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“There is no First Amendment Exemption in Contracts Generally or in the Federal Arbitration Act:

It Would Be Poor Policy (and Maybe Unconstitutional) to Have One.”

Michael J. Broyde

In the recent case Bixler v. Church of Scientology, the California Court of Appeals added another front to the religious exemptions controversies in America. To join the Church of Scientology, one has to sign a binding arbitration contract which stipulates that any claims against the Church have to be submitted to Scientology arbitration tribunals. In this sad case, the parties allege they were raped by a church agent before leaving the faith altogether, and sued the Church for monetary damages. While there are many issues in this case, not least of which is the hideous conduct alleged, the Court made the matter worse in its reasoning for declining to compel arbitration on religious freedom grounds. The California court argued that “Scientology’s written arbitration agreements are not enforceable against members who have left the faith, with respect to claims for subsequent non-religious, tortious acts. To hold otherwise would bind members irrevocably to a faith they have the constitutional right to leave.” This approach is thrice wrong. It is inconsistent with the Constitution, Federal law, and common sense.

It is inconsistent with the Constitution because the Supreme Court has directed us many times that religious and secular institutions need to be treated the same under the law. Special state rules governing religious arbitration would violate, for example, the 2001 case Good News Club v. Milford Central School. In Good News, which concerned an incident in which the state rented out public school classrooms to all but religious institutions, the Supreme Court held that exclusion of religious groups was unconstitutional discrimination. Rights that are given generally to all — even when statutory and not from the Constitution — must be given to religious and secular groups equally, including the right to conduct arbitrations. The Court affirmed this approach twice in the last few years. Both Trinity Lutheran Church of Columbia, Inc. v. Comer (2017) and Espinoza v. Montana Department of Revenue (2020) declared unconstitutional a program that discriminated against all religions. Arbitration agreements are contracts; arbitration by religious tribunals or according to religious law must also be permitted under the same rules as a matter of constitutional law.

The Bixler ruling is inconsistent with the Federal Arbitration Act (FAA) which requires that states enforce arbitration contracts, including arbitration in front of religious courts or under religious law, so long as the parties involved agreed to it and the contract is proper under the law of the State. Of course, arbitration agreements need not be enforced when they send parties to biased, unfair, or otherwise unconscionable arbitration proceedings, whether secular or religious. So for example, arbitrators can not order parties to be beaten, and they cannot have arbitrators who are corrupt, biased or related to one of the parties. Otherwise, parties that agree to arbitration need to do as they promised. Of course, there might be reasons not to enforce this specific agreement under the FAA, such as unfairness in the Scientology tribunals or other fact-specific details unique to this case (scope of the agreement or bias of the arbitrators) — but the Court here made no mention of them, instead speaking broadly about religious freedom to opt out of contracts.

It is inconsistent with common sense as well. People ought to be allowed to make agreements that bind them in ways that the law cannot compel — such as to obey Jewish, French or Lloyd’s of London’s rules — and the law should uphold their contractual agreement, even though no one should ever be forced to make such an agreement. But what about the California court’s observation that “[j]ust like written antenuptial agreements to raise children in a particular faith are not enforceable against a parent who has left the faith” arbitration agreements to go to religious tribunal should not be enforced once a person has left the faith? Child custody agreements are different — exactly because the child who is subject to the agreement did not agree to it. But in cases where the parties agree to have their financial disagreement resolved in a Brazilian or Scientology tribunal, or under Spanish or Jewish Law, common sense allows people to resolve their disputes as they promised they would.

A good way to think about this case might be to invert it. Imagine a person signed an agreement to arbitrate in front of a secular organization consistent with German law and now has joined a faith that prohibits such. Or imagine a baker who contracted to bake a cake for a wedding that their newfound faith now objects to? We should not allow anyone to void their contracts based on their newfound faith. To do so is crazymaking and opens contracts to a very subjective faith-test that further frays the neutrality of law, in what ought to be an especially neutral area of law. The time for a person to examine their conscience or faith is before they sign a contract and the law should not allow religious freedom arguments to invalidate otherwise valid contracts. There is no religious freedom right to avoid doing as one contracted, even as the right to change one’s religion (and have no religion) is a fundamental right.

Pretend that the Church of Scientology is not a religion, but merely a secular club, devoid of any ‘First Amendment’ protections.¹ Would this arbitration agreement be valid?

There are ample statutory grounds to question the arbitration agreement presented here, which are faith neutral and devoid of any ‘First Amendment’ issues. Among the questions are:

Is it consistent with the FAA to require arbitrators to be “in good standing with the Mother Church” or does that violate the bias provisions.²
Are the substantive rules of the Church themselves neutral enough to not be deemed unconscionable?
Does this agreement cover conduct unrelated to Church services, since the final paragraph adds the words “out of my participation in the service”?
Is the coverage of the agreement unduly broad and indeterminate in scope, since it seeks to cover parties unmentioned, and to apply even after this service agreement has ended?
Are the parties to the agreement clear? This agreement seems to cover even Church officials in their private capacity, yet they did not sign the agreement.
Does this agreement intend to cover civil damages for criminal conduct unrelated to church services?

And so much more, including whether the new rules limiting arbitration in cases of sexual assault or relating to sexual harassment apply to this matter, or retroactively.

In short, if this were a gym and not a church, no one doubts that California law would hesitate to enforce this agreement and would undertake a close and detailed hearing with findings of fact about whether the arbitration process proposed by the parties is fair or is the result unconscionable, both in theory and in fact. This article does not call for special treatment of religious arbitration agreements at all — all arbitration agreements must adhere to the FAA.

The rush to look closely at this as a religious freedom issue is unwise, not needed, not supported by the Federal Arbitration Act and constitutionally complex and seemingly unconstitutionally. It was a mistake to do so since this case could be decided on other — constitutionally not complex — grounds.

Religion has, sadly enough, become a source of controversy in America. People now seek religious exemptions for all sorts of things, some clearly proper and others much less so. Contract law should not be on that list at all. ♦

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Michael J. Broyde is professor of law at Emory University School of Law, the Berman senior fellow and projects director at the Center for the Study of Law and Religion at Emory University. He is a professor at Emory’s Tam Institute of Jewish Studies, and is the director of the Law Schools SJD program. He was a Fulbright Scholar at Hebrew University and visiting professor at Stanford Law School. His primary areas of interest are law and religion, Jewish law and ethics, family law, and comparative religious law.

Recommended Citation

Broyde, Michael J. “There is no First Amendment Exemption in Contracts Generally or in the Federal Arbitration Act: It Would Be Poor Policy (and Maybe Unconstitutional) to Have One.” Canopy Forum, March 15, 2022. https://canopyforum.org/2022/03/15/there-is-no-first-amendment-exemption-in-contracts-generally-or-in-the-federal-arbitration-act/.

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