A virtual conference sponsored by Canopy Forum of the Center for the Study of Law and Religion at Emory (CSLR) featuring scholars, experts and practitioners on the topic of religious arbitration. View the full video and browse all essays here.
“A Legal Analysis of Religious Arbitration”
Religious arbitration is on the rise in the United States. Particularly noteworthy is its expansion beyond disputes that are confined to a particular congregation: religious arbitration can now be found in the commercial context, binding customers of religious proprietors and other non-adherents. This has been met with criticism calling into question the very legality of the practice.
This essay will identify and examine the most common legal issues raised by religious arbitration: the enforceability of arbitration agreements in general, along with constitutional concerns under both the Free Exercise Clause and the Establishment Clause appurtenant to the phenomenon. As will be seen, religious arbitration poses a particular set of challenges but, simultaneously, demands an irreducible level of legal recognition.
1. Religious Arbitration Defined
Before critiquing religious arbitration, let us first define the term and consider its popularity and the position of its detractors.
As Black’s Law Dictionary defines it, “Alternative Dispute Resolution” (“ADR”) refers to “procedures for settling disputes other than litigation.” By avoiding government courts, disputants opting for ADR hope to realize the benefits of a process that is frequently touted to be “less costly and more expeditious.” Among the various forms of ADR is arbitration, a “process of dispute resolution in which a neutral third party (arbitrator) renders a decision after a hearing at which both parties have an opportunity to be heard.” Arbitration, as with other forms of ADR, requires consent of the parties to the dispute in question in order to proceed.1“Arbitration is strictly ‘a matter of consent.’” Granite Rock Co. v. Int’l Bhd. of Teamsters, 561 U.S. 287, 299 (2010) (quoting Volt Information Sciences, Inc. v. Board of Trustees of Leland Stanford Junior Univ., 489 U.S. 468, 479 (1989)). This flows naturally from the fact that arbitration is contractual in nature, reflecting the parties’ mutual agreement to resolve their particular dispute privately rather than in public courts.
A “religious arbitration agreement” may be defined as a contract or contractual provision according to which parties agree to resolve some or all of their past or future legal disputes through a religiously affiliated arbitrator, which arbitrator may be a religious leader, a representative of a religious institution, or a lay person who will conduct the arbitration and issue an award by reference to specific religious rules or doctrines.
Thus, assent to religious arbitration could be a condition of congregational membership, thereby applying to any future disputes arising between co-religionists within the congregation, or between congregants and their church. Religious arbitration could also be included as a term in a commercial or employment contract, and would thereby apply to any future consumer or employment dispute between an individual and the company in question.
2. Why Religious Arbitration?
The practice of eschewing state courts for religious tribunals harkens back to ancient times. It is, after all, natural for any community, and perhaps especially for a religious community, to embrace a particular set of norms — and to provide the means by which those norms can be supported and enforced. The community’s maintenance and use of religiously based principles for resolving disputes is the most effective way to maintain these norms.
Indeed, within the Christian tradition, scripture enjoins the followers of Christ to resolve disputes amongst themselves. This led to the early development of Christian ecclesiastical courts and an elaborate set of procedures for the adjudication of disputes therein. It was not until the Christianization of the Roman Empire (and, concomitantly, the Empire’s courts) that the injunction against utilizing civil courts was gradually relaxed.2 Religious tribunals remained, however, an important fixture but within increasingly limited fields of jurisdiction. See Broyde, supra note 2, at 72-76.
Although religious disestablishment has been an important characteristic of the United States’ federal government virtually since its founding, religious Americans did not typically seek religious arbitration of their disputes.3See Walter, supra note 11, at 512. Nevertheless, religious arbitration was an available option embraced by many individuals. See Broyde, supra note 2, at 76-81. This was arguably because the civil courts in America, despite lacking any formal religious association, were still largely the product of the Church, “in both substance and procedure.” Moreover, their very personnel were largely “themselves believers, acting out of a Judeo-Christian belief system.”
But in the opening decades of the twenty-first century, the religious landscape of American society is markedly different than that of the eighteenth or even twentieth centuries. To a large extent, the nation’s institutions — including its courts — have been “dechristianized.” Perhaps this has contributed to the renewed interest (at least among Christian Americans, but perhaps among individuals of other faiths as well) in religious arbitration.
At the same time, these trends underscore why many today see the very concept of religious arbitration as deeply problematic. The prospect of a parallel justice system, even if wholly voluntary and among co-religionists, undermines societal unity. Detractors also voice concerns over the quality of religious arbitration, fearing that those involved may be deprived of the justice and fairness they deserve, or that religious arbitration may be coerced upon individuals against their genuine wishes. These potential problems are arguably more pronounced when religious arbitration is used to resolve disputes which are commercial in nature and involve individuals who might not even subscribe to the faith-based principles and values upon which the arbitration is based.
On the other hand, notwithstanding constitutional imperatives, America’s commitment to religious freedom and pluralism would suggest permitting religious arbitration. Further, it is difficult to deny that for some disputes, especially those touching upon matters of faith, religious arbitration may be the only means by which to achieve resolution, or at least proffer to produce results superior to trials in secular court.
In short, religious arbitration supplies no shortage of grounds upon which to endorse or question its merits. From a policy perspective, a consensus on the desirability of religious arbitration is unlikely to emerge. That said, questions concerning the legality of religious arbitration, and the related issue of its status under the Constitution, can be answered with some degree of certainty. It is to those questions that we now turn.
3. The Legality of Religious Arbitration
The Federal Arbitration Act (FAA) sets forth the national policy of the United States regarding arbitration and preempts contrary state law. The FAA does not mention religion and religious arbitration, and it is generally understood that religious arbitration is permitted under (and covered by) the FAA to the same extent as secular arbitration.
As per the FAA, a written provision in any contract (barring certain specified exceptions) evidencing an agreement “to settle by arbitration a controversy thereafter arising out of such contract or transaction,” or any “agreement in writing to submit to arbitration an existing controversy” shall be “valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” Consequently, agreements to arbitrate, whether they be contained as a provision in an existing contract, or whether they be newly entered into on account of a particular dispute, are enforceable to the same extent that any agreement or contract would be deemed enforceable. To the extent that an agreement to arbitrate lacks certain essential terms, the FAA supplies those terms.4See U.S.C.A. at §§ 5, 9. Unlike the typical contract, however, arbitration contracts can give rise to considerable impositions upon third parties: the FAA empowers arbitrators to compel witnesses to appear before them and to provide testimony and other evidence. See id. at §7.
Of particular relevance to our inquiry are sections 10 and 11 of the FAA which respectively provide for the vacation of an arbitration award and the modification or correction of an arbitration award. More specifically, section 10 empowers the federal courts to set aside an arbitration award in the following circumstances:
- where the award was procured by corruption, fraud, or undue means;
- where there was evident partiality or corruption in the arbitrators, or either of them;
- where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any other misbehavior by which the rights of any party have been prejudiced; or
- where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made.
Similarly, section 11 empowers the federal courts to make “an order modifying or correcting” an arbitration award “so as to correct the award, and so as to effect the intent thereof and promote justice between the parties” in the following circumstances:
- (a) Where there was an evident material miscalculation of figures or an evident material mistake in the description of any person, thing, or property referred to in the award.
- (b) Where the arbitrators have awarded upon a matter not submitted to them, unless it is a matter not affecting the merits of the decision upon the matter submitted.
- (c) Where the award is imperfect in matter of form not affecting the merits of the controversy.
Taken together, sections 10 and 11, l establish a floor of fairness, integrity, and accuracy in the promulgation of arbitration awards. Consequently, these sections would seem to address at least some of the concerns raised against religious arbitration. This furnishes critical parameters upon the operations of all arbitration tribunals, including those convened as part of a religious arbitration.
As already indicated, arbitration has its detractors. Some view arbitration as depriving individuals of their right to a trial and other critical protections. At the core of these concerns, and, I submit, the grounds upon which they are most justifiably raised, is a fear that for many (particularly consumers and employees) arbitration and arbitration agreements are not genuinely entered into voluntarily. There is the fear that these provisions constitute contracts of adhesion, or are otherwise obscured by complicated fine print. These fears may arguably be exacerbated in the context of religious arbitration. Coercion, for example, may be a greater risk in the context of religious communities. With regard to commercial or employment contracts providing for religious arbitration, the consumer or employee may not recognize (nor expect) the arbitration provision he or she is agreeing to is one predicated upon a particular set of religious values or beliefs. Regardless of the context, however, the same laws of contract would operate to invalidate an arbitration agreement characterized by sufficient defects in formation. In other words, a fatally flawed religious arbitration agreement would be struck down as unenforceable just as readily as any other similarly flawed arbitration agreement.
4. Religious Arbitration and the Establishment Clause
The First Amendment to the United States Constitution precludes Congress from making any law “respecting an establishment of religion.” The Amendment’s prohibitions have generally been interpreted as applying to the other branches of the federal government, and, pursuant to the Fourteenth Amendment, to state governments as well.5 See Freedom From Religion Found. v. Hanover Sch. Dist., 665 F. Supp. 2d 58, 63 (D.N.H. 2009), aff’d, 626 F.3d 1 (1st Cir. 2010); but see Am. Legion v. Am. Humanist Ass’n, 139 S. Ct. 2067, 2095, 204 L. Ed. 2d 452 (2019) (Thomas, J., concurring) From this interpretation, the argument emerges that religious arbitration is constitutionally suspect, as it commandeers the secular judiciary to help enforce the judgments of religious tribunals.6See Michael J. Broyde, Playground Resurfacing and Religious Arbitration Are Very Similar Activities: Trinity Lutheran Church As Applied to Religious Arbitration, 18 Rutgers J. L. & Religion 298, 305 (2017). The most commonly raised objections are framed in terms of the “religious question” issue, whereby a court should not resolve issues of doctrinal controversy, see Walter, supra note 11, at 522-23, and the “nondelegation doctrine,” whereby the government “may not delegate important powers … to religious bodies,” Brian Hutler, Religious Arbitration and the Establishment Clause, 33 Ohio St. J. on Disp. Resol. 337, 350-51 (2018). The religious question issue will be discussed below, see text accompanying notes 64-65; the nondelegation doctrine issue is unpersuasive given the probable lack of state action in the enforcement of religious arbitration awards, coupled with any delegation of government powers in a way that’s somehow religiously preferential, see Michael A. Helfand, ‘the Peculiar Genius of Private-Law Systems’: Making Room for Religious Commerce, 97 Wash. U.L. Rev. 1787, 1821 (2020).
Consider, for example, the following hypothetical: parties to a religious arbitration agreement submit their commercial dispute to a religious tribunal as per the terms of their agreement. The tribunal finds that one of the parties defrauded the other. Fully consistent with the terms of the agreement, the tribunal imposes upon the losing party an obligation to recite a prayer of forgiveness. The losing party ignores the tribunal’s decision, failing to comply with its terms. The victorious party brings suit in federal court, under the FAA, to enforce the tribunal’s decision. Granting the relief requested would effectively entail the court ordering the counterparty to recite the aforementioned prayer of forgiveness.
Many readers might instinctively recoil from the suggestion that such relief could be granted. For what clearer violation of the Establishment Clause could one imagine than court-ordered prayer? Nevertheless, I submit that even such an extreme hypothetical withstands constitutional scrutiny. Labeling the relief granted as “court-ordered prayer” mischaracterizes the nature of the court’s role and action. The court is not ordering prayer per se, but rather enforcing a private contract between two parties via application of the wholly secular (and religiously neutral) provisions of the FAA.7Although I could find no case on point with the exact facts hypothecated, “courts have compelled parties to participate in religious arbitration even if the parties’ selected rules of arbitration require prayer as a part of the proceedings in the face of objections from one of the parties.” Jeff Dasteel, Religious Arbitration Agreements in Contracts of Adhesion, 8 Y.B. On Arb. & Mediation 45, 50–51 (2016). Indeed, the courts have recognized that enforcing an arbitration award as per the FAA does not violate the Establishment Clause because it does not call upon them to resolve the merits of a religious question (an undertaking that is indeed prohibited by the First Amendment).8“This is not to say that civil courts do not, at times, encounter Establishment Clause problems in the process of reviewing and enforcing a religious arbitration award. Such problems occur most frequently when particular contractual provisions cannot be interpreted by ‘neutral principles of contract law,’ but instead require interpretation of religious doctrine.” Id. at 1305 (citations omitted).
Michael A. Helfand explains this well:
Courts have uniformly held that enforcing religious forms of arbitration does not trigger First Amendment concerns because of the limited nature of the twin judicial inquiries with respect to enforcing arbitration–both enforcing agreements and confirming awards. On the front end, when courts determine whether or not to compel arbitration, the calculus avoids any constitutionally prohibited inquiries; all courts must do is ask “whether the parties have an enforceable agreement to arbitrate and, if so, whether the underlying dispute between the parties falls within the scope of the agreement.” Thus, “[o]rdinary contract principles determine who is bound by written arbitration provisions.” … These sorts of threshold questions ensure that a court, in assessing whether parties have previously agreed to submit a dispute to binding arbitration, need not “determine, or even address, any aspect of the parties’ underlying dispute.” And by avoiding the underlying merits of the dispute, courts ensure that they can compel religious forms of arbitration without adjudicating prohibited religious questions.
The same generally holds true when courts decide whether or not to confirm an arbitration award. In such circumstances, courts are charged in the first instance with ensuring compliance with statutory procedural requirements; the court, with rare exception, may not review the merits of an arbitration award. As a result, when courts confirm a religious arbitration award, there is no need to consider the religious matters underlying the award that are beyond the constitutional authority of courts to adjudicate. Thus, courts regulate religious arbitration-like all other forms of arbitration—via the mechanisms laid out by the FAA.“Religious Arbitration and the New Multiculturalism: Negotiating Conflicting Legal Orders” by Michael A. Helfand
5. Religious Arbitration and the Free Exercise Clause
The First Amendment also precludes government entities from “prohibiting the free exercise” of religion. The Supreme Court, in Employment Division v. Smith, interpreted the Constitution’s text as barring the government from singling out any particular religion, or religion in general, for disparate, inferior treatment vis-à-vis nonreligion.9See Emp. Div., Dep’t of Hum. Res. of Oregon v. Smith, 494 U.S. 872, 877, (1990). More precisely, such laws and actions would be subject to the stringent “strict scrutiny” test in assessing their constitutionality. See Church of the Lukumi Babalu Aye, Inc. v. City of Hialeah, 508 U.S. 520, 546, (1993). From this it would seem to rather clearly follow that the practice of religious arbitration must be afforded the same respect as non-religious arbitration.10See Tandon v. Newson, 141 S. Ct. 1294, 1296 (2021) (“government regulations are not neutral and generally applicable, and therefore trigger strict scrutiny under the Free Exercise Clause, whenever they treat any comparable secular activity more favorably than religious exercise”); see also Michael J. Broyde & Rachel M. Peltzer, Rethinking Religious Marriages When Done Without Any Civil Marriage: Non-Marriage, Neo-Marriage, Marriage, or Something Else?, 58 Fam. Ct. Rev. 992, 997 (2020); Michael J. Broyde, Alexa J. Windsor, In Contracts We Trust (and No One Can Change Their Mind)! There Should Be No Special Treatment for Religious Arbitration, 21 Pepp. Disp. Resol. L.J. 1, 16 (2021); Caryn Litt Wolfe, Faith-Based Arbitration: Friend or Foe? An Evaluation of Religious Arbitration Systems and Their Interaction with Secular Courts, 75 Fordham L. Rev. 427, 447 (2006) Surprisingly little has been written in clear defense of this proposition within the context of religious arbitration which, I suggest, is unassailable under existing First Amendment jurisprudence.
A more challenging issue arises if a law of general applicability were to somehow impede religious arbitration. For example, consider an act of Congress making a particular claim or right non-arbitrable. Such an action would serve to preclude both secular and religious arbitration tribunals from resolving said claim equally, thereby posing no Free Exercise Clause problem.11Congress could, however, decide to exempt religious arbitration from the act in question – permitting the claim or right arbitrable pursuant to a religious arbitration agreement. See R. Collin Mangrum, The Falling Star of Free Exercise: Free Exercise and Substantive Due Process Entitlement Claims in City of Boerne v. Flores, 31 Creighton L. Rev. 693, 738 (1998).
More aggressively, but along these same lines, some courts have invoked general public policy limitations upon religious arbitration, declining to enforce arbitration agreements “where substantive rights, embodied by statute, express a strong public policy which must be judicially enforced” and vacating awards where “testimony has been categorically excluded based on gender, race, or religion.” These same limitations have (or would have) been applied to secular tribunals, thereby evading strict scrutiny under the Free Exercise Clause. One must recognize, however, the slippery slope that this creates. Religious traditions frequently embrace norms that violate modern Western sensitivities — norms that might be incorporated into the processes of their religious tribunals. To set aside the work of such tribunals on account of this would significantly undermine the practice of religious arbitration. Nevertheless, setting aside contracts violative of public policy norms is a prerogative of the courts under narrow circumstances, and extending this prerogative to the enforcement of religious arbitration agreements — themselves a creature of contract — may be appropriate under similarly narrow circumstances.
Finally, under the Religious Freedom Restoration Act (RFRA), an individual could assert a religious liberty right to evade the constraints of even a law of general applicability. This would, for example, permit him to attempt to compel enforcement of an arbitration agreement notwithstanding the fact that the claim or right in question is one deemed non-arbitrable. To prevail under RFRA, the claimant would have to sustain the burden of demonstrating that the non-arbitrability of the claim or right in question “substantially burdens” his exercise of religion. For example, perhaps he belongs to a faith that requires the matter in question to be resolved by a religious tribunal. Having established that, the burden then shifts to the government to demonstrate that “application of the burden to the person” (in other words, refusal to compel arbitration of the matter in question, or refusal to enforce the religious tribunal’s award) is (1) “in furtherance of a compelling government interest” and (2) “the least restrictive means of furthering that compelling government interest.” The government should, presumably, have little problem demonstrating the existence of a “compelling government interest,” as such should be clear from the legislative history behind the decision to remove the matter from any potential arbitration. Whether imposing this religious belief in question constitutes “the least restrictive means of furthering that compelling government interest” is a more difficult question to decide or even opine upon in the absence of a more robust factual record (real or hypothesized). Suffice it to say, this question could only be answered via a case-by-case fact-based inquiry.12Some have argued that the Free Exercise Clause permits an individual to evade the terms of a religious arbitration agreement. See, e.g., Jeff Dasteel, Religious Arbitration Agreements in Contracts of Adhesion, 8 Y.B. On Arb. & Mediation 45, 60 (2016). As do others, I find this argument unavailing given the voluntary, contractual nature of religious arbitration. See Broyde, supra note 16, at 361.
To the extent that courts uphold arbitration agreements and enforce the decisions of arbitration panels, they must similarly respect the practice of religious arbitration. To the extent that policymakers set forth parameters and other rules concerning private arbitration, those can be applied equally to religious arbitration. The Constitution demands that the government treat religious arbitration no worse than other forms of arbitration, and it permits the government to regulate religious arbitration to the same degree it regulates arbitration generally.
Admittedly, religious arbitration poses particular challenges — especially when one contemplates the possibility of coercion or surprise on the part of a party to a religious arbitration agreement. But these challenges are not genuinely unique – they can and do appear in other contexts to a greater or lesser extent. Moreover, and critically, religious arbitration is subject to the same safeguards applicable to all forms of arbitration to help protect against these and other potential shortcomings. ♦
Ronald Colombo teaches corporate and securities law courses at Hofstra Law School. His scholarship has focused on issues ranging from securities fraud to religious liberty. Before joining the Hofstra faculty, Professor Colombo served as VP and counsel for Morgan Stanley & Co., Inc. Prior to that, he practiced at the New York office of Sullivan & Cromwell. Professor Colombo graduated, magna cum laude, from NYU School of Law. He clerked for Judge Jerry E. Smith of the Fifth Circuit.
Colombo, Ronald. “A Legal Analysis of Religious Arbitration.” Canopy Forum, April 16, 2022. https://canopyforum.org/2022/04/16/a-legal-analysis-of-religious-arbitration/.