Supreme Court Risks Pensions And Retirement Funds Of Employees At Religiously Affiliated Hospitals

In an 8-0 decision, the U.S. Supreme Court ruled today that religiously affiliated hospitals could jeopardize the financial security of hundreds of thousands of workers nationwide. The decision involves three cases – Dignity Health v. Starla Rollins, Advocate Health Care Network v. Maria Stapleton and St. Peter’s Healthcare System v. Laurence Kaplan.

Employees of religously affiliated hospitals may see their pensions at risk, thanks to a Supreme Court ruling

Putting at risk the retirement funds of hundreds of thousands of employees, the Court ruled that religiously affiliated hospitals don’t have to comply with the Employee Retirement Income Security Act (ERISA). ERISA is a federal law that protects employee pensions by requiring that employers make good on their promises to employees by funding and insuring pension plans as well as keeping employees informed. Houses of worship are exempt from ERISA, and a number of religiously affiliated hospitals claimed they should be as well. (Read more about the case here.)

Americans United filed a brief in the case and pointed out that religiously affiliated hospitals and medical centers employ hundreds of thousands of employees, the vast majority of whom perform secular duties. As highlighted by Justice Sonia Sotomayor, the religiously affiliated hospitals “operate for-profit subsidiaries ... employ thousands of employees ... earn billions of dollars in revenue ... and compete in the secular market with companies that must bear the cost of complying with ERISA.” Those hospitals shouldn’t be allowed to drain their employees' pension funds simply because of a religious affiliation.  

Despite those significant concerns, the court based its decision solely on the wording of ERISA. That means that the decision, although bad for employees across the country, is limited to interpreting that specific law. As Justice Sotomayor pointed out, “this current reality might prompt Congress to take a different path.” We hope so, and we will continue to fight for that result. After all, religious freedom is a fundamental American value – and retirement and pensions are fundamental parts of the American dream. Our country can and should deliver both.