As many of you know, currently pending before the Supreme Court are consolidated cases from the Third, Seventh, and Ninth Circuits holding that, for religiously affiliated employers, employee benefits plans must initially be established by a church for the plans to be exempt from ERISA as “church plans.” The circuit courts issued these holdings when, after decades of ostensibly settled law regarding church plans, dozens of class-action lawsuits were filed by employees of religiously affiliated hospitals and healthcare providers, contending that their employers’ plans do not qualify for ERISA’s church plan exemption “because the plans were not established by a church.”

In an unusual statement favoring employer interests, the Internal Revenue Service (“IRS”), the Department of Labor (“DOL”), the Pension Benefit Guaranty Corporation (“PBGC”), and a slew of other federal agencies jointly submitted an amicus brief to the United States Supreme Court seeking reversal of the decisions.

The brief presents four arguments urging the High Court to read ERISA’s church plan exemption to apply to employee benefits plans of religiously affiliated employers notwithstanding that the plans initially may not have been established by a church.

“Natural Reading”

Invoking the interpretive influence of the IRS, DOL, and PBGC as “the agencies responsible for administering ERISA’s complex regulatory scheme,” the amici argue that “the natural reading of the statutory text” requires adherence to the agencies’ interpretation that “a [church] plan need not be initially established by a church to qualify as exempt.”  (Emphasis added).  This argument challenges the circuit courts’ interpretation of the statute’s “plain text,” which read the exemption provision to hold fast to the “requirement that a church establish a plan in the first instance” before the plan may be called a “church plan;” an interpretation behind which much of the force of the decisions was placed.

Context, History, and Purpose

Next, the agencies point to one of the fundamental goals of the Multiemployer Pension Plan Amendments Act (“MPPAA”). That goal sought to eliminate uncertainty over whether a plan is established by a church.  Sponsors of the MPPAA “resolved this uncertainty by making clear that ‘a plan or program funded or administered through a pension board will be considered a church plan’ if the board meets the requirements [under] ERISA section 1002(33)(c)(i).”  The requirements under that section include:  (1) that the plan is maintained by an organization; (2) the principle purpose of which is the administration of an employee benefits plan; (3) for the employees of a church; (4) if such organization is controlled by or associated with a church.

Consistent and Long Term Application

In further reference to the High Court’s ability to defer to agency discretion, the brief next argues that, “if there were any doubt about the best interpretations of the church-plan definition, it would be resolved by the position adopted and consistently applied by the IRS, DOL, and PBGC.” The argument additionally notes that Congress, when revisiting the church exemption provision in its several refinements of the statute, left undisturbed the agencies’ interpretation—a sure sign, the brief argues, that the interpretation is the one intended by Congress.

No Sound Reason for Radical Re-Interpretation

Lastly, raising a sort of agency stare decisis, the collective agencies argue simply that the circuit courts gave no good reason to upend decades of singular interpretation of the church plan exemption provision nor any reason to “upset decades of reliance” on the interpretation.  Thus, the amici conclude, “Congress did not condition the church-plan exemption on a church establishing the plan in the first instance.”


The outcome of these cases has the potential to affect thousands of religiously affiliated employers across the nation and places billions of dollars in the balance. Jackson Lewis will continue to monitor this case and provide updates as new developments emerge.