Faith and Federalism: Do Charitable ChoiceProvisions Preempt State NondiscriminationEmployment Law?

I. Introduction"We don't hire people of your faith."1 Alan Yorker, the top candidate for a psychologist position at the United Methodist Children's Home in Decatur, Georgia, was not only disappointed that his job interview ended with this abrupt pronouncement about his Jewish faith-he was angry enough to file a lawsuit.2 '"It's painful to have someone tell you they won't even interview you for a job because of your religion, ' " Yorker explained, " ' [b]ut the pain becomes greater when you realize your own taxes are supporting that discrimination.'"3If the children's home were strictly a private religious charity financed by the United Methodist Church, there would be little question whether Yorker's religious beliefs could disqualify him as an employee.4 Under Title VII of the Civil Rights Act of 1964,5 religious organizations enjoy an exemption from the Act's general prohibition of religious discrimination in employment.6 But the United Methodist Children's Home in Decatur, Georgia, like many religiously affiliated children's homes, receives a substantial amount of its funding from state social service contracts.7 Should government funding affect the organization's exemption status?"Tax-funded religious discrimination"8 has become a rallying cry for opponents of "charitable choice," the informal title for laws and regulations that allow religious organizations to compete for government social service contracts on an equal basis with other private service providers without altering their religious character.9 In this Note, "charitable choice" will refer to the original charitable choice provisions Congress enacted as part of the sweeping welfare reform legislation of 1996.10 The 1996 charitable choice provisions applied primarily to welfare programs funded under block grants to states for Temporary Assistance for Needy Families (TANF).11 The charitable choice provisions direct states distributing these funds to recognize certain safeguards protecting the religious freedom of faith-based service providers.12 The provision addressing religious hiring freedom is the most controversial of these protections.13 section 604a(f) of the charitable choice statute expressly states that government funding does not affect a religious organization's Title VII exemption.14President Bush entered the White House in 2001 aiming to expand the role of faith-based organizations in the delivery of social services.15 In his first month in office, Bush created the Office of Faith-Based and Community Initiatives in the White House to facilitate faith-based participation in government-funded welfare programs.16 Two months later, Representative J.C. Watts introduced the Bush Administration's most ambitious piece of legislation designed to expand charitable choice.17 The "Charitable Choice Act of 2001," Title II of the Community Solutions Act of 2001, would have extended charitable choice protections for faith-based contractors to eight federal program areas.18 The House passed the Charitable Choice Act in July 2001,19 but the bill had a rougher time in the Senate.20 The Senate's version of the Community Solutions Act, called the "Charitable Aid, Recovery and Empowerment Act" (CARE),21 did not address faith-based hiring rights or extend charitable choice provisions to specific federal programs.22 The 107th Congress ended without a Senate vote on the CARE Act, and the scaled-back 2003 version of the bill is now in committee.23Although the Senate has effectively stonewalled legislative attempts to extend charitable choice provisions, President Bush has continued to advance his Faith-Based Initiative via executive orders and administrative policy.24 In December 2002, President Bush issued an executive order to "expand opportunities" for faith-based participation in a broad range of federally-funded social service programs.25 In response, federal agencies have revised their regulations to reflect that faith-based organizations with government contracts retain their Title VII exemption. …