In Determining Whether A Corporation Qualifies As A Religious Corporation, Words Speak Louder Than Actions.

California readers most likely are aware of the fact that California's nonprofit corporate law is triadic.  Thus, it possible to organize a nonprofit corporation as a public benefit corporation, a mutual benefit corporation or religious corporation.  Although each of these laws contain many of the same provisions, they are separate laws.  Thus, I would characterize California's nonprofit corporations laws as more  homoiousian than homoousian.  For the difference between these two words, see this 2012 post.

California's Fair Employment and Housing Act, Gov't Code § 12900 et. seq., expressly provides the term “employer” does not include a “religious association or corporation not organized for private profit.” Cal. Gov't Code § 12926(d).  In Verduzco v. St. Mary's High Sch., 2024 WL 3088467 (E.D. Cal. June 21, 2024), the plaintiff argued that the defendant did not qualify for this exception even though the defendant had been incorporated as a religious corporation.  The plaintiff's argument rested on no firmer a foundation than an assertion that the defendant was acting not as a religious corporation but as a public benefit corporation.   Unlike religious corporations, public benefit corporations are not excepted from the definition of "employer" under the FEHA.  According to the plaintiff, actions speak louder than words on a piece of paper (the articles).

After taking judicial notice of the defendant's articles of incorporation, U.S. District Court Judge Kimberly J. Mueller ruled that words (i.e., the articles of incorporation) determine the character of a corporation:

A nonprofit public benefit corporation is a specific type of corporate entity that must specifically state in its articles of incorporation that it is a “nonprofit public benefit corporation . . . organized under the Nonprofit Public Benefit Corporation Law[.]” Cal. Corp. Code § 5130(b)(1).  Likewise, a religious corporation must include specific language stating it is a “religious corporation . . . organized under the Nonprofit Religious Corporation Law[.]” Cal. Corp. Code § 9130(b).  The High School's articles of incorporation contain language indicating it is a religious corporation, not a nonprofit public benefit corporation. Req. at 4, 7; see also Sprewell [v. Golden State Warriors], 266 F.3d [979] at 988 [(9th Cir. 2001)].