Labor & Employment Law Daily Wrap Up, DISCRIMINATION—RELIGIOUS—8th Cir.: Hospital was religious entity exempt from Title VII claims of RN fired for COVID vax noncompliance, (Aug 4, 2025)

By Kathleen Kapusta, J.D.

Congress, observed the court, did not define what makes an organization “religious.”

Affirming summary judgment to Mercy Hospital St. Louis on the Title VII claims of a registered nurse who argued that her termination for refusing to comply with the hospital’s COVID-19 vaccination policy constituted religious discrimination, the Eighth Circuit found the hospital qualified for Title VII’s exemption for religious organizations. Further, the hospital waived its right to claim the exemption by complying with the Centers for Medicare and Medicaid Services’ (CMS) vaccination mandate and was not estopped from invoking the exemption because it invited employees to submit religious exemption requests (Conway v. Mercy Hospital St. Louis, No. 24-1388 (8th Cir. Aug. 1, 2025)).

After the hospital implemented a mandatory COVID-19 vaccination policy in July 2021 in accordance with the CMS vaccination requirement, the RN submitted a religious exemption request pursuant to the policy. She argued that the vaccine contained fetal tissue cells and was “possibly harmful to the human body” and claimed that her faith required her not to “participate in pharmacopeia.” The hospital denied her request and fired her when she refused to be vaccinated.

Lower court proceedings. She subsequently sued the nonprofit healthcare facility for religious discrimination in violation of Title VII. Mercy Hospital moved for summary judgment arguing that, as a religious organization, it was exempt under 42 U.S.C. § 2000e-1(a). The district court granted the motion.

Corporate structure. On appeal, the Eighth Circuit first noted that Mercy Hospital St. Louis is a wholly owned subsidiary of Mercy Health East Communities, which in turn is wholly owned by Mercy Health, a civil business entity formed by Mercy Health Ministries—a public juridic person of the Roman Catholic Church—to provide healthcare services in accordance with Catholic doctrine. Mercy Health’s wholly owned subsidiary, MHM Support Services, Inc. (MHM), is a Missouri nonprofit corporation that employs most Mercy Health personnel.

Religious organization exemption. As to the RN’s religious discrimination claim, the court pointed out that while Title VII generally prohibits employers from discriminating against employees based on their religious beliefs, Congress created a limited exemption for “religious organizations.” However, it did not define what makes an organization “religious” so the court, turning to the ordinary meaning of “religion,” observed that a religious organization is commonly understood to be one “committed, dedicated, or consecrated to service of the divine” or “relating to religion.”

Uncontroverted facts. The court next examined the uncontroverted facts regarding Mercy Hospital’s structure and mission, noting that Mercy Hospital St. Louis is a nonprofit, tax-exempt healthcare provider that receives monetary support from the Catholic Church. It operates as a dba of Mercy Hospitals East Communities, a wholly owned subsidiary of Mercy Health East Communities, which is owned by Mercy Health, a civil nonprofit corporation.

The hospital’s environment, observed the court, reflects its religious identity, with Catholic imagery throughout and daily prayers broadcast over the public address system. Mercy Health is the civil corporate entity through which the Catholic Church conducts its healthcare ministry, and its governing documents commit it to advancing the healing ministry of Jesus Christ in accordance with Catholic doctrine. Its Board of Directors includes four Sisters of Mercy and is accountable to the Vatican Dicastery for the Institutes of Consecrated Life and Societies of Apostolic Life.

Further, Mercy Health applies the Ethical and Religious Directives for Catholic Health Care Services promulgated by the United States Conference of Catholic Bishops and requires employees to adhere to them and it is wholly owned by Mercy Health Ministries, a public juridic person of the Roman Catholic Church formed under Canon Law and not incorporated under civil law.

In addition, Mercy Health Ministries, Mercy Health, and Mercy Hospital St. Louis are all listed in the Official Catholic Directory, which confers IRS recognition of their religious and tax-exempt status and authorizes them to hold property in the name of the Church and MCHR has recognized Mercy and its affiliates as religious organizations operated by the Catholic Church.

“These undisputed facts,” said the court, “overwhelmingly support the conclusion that Mercy Hospital qualifies as a ‘religious organization’ within the meaning of § 2000e-1(a).” Nor was this determination altered by the fact that Mercy Hospital generates revenue or employs a predominantly non-Catholic workforce. “To deny an exemption based on inherently religious decisions—such as whether to proselytize or employ only co-religionists—would risk unconstitutional denominational discrimination,” the court explained.

Waiver. The RN, however, argued that Mercy waived its right to claim the exemption by complying with the CMS mandate, which required covered providers to offer a religious exemption process. Disagreeing, the court noted that “compliance with a federal regulation does not waive a statutory exemption that Congress conferred.” And while the CMS rule required employers to provide a process for requesting exemptions, it did not abrogate Title VII or suspend Section 2000e1(a)’s application to religious organizations.

Equitable estoppel. Nor was the court persuaded by the RN’s contention that Mercy should be estopped from invoking the exemption at summary judgment because its internal vaccine policy invited employees to submit religious exemption requests. Finding no clear representation, reasonable reliance, or resulting detriment, the court noted that Mercy’s policy stated only that “[e]xemptions to the mandatory COVID-19 vaccination may be granted for certain medical contraindications... [or] if vaccination conflicts with the tenets of a sincerely held religious belief.”

This conditional language did not guarantee approval or suggest that Mercy was abandoning its exemption from Title VII’s liability framework, the court stated, finding that because Mercy made no promise that would have induced detrimental reliance, the RN’s estoppel argument failed.

The case is No. 24-1388.

Judge: Erickson, R.

Attorneys: Mark Edward Blankenship, Jr. (Ott Law Firm) for Patricia Conway. John P. Korb (Ogletree & Deakins) for Mercy Hospital St. Louis.

Companies: Mercy Hospital St. Louis

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