] (McKeon), we determined that a hospital controlled by the Roman Catholic Church could invoke the religious-entity exemption even though not officially incorporated as a nonprofit religious corporation under Corporations Code section 9110 et seq. No other factual or legal arguments were at issue in McKeon.

In the present case, plaintiff asserts that her former employer, a different religiously affiliated hospital, fails to qualify for the religious-entity exemption under its previous incarnation because the hospital’s purpose and affiliations are inadequately religious. 3 We disagree.

I. Factual and Procedural History

Plaintiff, a nurse at defendant Methodist Hospital of Southern California (Hospital), was discharged in 1991 on the grounds that she had failed to *1112 return to work after the expiration of her medical leave, despite having received five extensions of time to do so. Plaintiff was 50 years old at the time of her discharge. She filed a lawsuit against Hospital and her immediate superior, alleging, among other things, that her termination was based on her age. While she did not seek direct relief under FEHA, she did allege that her termination violated California’s fundamental public policy against age discrimination as expressed in FEHA. (See Tameny v. Atlantic Richfield Co. (1980) 27 Cal.3d 167 [164 Cal.Rptr. 839, 610 P.2d 1330, 9 A.L.R.4th 314] (Tameny).) Tameny claims permit wrongful termination damages when a termination is undertaken in violation of a fundamental, substantial and well-established public policy of state law grounded in a statute or constitutional provision. (See Gantt v. Sentry Insurance (1992) 1 Cal.4th 1083, 1094-1095 [4 Cal.Rptr.2d 874, 824 P.2d 680].)

Hospital moved for summary judgment, arguing it is a religious corporation not organized for private profit and is thus expressly excluded from FEHA under the religious-entity exemption. Relying on our decision in Jennings v. Marralle (1994) 8 Cal.4th 121, 135-136 [32 Cal.Rptr.2d 275, 876 P.2d 1074], in which we held that a FEHA-based Tameny claim would not lie against an employer who is specifically exempt from the scope of FEHA, Hospital argued that, because no state law other than FEHA proscribes age discrimination and Hospital is not subject to FEHA restrictions, no public policy basis exists for a Tameny claim against Hospital.

In support of the motion for summary judgment, Hospital presented evidence of its creation by and affiliation with the United Methodist Church. Under Hospital’s articles of incorporation, all of its assets are irrevocably dedicated to charitable and religious purposes, and upon its dissolution those assets revert to the United Methodist Women. Hospital’s directors are elected annually at a meeting of the Woman’s Society of Christian Service of the Southern California-Arizona Conference of the Methodist Church. Under Hospital’s bylaws, a majority of its board members must be members of the United Methodist Church and one member of the board must be a Methodist minister. The president of the United Methodist Women is also a board member by virtue of her office. In lieu of shareholders, Hospital has “members” who vote on significant issues affecting Hospital. The only persons eligible to be members are those individuals currently serving on the board of directors and those individuals currently serving on the Executive Committee of United Methodist Women.

A Methodist chaplain ministers to the religious needs of patients in the Hospital, and Hospital broadcasts a daily in-house sermon for the benefit of *1113 patients, staff and visitors. Hospital abides by the requirements of the Health and Welfare Ministry of the United Methodist Church and is accredited by the Certification Council of the United Methodist Church.

In addition, Hospital demonstrated it is exempt from federal taxation as a corporation “organized and operated exclusively for religious, charitable ... or educational purposes” as set forth in 26 United States Code section 501(c)(3) under an Internal Revenue Service ruling in effect since 1937. Hospital also noted that several years earlier the Fair Employment Practice Commission (the predecessor to the Fair Employment and Housing Commission (FEHC)) had dismissed a discrimination complaint against Hospital after determining that it lacked jurisdiction over the complaint.

Plaintiff opposed the summary judgment motion, arguing triable issues of fact remain as to whether Hospital is actually a “religious association or corporation not organized for private profit” within the meaning of section 12926. She asserted that Hospital is ineligible for the religious-entity exemption because it is a secular business involved in health care, not an organization dedicated to religious indoctrination or propagation of the Methodist faith. In factual support, she cited the testimony of Hospital’s administrative director of human resources, who admitted that Hospital’s “business” is “[cjaring for the health care needs of the community” and is not specifically related to religion. Plaintiff further relied on Hospital’s articles of incorporation, which provide that the purposes of the corporation are to “establish, erect and maintain a hospital; to buy, own, hold and sell real estate; to receive, by donation or otherwise any real or personal property that may be deemed advantageous, desirable or necessary; to lease, mortgage, sell, or otherwise dispose of property; to establish and maintain a training school for nurses; to receive endowments and to invest the same; to establish and maintain free beds for those unable to pay hospital charges; to maintain a dispensary; to establish and maintain branch hospitals and sanitariums; and to receive property and to pay annuities.” In plaintiff’s view, these are not religious purposes. Plaintiff also noted that Hospital does not require its patients or employees to profess the Methodist faith, nearly half the members of the board may be non-Methodist, and only one member of the board need be a Methodist minister.

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Bluebook (online)
997 P.2d 1169, 95 Cal. Rptr. 2d 514, 22 Cal. 4th 1108, 22 Cal. 1108, 2000 Cal. Daily Op. Serv. 3717, 2000 Daily Journal DAR 4951, 65 Cal. Comp. Cases 494, 2000 Cal. LEXIS 4078, 78 Empl. Prac. Dec. (CCH) 40,058, 82 Fair Empl. Prac. Cas. (BNA) 1544, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kelly-v-methodist-hospital-of-southern-cal-cal-2000.