Case 2:09-cv-039SF'"''"'I:-MAN Document 49 Filed 02/0r ~'~O Page 1 of 47

JEFFER, MANGELS, BUTLER & MARMARO LLP

MARC MARMARO (Bar No. 85242)
2 AMY LERNER HILL (Bar No. 216288)
1900 Avenue of the Stars" Seventh Floor
3 Los Angeles, California ,0067-4308
Telephone: (310) 203-8080
4 FaCSImile: (310) 203-0567
5 Attorneys for Defendant Religious Technology Center
6 ANTHONY J. ONCIDI, SBN 118135
aoncidi(al,proskauer. com
7 HAROCO M. BRODY, SBN 84927
hbrody@Droskauer.com
8 PROSKA1JER ROSE LLP
2049 Cen!UI)' Park Eas.!,. 32nd Floor
9 Los Angeles, CA 9006/-3206
Telephone: (310) 557-2900
10 FacsImile (310) 557-2193
11 ERIC M. LIEBERMAN, admitted pro hac vice
~ eliebermanfairbskl.com

d
12 RABINOWfTZiBOUDIN, STANDARD,
KRINSKY & IEBERMAN, P.C.
13 III Broadway, 11th Floor
New York, NY 10006
II 14
Attorneys for Defendant Church of SCientology International

I
15
16 UNITED STATES DISTRICT COURT
17 CENTRAL DISTRICT OF CALIFORNIA
18 EASTERN DIVISION
19 CLAIRE HEADLEY, Case No. CV 09-3987 DSF (MANx)
20 Plaintiff, MEMORANDUM IN SUPPORT
OF DEFENDANTS' JOINT
21 v. MOTION FOR PARTIAL
SUMMARY JUDGMENT
22 CHURCH OF SCIENTOLOGY
INTERNAnONA~J.rnLIGIOUS Date: April 5,2010
23 TECHNOLOGY CtlNTER, and Time: 1:30 p.m.
DOES 1-20, . Judge: Hon.TIa1e S. Fischer
24 Dept.: 840
Defendants.
25
26

27

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TABLE OF CONTENTS

2 I. INTRODUCTION AND SUMMARY OF ARGUMENT ............................ I

3
II. STATEMENT OF FACTS .......................................................................... 2
4
A. Facts Concerning Defendants and the Scientology Religion .............. 2
5
I. Scientology's Fundamental Precepts ........................................ 3
6
7 2. Training and Auditing .............................................................. 5
8 3. Scientology's Ethics and Justice System .................................. 6
9 4. Scientology's Religious Structure ............................................ 8
10
a. Churches providing religious services to parishioners .... 8
11
~ b. CJJurch of Scientology International .............................. 8
12

IiU 13

14
c.

d.
Golden Era Productions ................................................. 9

Religious Technology Center ....................................... 10

I
15 e. Recognition and tax exemption .................................... 10
16 5. The Sea Org ........................................................................... II
17
B. Facts Concerning Oaire Headley ..................................................... 12
18
I. Raised as a Scientologist, Headley Joined the Sea Org in
19
1991 ....................................................................................... 12
20
2. In 1992 Headley Was Assigned to Golden Era ...................... 13
21
3. In 1996 Headley Joined RTC ................................................. 14
22
23 III. ARGUMENT: PLAINTIFF WAS NOT COVERED BY THE
MINIMUM WAGE LAWS BECAUSE SHE DID NOT WORK FOR
24 ORDINARY COMMERCIAL BUSINESS VENTURES IN
25 COMPETITION IN THE COMMERCIAL MARKETPLACE ................. 16

26 A. FLSA Does Not Apply to Non-Commercial Activities of

Churches .......................................................................................... 16
27
28 B. California's Minimum Wage Laws Do Not Apply ........................... 25
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T ABLE OF CONTENTS
[CONTINUED]
2
3 C. Plaintiff Was Not Covered by the Minimum Wage Laws ................ 26

4 I. Plaintiff's Positions at RTC Were Religious in Nature ........... 26

5 2. Headley's Positions at Golden Era Were Religious ................ 30
6
3. As a Member of a Religious Order, Headley Was Not a
7 Covered Employee Under the Minimum Wage Laws ............ 32
8 IV. THE MINISTERIAL EXCEPTION BARS APPLICATION OF WAGE
9 AND HOUR LAWS TO HEADLEY'S labor FOR CSI AND RTC ........... 34

10 V. CONCLUSION ......................................................................................... 39
11
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TABLE OF AUTHORITIES
1
Page(s)
2
3 CASES

4 Alcazar v. Catholic Archbishop of Seal/Ie,

5 2006 WL 3791370 (W.D. Wash., Dec. 21, 2006).............................. 2,35,36

6 Alicea-Hernandez v. Catholic Bishop of Chicago,

7 320 F.3d 698 (7th CiT. 2003) ....................................................................... 36

8 Ashwander v. Tenn. Valley Authority,

9 297 U.S. 288 (1936) ................................................................................... 26

10 Boekemeier v. Fourth Universalist Society in the City of New York,

1! 86 F. Supp. 2d 280 (S.D.N.Y. 2000) .................................................... 22, 23
~
12
"II! 13
Bowrin v. Catholic Guardian Society,
417 F. Supp. 2d 449 (S.D.N.Y. 2006) ................................................... 22, 23

U 14 Bureerong v. Uvawas,
922 F. Supp. 1450 (C.D. Cal. 1996) ............................................................ 25

I
15
16 Catholic Charities of Sacramento, Inc. v. Superior Court,
17 32 Cal. 4th 527 (2004) ............................................................................ 2,34

18 Dole v. Shenandoah Baptist Church,

19 899 F.2d 1389 (4th CiT. 1990) ......................................................... 19,33,35
20 EEOC v. Catholic University ofAmerica,
21 83 F.3d 455 (D.C. CiT. 1996) ...................................................................... 36

22 EEOC v. Roman Catholic Diocese of Raleigh, NC,

23 213 F.3d 795 (4th CiT. 2000) ............................................................. 2, 35, 36
24 EEOC v. Southwest Baptist Theological Seminary,
25 651 F.2d 277 (5th CiT. 1981) ................................................................. 36,37
26 Elvig v. Calvin Presbyterian Church,
27 375 F.3d 951 (9th CiT. 2004) ................................................................... 2, 34
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TABLE OF AUTHORITIES
1
Pagels)
2
3 FLSA. Brieffor the Department ofLabor,
1985 WL 669832 .............................................................. '" ................. 20, 32
4
5 Hollins v. Methodist Healthcare, Inc.,
474 F.3d 223 (6th Cir. 2007) ................................................................... .35
6
7 Holy Spirit Association for the Unification of World Christianity v. New York
City Tax Commissioner,
8 55 N.Y.2d 512, 450 N.Y.S.2d 292 (1978) ................................................... 29
9
Hope International University v. Superior Court,
10 119 Cal. App. 4th 719 (2004) ........................................................ 36, 37, 38
11
~ IBP, Inc. v. Alvarez,

d
12 546 U.S. 21 (2005) ...................................................................................... 21
13
Lemon v. Kurtzman,
U 14 403 U.S. 602 (1971) ................................................................................... 24

I
15
Lewis v. Holy Spirit Association,
16 589 F. Supp. 10 (D. Mass. 1983) ................................................................ 25
17
McClung v. Employment Development Department,
18 34 Cal. 4th 467 (2004) ............................................................................... 26
19
McClure v. Salvation Army,
20 460 F.2d 553 (5th Cir. 1972) ................................................................. 34, 37
21
Mitchell v. Pilgrim Holiness Church Corp.,
22 210 F.2d 879 (7th Cir. 1954) ................................................................ 23, 24
23
Murdock v. Pennsylvania,
24 319 U.S. 105 (1943) .................................................................................... 30
25
Murdock v. Pennsylvania,
26 343 U.S. at 111 ........................................................................................... 31
27
28
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TABLE OF AUTHORITIES
Page(s)
2
3 Murray v. The Charming Betsy,
6 U.S. (2 Cranch) 64 (1804) ........................................................................ 26
4
5 Myers v. Philip Morris Cos.,
28 Cal. 4th 828 (2002) ................................................................................ 26
6
7 NLRB v. Catholic Bishop of Chicago,
440 U.S. 490 (1979) .............................................................................. 24,26
8
9 National Credit Union Admin. v. First National Bank & Trost Co.,
522 U.S. 479 (1998) .................................................................................... 21
10
11 Paul v. Watchtower Bible & Tract Society ofNew York,
~ 819 F.2d 875 (9th CiT. 1987) ....................................................................... 29

1~
12
13 Ramirez v. Yosemite Water Co.,
20 Cal. 4th 785 (1999) .............................................................................. 37
U 14
Rayburn v. General Conference of Seventh-Day Adventists,

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15
772 F.2d 1164 (4th Cir. 1985) ........................................................... 2,36,38
16
17 Roman Catholic Archbishop ofLos Angeles v. Superior Court,
13l Cal. App. 4th 417 (2005) ..................................................................... 34
18
19 Rosati v. Toledo, Ohio Catholic Diocese,
233 F. Supp. 2d 917 (N.D. Ohio 2002) ....................................................... 38
20
21 Ross v. Metropolitan Church of God,
471 F. Supp. 2d 1306 (N.D. Ga. 2007) ........................................................ 36
22
23 Schleicher v. Salvation Army,
518 F.3d 472 (7th CiT. 2008) ................................................. 2, 19,24,33,35
24
25 Schmoll v. Chapman University,
70 Cal. App. 4th 1434 (1999) ............................................................... passim
26
27 Serbian Eastern Orthodox Diocese v. Milivojevich,
426 U.S. 696 (1976) .............................................................................. 28, 29
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TABLE OF AUTHORITIES
Page(s)
2
3
Shaliehsabou v. Hebrew Home of Greater Washington,
4 363 F .3d 299 (4th Cir. 2004) ................................................................ passim
5
Silo v. CHW Medical Foundation,
6 27 Cal. 4th 1097 (2002) .............................................................................. 35
7
Smith v. Raleigh District of the North Carolina Conference of the United
8 Methodist Church,
9 63 F. Supp. 2d 694 (E.D.N.C. 1999) ........................................................... 37

10 Tony and Susan Alamo Foundation v. Secretary of Labor,

II 471 U.S. 290 (1985) ............................................................................. passim
~

~J
12 Turner v. Unification Church,
I .. 13 473 F. Supp. 367 (D.R.I. 1978), affd, 602 F.2d 458 (1st CiT. 1979) 18, 24, 25

d 14 Van Schaick v. Church of Scientology of Cal.,

~
15 535 F. Supp. 1125 (D. Mass. 1982) ........................................................ 18,24

16 Walling v. Portland Terminal Co.,

17 330 U.S. 148 (1947) .................................................................................... 24

18 Watchtower Bible & Tract Society of New York v. Village of Stratton,

19 536 U. S. 150 ............................................................................................... 3 0

20 Weishuhn v. Catholic Diocese of Lansing,

21 756 N.W.2d 483 (Mich. Ct. App. 2008) ...................................................... 37

22 Werft,
23 377 F .3d at 1104 ......................................................................................... 38

24 CODES AND STATUTES

25
29 C.F.R.
26 Section 779.214 .............................................................................. 18, 22, 32
27
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TABLE OF AUTHORITIES
Page(s)
2
3 Labor Code
Section 3352(b )........................................................................................... 25
4
5
26U.S.C.
6 Section 501(c)(3) ........................................................................................ 10
7
29 U.S.c.
8 Section 207 (emphasis added) ..................................................................... 21
9
106 Congo Rec. 16703 ........................................................................................... 17
10

11 107 Congo Rec. 6255 (1961) ........................................................................... 17, 20

~

. ~
~
12 112 Congo Rec. 11371 (1966) ............................................................................... 19
f; 13
H.R.Rep. 75, 87th Cong. 1st Sess. 8 (1961) .......................................................... 17
U 14
IRS Rev. Proc. 91-20, 1991-10 LR.B. 26 .............................................................. 33

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15
16 S. Rep. 86-1744, 86th Congo 2d Sess. 28 (1960) ................................................... 17
17
S. Rep. 87-145, 87th Congo 1st Sess. 41 (1961) .............................................. 17, 20
18
19
OTHER AUTHORITIES
20
21 Wage and Hour Division, U.S. Department of Labor, Field Operations
Handbook
22 Section 10b03(b) ................................................................................... 19, 33
23
Am. Jur. 2d Social Security and Medicare
24
Section 613 (2009)(adopting IRS definition) .............................................. 34
25
26
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I. INTRODUCTION AND SUMMARY OF ARGUMENT

2 Plaintiff Claire Headley was a follower of the Scientology religion for her
3 entire life Wltil she left the church in January 2005. Her mother and stepfather were
4 Scientologists, and, by her admission, she was brought up to believe and ,believed in
5 the concepts, principles and theology of Scientology. In 1991, at the age of 16 and
6 with the written consent of her parents, Headley joined the Sea Organization, an elite
7 religious order of the Scientology religion whose members dedicate their lives to
8 service to the Scientology religion without expectation of monetary compensation.
9 For the next fourteen years, Headley worked as a volunteer staff member for
10 defendants Church of Scientology International ("CSJ") and Religious Technology
11 Center ("RTC"), including as a senior ecclesiastical official of the Scientology
~
~ 12 religion. Her primary duties were church management and governance, supervising
... ~
l~ 13 the provision of Scientology courses, the provision of Scientology religious services
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14 and the application of Scientology ethics to Sea Org members who were staff

~
15 members of CSI or RTC. At no time were Headley's church positions directed to
16 commercial activities in competition with other commercial businesses.
~ 17 Having left the church in 2005 and renounced her former religious
18 commitment, Headley now asserts in her first claim for relief that she should have
19 been paid minimum wages and overtime for her nearly fourteen years of voluntary
20 service to the defendants as a Sea Org member. Her claim must be rejected as a
21 matter of law, for two independent but doctrinally related reasons.
22 First, as this court held in the case brought by Marc Headley, Claire Headley's
23 husband, the federal and California minimum wage statutes do not apply to the
24 voluntary, non-commercial, and religious activities of the staff of a church or non-
25 profit religious organization. The activities of the staff of such organizations are
26 subject to coverage under the applicable minimum wage statutes only to the extent
27 that such activities are in furtherance of an ordinary business purpose and in
28 competition with the activities of other businesses. Claire Headley's positions with
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CSI and RTC involved responsibilities which in no manner or respect could be

2 considered ordinary competitive business activities.
3 Second, Claire Headley's positions and responsibilities with CSI and RTC
4 must be excluded from coverage under the minimum wage statutes under the
5 "ministerial exception" to statutes regulating employment. Elvig v. Calvin
6 Presbyterian Church, 375 F.3d 951, 960-61 (9th Cir. 2004); Catholic Charities of
7 Sacramento, Inc. v. Superior Court, 32 Cal. 4th 527, 543-44 (2004); Schmoll v.
8 Chapman Univ., 70 Cal. App. 4th 1434, 1442-44 (1999). The ministerial exception is
9 mandated by the First Amendment and bars application of minimum wage laws to a
10 church's relationship with those coming within the exception. Alcazar v. Catholic
11 Archbishop of Seattle, 2006 WL 3791370, at *7 (W.O. Wash., Dec. 21, 2006)
~
12 (exception applies to state minimum wage law); Schleicher v. Salvation Army, 518
}! 13 F.3d 472, 478 (7th Cir. 2008); Shaliehsabou v. Hebrew Home of Greater Washington,
~~ 14 363 F.3d 299,305 (4th Cir. 2004). The exception applies to all church workers
-'"

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15 whose "primary duties consist of teaching, spreading the faith, church governance,
16 supervision of a religious order, or supervision or participation in religious ritual and
17 worship," or "is important to the spiritual and pastoral mission of the church."
18 Rayburn v. Gen. Conference ofSeventh-Day Adventists, 772 F.2d 1164, 1168-69 (4th
19 Cir. 1985); EEOC v. Roman Catholic Diocese of Raleigh, NC, 213 F.3d 795,803 (4th
20 Cir. 2000) (quoting Rayburn); Schmoll, 70 Cal. App. 4th at 1439 (quoting Rayburn).
21 That definition reads as if it were devised precisely to apply to Claire Headley's
22 positions at CSI and RTC.
23 II. STATEMENT OF FACTS
24 A. Facts Concerning Defendants and the Scientology Religion
25 The Declaration of Warren McShane sets forth a detailed description of the
26 origins, nature, theology, practice and organization of the Scientology religion. The
27 Declaration of Dr. Frank Flinn, an expert on comparative religion, provides comparisons
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of Scientology's religious order, the Sea Org, with religious orders of other religions, both
2 eastern and western. We summarize those showings here.
3 1. Scientology's Fundamental Precepts
4 The Scientology religion is based upon the research, writings and lectures of its
5 Founder, L. Ron Hubbard. (SUF' I.) All ofMr. Hubbard's writings and lectures on
6 Scientology constitute the Scripture of the religion, and are the source of the beliefs,
7 practices, rituals and policies of the religion. (SUF 1-2.) They encompass more than
8 300 books and other writings, thousands of written bulletins and policy letters about
9 the religion, over 3,000 recorded lectures and numerous religious instruction films.
10 (SUF 2.) The doctrine and practices of the Scientology religion are known as
11 Scientology's religious "technology." (SUF 16.) Many of the scriptural writings of
~
C 12 Scientology are contained in two multi-volume collections of Mr. Hubbard's
... ~
f= 13 writings: The Technical Bulletins ofDianetics and Scientology ("The Technical
U 14 Bulletins "), which sets forth the religious technology, and The Organization Executive

I
15 Course ( "The OEC "), which includes numerous policies developed specifically for the
16 management of Scientology churches to further the expansion and dissemination of
17 Scientology pursuant to its ultimate goal to "Clear the Planet", a concept described
18 below. (SUF 3-4, 12-13.)
19 The basic tenet of Scientology is that man is an immortal spiritual being, called
20 a "thetan" (from the Greek "theta" meaning "spirit"), who has the potential of infmite
21 survivaL A thetan has had one continuous life; while his or her innumerable physical
22 bodies have died over time, his or her life experience never stops. A thetan is
23 inherently good, with infinite spiritual capability. However, over eons, thetans have
24 lost their spiritual identity and native ability. Only through exploration of their pasts can
25 thetans overcome the negative experiences that affect and reduce their inherent spiritual
26 ability. (SUF 5,6.)
27 I References to "SUF_" are to paragraphs in the Statement of Uncontroverted Facts.
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Scientology posits the existence of the ''reactive mind." Scientologists believe that
2 during moments of pain and partial or full unconsciousness, the reactive mind makes a
3 fun "mental image picture" of everything taking place. These are calIed "engrams."
4 While the reactive mind retains these engrams, both from current and past physical
5 lifetimes, a thetan is not aware ofthern. These engrams, however, affect one's behavior,
6 are the source of irrationality, fear and psychosomatic illness, and impede spiritual
7 enlightenment. (SUF 7-8.)'
8 Scientology seeks to remove the effects of engrams through the practice of
9 aUditing, described below. When one has eliminated the reactive mind, one is caIled
10 "Clear." Beyond that, one must travel the path to fun spiritual ability and freedom,
II caned "Operating Thetan" or "OT." This path is known as The Bridge to Total
~

~I 12 Freedom (''The Bridge"), and is represented in the Classification, Gradation and

f; 13 Awareness Chart (the "Grade Chart"). When enough people have attained the state
H
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14 of "clear" and above, the entire planet will be cleared, and the ultimate Scientology

~
15 goal of "a civilization without msanity, without criminals and without war ... " win
16 be achieved. This concept is called "Clearing the Planet." (SUF 10-12.)
17 Scientologists believe that the dynamic principle of existence is to "Survive!" This
18 principle is compartmented into eight parts, which Scientology refers to as the "eight
19 dynamics": I) Self, the effort to survive as an individual; 2) Family; 3) Groups, such as a
20 community, friends, a company, a nation; 4) Mankind; 5) Life forms, including animals
21 and plants; 6) The physical universe, encompassing matter, energy, space and time; 7)
22 The spirit, the urge to survive as spiritual beings; 8) infinity, including a supreme being.
23
2 The concepts of engrams and the reactive mind were first set forth in Mr. Hubbard's
24 writings on "Dianetics", which he later defined as "What the soul is doing to the body." As
explained by Rev. McShane, "The practices described in Diane/ies led to the phenomena of
25 individuals recalling past lives. This was soon followed by the phenomenon of exteriorization from
the body and Mr. Hubbard came to the inescapable conclusion that the 'I' referred to in Diane/ies
26 was the human spirit. This discovery marked the evolution ofDianetics to Scientology. Today,
Dianetics is considered to be the forerunner of and part of Scientology, since the discoveries of
27 Scientology clarify and amplify the subject of Dianetics." (SUF 9.)
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A thetan's spiritual advance in Scientology is represented as one's expansion across all

2 dynamics, addressing every facet of a thetan's existence as necessary to achieving
3 spiritual salvation. (SUF 14.)
4 2. Training and Auditing
5 One advances along The Bridge to higher levels of spiritual awareness as
6 represented on the Grade Chart by participation in Scientology's core religious
7 practices: "training" and "auditing." Training involves the study of the Scripture
8 through Scientology religious courses. Auditing usually is ministered in confidential
9 one-on-one sessions between a specially trained individual called an auditor and a
10 parishioner. Auditing uses "processes": exact sets of questions asked or directions
11 given by an auditor to help a person locate areas of spiritual distress. (SUF 15-18.)
~
12 Auditing is supervised by a trained Case Supervisor, whose role is to see that the
JOt
f~ 13 auditing is ministered in a correct orthodox manner. (SUF 19.) In auditing, the
U 14 auditor uses a device called an "E-Meter," which Scientologists believe helps the

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15 auditor and the parishioner locate areas of spiritual distress. (SUF 20.) Dr. Flinn
16 provides some comparative context (Flinn Decl., ~ 47-48)':
17 To the Scientologist, the E-meter is what religions around
the world call a sacramental. In Scientology training and
18
auditing are the key sacraments. Objects used in assisting
19 training and auditing-most especially the E-meter-are
20 sacramentals. Thus the E-meter is fully comparable to the
sacred utensils and vestments used in Roman Catholicism
21 (chasubles, chalices, monstrances, patens, censors, etc.) or
22 in Buddhism (incense burners, hand cymbals, mandalas,
diamond Vajra scepters, etc.). In Scientology, the use ofthe
23 E-meter is essential to ensure that the technology has been
24
, In accordance with the Court's Standing Order, when referring the court to those material
25 facts upon which the motion is based, defendants cite to the numbered paragraphs in the Statement
of Uncontroverted Facts, rather than the underlying evidence. However, with respect to facts that
26
are not included in the Statement and are provided for context only, defendants cite to the
underlying evidence. Defendants believe that such facts and evidence, although not necessary to
27 determine this motion, will provide the court with helpful background information.
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1 delivered precisely and exactly as L. Ron Hubbard

determined in his writings and communications.
2
3 To the skeptic, the consecrated bread and wine in the
Roman Catholic Eucharist is just chemical wine and bread
4 over which someone said prayers. To the devout Roman
5 Catholic and Eastern Orthodox communicant, that bread
and wine are the Body and Blood of their Savior. To the
6 skeptic, the E-meter is measuring electrical charges given
7 offby sweat in the palms of the hands. To the devout
Scientologist the E-meter is indicating spiritual states of the
8 soul-- whether an engram or other impediment remains or
9 whether the person is free to proceed upward to the next
spiritual stage on the Bridge to Freedom.
10

11 Scientology includes policies and procedures, compiled in The DEC, to correct

~
12 staff who make mistakes ("flub") on post and err in the application of the Scripture.
--I
h 13 The Qualification Division exists in each church "[t]o find and restore lost tech and

iJ 14 safeguard knowledge; to ensure the technical honesty and results of Scientology and

~
15 Dianetics, correct them when needful and attest to them when attained." Among the

16 positions in the Division are "Cramming Officers," who are specially trained,

17 pursuant to scripture in The Technical Bulletins, to "isolate and correct real causes of

18 staff and student misapplication of technology or policy." The Cramming Officer

19 "teaches students what they have missed." "Cramming is the key to f1ubless

20 auditing." (SUF 21-22.)

21 3. Scientology's Ethics and Justice System

22 Central to the SCientology religIOn is its system of ethics and justice,

23 summarized in the book, Introduction to Scientology Ethics (SUF 24.) An essential

24 precept of the Scientology religion is that if one has acted unethically, one carmot

25 achieve spiritual progress, and will act in a manner contrary to the survival of oneself,

26 one's family, one's group and all mankind, i.e., across all "dynamics." In

27 Scientology, such a harmful unethical act is referred to as an "overt," a concept

28 analogous to that of sin in western religions. In Scientology, however, an overt may

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be a transgression in a past lifetime, consistent with Scientology beliefs in the concept

2 of past lifetimes. Once a person commits an overt act, he or she will often withhold
3 from others the commission of that act. This is called a "withhold." A person with
4 accumulated overts and withholds is incapable of spiritual progress and will not
5 benefit from auditing or training. (SUF 24.)
6 Scientology scriptures set forth techniques, called "Confessionals" (sometimes
7 called "Security or Sec Checking"). Mr. Hubbard wrote that Confessionals are
8 intended to address the harmful effects of overts and withholds and to rehabilitate an
9 individual's personal integrity and ability to achieve "case gain," i.e., spiritual
10 progress, not only for the individual but also for the family and groups with which
11 one associates. (SUF 25.) Most ofthese writings are collected in The Technical
~
~ 12 Bulletins, and are, as Headley acknowledges, "part of the Scientology belief system"
JO~
,~ \3 (SUF 29.) Confessionals are conducted with an E-meter, and follow concepts and
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-'"
14 procedures developed by Mr. Hubbard. (SUF 30.)

~
15 One form of Confessional is intended solely to help individuals unburden
16 themselves of past transgressions. As stated in Mr. Hubbard's bulletin "Confessional
17 Procedure," such a Confessional is considered "auditing and is kept confidential."
18 "When the Confessional is fully completed, the auditor who has administered the
19 Confessional informs the person he is forgiven for the overts and withholds he has
20 just confessed." As Ms. Headley testified, this form of Confessional is "c1ose[] to the
21 Roman Catholic confessional whcre at the end you tell the person you're forgiven for
22 what you've confessed to." (SUF 26.)
23 A second form of Confessional, called a Hubbard Communications Office
24 ("HCO") Confessional, is part of the Scientology Justice system Within RTC and
25 CSI, it is applied to Sea Org members who may have committed "overts" or
26 "withholds" against the rules of the Order. (SUF 27.) They are similar to practices
27 within Buddhist and Catholic religious orders which have strict codes of conduct and
28 provide for public confessions and punishments for those who infringe the rules of
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1 the order_ (See Flinn Decl., ~ 10, 15-15,23,28.) In the Sea Org, if a member has
2 committed overts against the Rules, he or she may be called before a Committee of
3 Evidence, which can impose disciplinary action. As stated in "Confessional
4 Procedure," HCO Confessionals are conducted in the same way as regular
5 confessionals. The only difference is that ethics officers start an HCO Confessional
6 session by saying, "I am not auditing you," because it is a Scientology justice action
7 and can be used as a basis to impose discipline upon errant members of the Order.
8 (SUF 27.) The use and method of such Confessionals is also set forth in The
9 Technical Bulletins and The DEC, and is a practice of the religion. (SUF 29.)
10 4. Scientology's Religious Structure
11 a. Churches providing religious services to parishioners
~

~i 12 Scientology Missions provide lower-level aUditing. Scientology Churches

h 13 provide auditing to the state of "Clear" and training through Class V auditor (and thus
d 14 are known as "Class V Churches"). The Advanced Churches provide training and

-I 15
16
17
auditing for the higher levels of Scientology auditing and training, known as the OT
levels. The Church of Scientology Flag Service Organization ("FSO") provides the
higher levels of training and auditing services except the highest OT level, which is
18 provided only at the Advanced Church located on the motor vessel Freewinds. (SUF
19 31.)
20 b. Church of Scientology International
21 The Scientology religious structure is hierarchical. Overall ecclesiastical
22 management of the Scientology religion is exercised principally by CSI. CSI is
23 denominated the "Mother Church," and is dedicated to the advancement and
24 dissemination of the religion. CSI oversees the administration of all Scientology churches
25 and missions, disseminates the beliefS and practices of Scientology and provides religious
26 services and training to its own staff members. (SUF 32.)
27
28
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I c. Golden Era Productions

2 Golden Era Productions is a division of CSI. It plays a vital role in CSI's
3 propagation, dissemination and expansion of the Scientology faith through the
4 compilation and dissemination of the teachings of Mr. Hubbard. As Ms. Headley
5 testified, "Golden Era is the dissemination org[anization] of Scientology." (SUF
6 33.) Golden Era creates films, videos and other media about Scientology that are
7 used to introduce the religion's basic concepts to the general public and to explain
8 and depict different aspects of the Scientology religion that are vital to the training of
9 auditors. Golden Era also creates audio/visual materials for use in proselytizing the
10 faith. (SUF 35.)
11 A long-term goal of Golden Era has been to make Mr. Hubbard's 3,000
~
12 Scriptural lectures available on cassette and compact discs. (SUF 34.) Mr. Hubbard
AJ
I. 13 recorded these lectures in the 1950's and 60's, but most of these recordings

U 14 physically deteriorated over the years. The large number of these lectures and the

l
15 technical difficulties incumbent upon restoring films and tapes made over forty years
16 ago, as well as the number of languages into which the lectures must be translated,
17 have created an enormous amount of work for Golden Era. (SUF 34.) Just as
18 medieval monks once toiled copying bibles and tracts by hand, weaving religious
19 tapestries, and illustrating religious works and bibles: Sea Org members at Golden
20 Era toil to preserve Scientology's scriptures. The methods are different, but the
21 purpose is not: to disseminate and spread the religion.
22
23
24 • "During the Middle Ages monasteries and nunneries spent endless hours creating
illuminated manuscripts of the Bible, massive tapestries showing dramatic biblical scenes, and
25 designs for the sculptures and stained glass windows gracing countless cathedrals from Sicily to
England. [Examples omitted.] To the illiterate commoners of the times these images were, as
26 numerous historians of religious art have described them, the 'Bible in Stone, on Parchment, and in
Colored Glass.' ... [T)o the devout monk or nun this was holy work and as fully a part of the Opus
27 Dei or 'Work of God,' ... , as chanting the Divine Office of the Hours, or praying and meditating."
Flinn Dec., ~ 26.
28
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d. Religious Technology Center

2 Religious Technology Center is responsible for insuring the orthodox practice
3 of the religion and the eternal preservation, transmission and application of
4 Scientology doctrine and practices. For that reason, only individuals who have
5 demonstrated an exceptionally high level of dedication to Scientology are accepted as
6 staff members. RTC acts with great diligence since the Church believes that it is vital
7 to maintain the precise, correct application of Scientology religious practices. In
8 doing so, if necessary, RTC will take appropriate action, including imposing church
9 discipline, to insure that churches and clergy comply strictly with church writings and
10 directives. (SUF 37.)'
II In addition, RTC provides auditing, training, ethics counseling and
~
12 confessionals, cramming and other religious practices to its own staff, and to the
"II; 13 senior management staff of CSI and the staff members of Golden Era Productions,
U 14 both of which are located on the same physical premises as RTC in Gilman Hot

i
IS Springs, California. (SUF 38, 87, 89.) The Gilman property is often referred to as
16 the International Base. (SUF 37.)
17 e. Recognition and tax exemption
18 The United States Internal Revenue Service, after conducting an extensive and
19 thorough review and audit ofCSI, RTC, and other Scientology churches, recognized
20 them all as tax-exempt churches under 26 U.S.c. § 501(c)(3). (SUF 47.) Inherent in
21 such recognition, as stated in the statute, the IRS found that the activities of CSI and
22 RTC and all Scientology churches are exclusively in furtherance of their exempt,
23 religious purpose and are not commercial in nature.'
24
, As stated by Dr. F1ilUl, RTC's role is similar to that played by the Congregation for the
25
Doctrine of the Faith in the Vatican, which enforces religious orthodoxy upon Catholic clergy and
laity. (FlilUl Decl., ~ 43.) Before becoming Pontiff, Pope Benedict was the Director of the
26
Congregation for the Doctrine of the Faith.
27
, The IRS' review ofCS! ineluded examination of Golden Era's operations. The IRS found
all these activities furthered Scientology's religious mission and did not constitute commercial
28
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5. The Sea Org

2 All CSI and RIC staff, as well as the staff members ofthe Advanced Churches,
3 belong to the Scientology religious order known as the Sea Organization, or Sea Org.
4 (SUF 39, 41.) To qualifY to join the Sea Org, a Scientologist must undertake extensive
5 training and study, pass a fitness examination, and receive certification that he or she
6 is qualified for the rigors of Sea Org life. (SUF 42.) Sea Org members sign a
7 symbolic commitment of one billion years, reflecting their dedication to service III

8 furtherance of the Scientology religion and the salvation of humanity and their
9 awareness of themselves as immortal spiritual beings. Because of this commitment,
10 it is exclusively from the Sea Org that the senior leadership of Scientology is drawn,
II including the entire staff of senior management and Advanced Scientology churches.
~
~ 12 (SUF 41.) They subscribe to The Code o/a Sea Org Member, which contains vows

U 13 that are repeated at Sea Org ceremonies that take place annually. Among the vows
U 14 are "I promise to use Dianetics and Scientology for the greatest good for the greatest

~
15 number of dynamics," and "I promise to take responsibility for the preservation and
16 the continued full and exact use of the technologies of Dianetics and Scientology."
17 (SUF 42.)
18 Sea Org members serve without expectation that they will receive material
19 compensation, a fact they acknowledge in writing before becoming members and when
20 they periodically repeat their vows. (SUF 41-43, 45.) They share tradition and lifestyle.
21 They wear uniforms when on duty and have a merit-based maritime rank and rating
22 system and etiquette. Sea Organization members live communally and eat in
23 common dining halls. All living necessities are provided - berthing, food, uniforms,
24 transportation, medical, dental, etc. Additionally, they generally receive a small
25 weekly allowance for personal incidentals, but are not paid a salary and do not expect
26
activity. Additionally, the property tax authorities of Riverside County, where Golden Era is
located, extensively examined all production facilities, offices and living accommodations and
27
found them all to be exempt from property tax because their used was purely religious. (SUF 48.)
28
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I one. (SUF 44.) After surrnnarizing these attributes of the Sea Org, Dr. Flinn concludes
2 that "[t]his level of commitment is typical of religious orders throughout history" and that
3 the Sea Org has all the attributes of religious orders around the world:
4 All of these types of religious activities Scientology shares
with members of religious orders around the world. This
5
spiritual communal life allows the Sea Organization to
6 fulfill its high religious mission, the preservation and
transmission of the teachings of1. Ron Hubbard and the
7
careful and exact preservation and delivery of the training
8 and auditing technology.
9 (SUF 46.)
10
The United States Department of Homeland Security has found "that the Sea
11
~ Org qualifies as a religious order [under written federal guidelines], and that its
12
JOE members practice a religious vocation," thereby permitting Sea Org members to enter
f; 13
the country under that rubric. The Inland Revenue Department of the United
U 14
Kingdom likewise has found that the Sea Org is a religious order and that "members

~
15
of the Sea Organization are not workers as defined by [applicable British statutes]
16
and that the National Minimum Wage Act does not appear to apply" to Sea Org
~ 17
members. (SUF 40.)
18
B. Facts Concerning Claire Headley
19
1. Raised as a Scientologist, Headley Joined the Sea Org in 1991
20
Claire Headley's mother was a Sea Org member when Claire was a young
21
child, and remains a Scientologist to this day. Claire's stepfather also was and is a
22
Scientologist. (SUF 49.) Like most children of other faiths, she was raised in the
23
faith of her parents, and was taught and accepted the theology and doctrine of the
24
Scientology religion. (SUF 50.) At the agc of 16, with her parents' written
25
pennission, she joined the Sea Org. She understood at the time what the lifestyle of a
26
Sea Org member entailed, including wearing uniforms, living communally, working
27
long hours, and receiving a small allowance, because her mother, uncle and cousins
28
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had all been Sea Org members, and it was "pretty much alii knew as a lifestyle."
2 (SUF 52.) Upon joining, she signed a declaration of religious commitment to the Sea
3 Org, which stated that she volunteered her services "to create a better world, not in
4 contemplation of receiving any compensation whatsoever, and ... forsaking all
5 commercial and financial motivation." (SUF 53.) She restated this commitment to
6 volunteer her services to the Sea Org and the religion without expectation of
7 compensation upon becoming a staff member ofRTC in 1996. (SUF 74-77.)
8 Headley remained a member of the Sea Org until she left the church in January
9 2005. During that period, she believed she was furthering the goals of Scientology.
10 She believed that the purposes of the Sea Org included to "clear the planet." She
11 regularly recited the Code of a Sea Org Member at ceremonies that took place
~

·1f~ 12
13
annually. Among the vows she took were: "I promise to use Dianetics and
Scientology for the greatest good for the greatest number of dynamics," and "I
U 14 promise to take responsibility for the preservation and the continued full and exact

i
15 use of the technologies of Dianetics and Scientology." (SUF 54-55.)
16 2. In 1992 Headley Was Assigned to Golden Era
17 Headley assumed her first position at Golden Era in February 1992. She remained
18 at Golden Era for four years. Her positions all involved the teaching ("supervision") of
19 Scientology religious courses and/or the provision and application of Scientology
20 practices to the staff members of Golden Era. (SUF 60.)
21 Thus, from February-October 1992, January 1993-June 1994 and again from
22 October 1994-April 1995, Headley was a Supervisor for the Key to Life and Life
23 Orientation courses at Golden Era. The Key to Life Course was designed by and
24 created from Scientology writings of Mr. Hubbard. (SUF 65.) It addresses the
25 fundamentals oflanguage and communication, and involves a process that helps its
26 participants cope with their every-day lives better, which is one of the aims of
27 Scientology. (SUF 66-67.) In the Life Orientation Course, one studies the Eight
28 Dynamics and applies them to life purposes and activities. (SUF 68.) Both courses
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involve the auditing of students. (SUF 66, 71.) Headley was trained as and became a
2 supervisor of the courses.' From May-December 1995, she was the Lead Supervisor.
3 (SUF 65.) In the interim period from June-October 1994, Headley was "Auditor
4 Gold," i.e., auditor for the staff members at Golden Era. (SUF 72.)
5 3. In 1996 Headley Joined RTC
6 In March 1996, Headley assumed a staff position at RTC, where she remained for
7 over eight years. (SUF 73.) Upon doing so, she executed a Declaration of Religious
8 Commitment to a "religious order" without expectation of "monetary gain or other
9 traditional commercial or financial motives or incentives." (SUF 74-77.) Each of the
10 positions Headley held while at RTC involved either govemance ofRTC, the supervision
11 of Scientology courses, the provision of Scientology services, or the supervision and
~
~
. ~
12 correction of the provision of such services, all as set forth in the writings and lectures of

t~ 13 Mr. Hubbard and compiled in The Technical Bulletins and The DEC. (SUF 73, 89-9.0.)
~.i
~.li 14 For example, immediately after joining RTC, Headley was assigned to an RTC

~
15 post at the Church of Scientology Flag Service Organization ("FSO") in Florida to
16 supervise execution of a program for the training of the Supervisors for the release of
...... 17 the "Golden Age of Tech," which she describes as "a major event within the church"
18 consisting of "revisions of all the Scientology courses or a good majority of them."
19 (SUF 78, 8.0-81.) Ms. Headley was trained on the administration of the new Golden
20 Age of Tech courses, including the function of making sure "that the respective
21 people involved in execution of that program were doing their specific assigned
22 duties as part of that program." (SUF 82.) She inspected course rooms and corrected
23
7 Headley was required to complete training for each course she supervised. Her training
24
was set forth in explicit step-by-step procedures; each step required Headley to study specific
relevant bulletins or policy letters written by Mr. Hubbard and contained in The Technical Bulletins
25
or The DEC. For example, the training for The Key to Life included studying such bulletins as
"The Auditor's Code," "Auditor Trust", and "The Factors" (a key part of Scientology scripture).
26
Training for the Life Orientation Course included studying Hubbard bulletins on "AUditing by
List", "Overt!Withhold Write·Ups," "Repairing Past Ethics Conditions," and "Life Orientation
27
Repair List," as well as E-meter training. (SUF 62, 63, 66, 68.)
28
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students and supervisors. (SUF 80.) In addition, while she was at FSO, Ms. Headley
2 oversaw the provision of the Flag Metering Course, in which "students were studying
3 to learn use of the E-meter." (SUF 83.)
4 In early 1997, Ms. Headley returned to the International Base where she was
5 posted as "Director AVC [Authorization, Verification, and Correction] Correction,"
6 which she held for almost three years. (SUF 84-85.) Prior to assuming this position,
7 Headley undertook a training course that required her to read and analyze numerous
8 bulletins and policy letters written by Mr. Hubbard and contained in both multi-volume
9 series. Foremost among them was a policy stating that the purpose of her position was
10 "to ensure the results of Scientology, correct thern when needful and attest to them when
11 attained." (SUF 86.) While holding this post, Headley trained and acted as a Crannning
~

~~ 12 Officer, and also trained and supervised RTC trainees. (SUF 89.)
tI:
& .. 13 From March 2000-September 2004, Headley held the position of Internal
U 14 Executive RTC, for which she also undertook training that included reading and

I
15 mastering numerous writings contained in The Technical Bulletins and The OEC.
16 This position is in charge ofRTC's internal operations, and is a senior position in
17 RTC's ecclesiastical governance. (SUF 90.) Headley wrote the description of this
18 position's purpose: "To observe, supervise, plan and execute the expansion,
19 effectiveness, production, training, hatting, correction, and establishment of the
20 organization, resulting in an established organization accomplishing its purpose ... "
21 (SUF 90.) When Headley was posted as Internal Exec for RTC, her duties and
22 functions included quality control related to reviewing issues and programs within
23 RTC, and undertaking programs within RTC to get the organization operating
24 according to RTC policies and procedures. (SUF 91.)
25 During the same period that she was Internal Exec RTC, Headley also "held from
26 above" (meaning held while the lower position was vacant) the position ofEnhancernent
27 Officer RTC, which is in charge of the provision of Scientology religious services and
28 practices to RTC staff. (SUF 92- 94.) Headley also wrote the description of this
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position's pUIpOse: "[tlo ensure that all staff make excellent training and case
2 progress, that the organization is reviewed and corrected, and that the application of
3 the technologies of ethics, tech and admin are standardly applied within the
4 organization, resulting in the achievement ofRTC's purpose ... " (SUF 93.)
5 In September 2004, according to CSI and RTC records, Headley was
6 transferred to CSI, where she was designated as the HCO ChiefCMO INT, a senior
7 ecclesiastical governance positlOn in the Scientology religion. According to Headley,
8 she never fully assumed the duties and responsibilities of that position, but rather
9 continued to carry out the same duties and responsibilities she had been undertaking
10 while at RTC. She left on January 24,2005. (SUF 96.)
11 III. ARGUMENT: PLAINTIFF WAS NOT COVERED BY THE MINIMUM
~
~ 12 WAGE LAWS BECAUSE SHE DID NOT WORK FOR ORDINARY
l~
:1:'"
13 COMMERCIAL BUSINESS VENTURES IN COMPETITION IN THE
U 14 COMMERCIAL MARKETPLACE

I
15 In the related case Marc Headley v. Church of Scientology International, CV
16 09-3986 DSF, this court recognized that the federal and state minimum wage laws
17 reach only the ordinary commercial activities, in competition with other businesses,
18 of religious organizations. (Order Denying Pl.'s Mot. Summ. Adjud., Sept. 22, 2009,
19 (Docket No. SO) at 2-3.) From what we have shown above, there can be no basis to
20 conclude that Claire Headley's positions and labor for Defendants constituted
21 ordinary commercial activities in competition with other businesses. Accordingly,
22 summary judgment must be granted, dismissing Count I ofthe SAC.
23 A. FLSA Does Not Apply to Non-Commercial Activities of Churches
24 The contemporaneous understanding and intention of Congress and the
25 continuing and consistent interpretation by the United States Department of Labor
26 was and is that the FLSA does not apply to the activities of churches except to the
27 extent, and only to the extent, that they engage in ordinary business activities in
28 economic competition with other commercial entities. When enterprise coverage was
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proposed in 1960, Congress recognized that only such commercial activities of

2 churches and non-profits would be covered. See S. Rep. 86-1744, 86 'h Congo 2d Sess.
3 28 (1960). See 106 Congo Rec. 16703 (Exchange between Senators John F. Kennedy,
4 Floor Manager of bill, and Barry Goldwater, agreeing that "a church that has a
5 business operation on the side ... would not be exempt" for those activities, but that
6 otherwise churches would not be subject to the Act).
7 The following year, when the legislation was again considered and this time
8 enacted, Senator McNamara, chairman of the committee that reported the bill,
9 explained that the committee had declined to provide a blanket exception to tax
10 exempt non-profits because of concern that some non-profit entities might "compete
II with private industry to such a degree that the competition would have a very adverse
~

"it:I 12
13
impact on private industry." 107 Congo Rec. 6255 (1961). The Senate and House
Reports on the 1961 legislation thus emphasized the distinction between the covered
t:'"
U 14 commercial activities of non-profits' as opposed to their religious or educational or

I
15 eleemosynary activities that do not compete with businesses and that are excluded
16 from coverage under the Act's definition of "enterprise":
17 Eleemosynary, religious, or educational and similar
18
activities [are] not included in the term "enterprise"
[because] [s]uch activities performed by non-profit
19 organizations are not activities performed for a common
20 business purpose.

21 H.R.Rep. 75, 87 'h Congo 1st Sess. 8 (1961); S. Rep. 87-145, 87 th Congo 1" Sess. 41
22 (1961).
23 After enactment of the amendment, the Department of Labor issued
24 regulations, consistent with the congressional debates and committee reports, that
25 made clear that only the commercial activities of a non-profit or church would be
26 considered to be an "enterprise" subject to the Act; such activities, to the extent a
27 non-profit carried them on, would not subject the other activities or acts of the non-
28 profit to coverage. Thus, after recognizing that the "[a]ctivities of eleemosynary,
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religious or educational organizations may be performed for a business purpose" and

2 thus treated as an "enterprise," the regulations specify that:
3 "the nonprofit, educational, religious, and eleemosynary
4
activities will not be included in the enterprise. ... Such
acti vities were not regarded as performed for a business
5 purpose under the prior Act [i.e., the pre-196l Act that was
6
limited to "individual coverage"] and are not considered
under the Act as it was amended [i.e., the 1961 amendment
7 adding "enterprise coverage"] .... "
B
29 C.F.R. § 779.214 (emphasis added).
9
The lower federal courts followed this rule, including in a case involving a
10
Scientology church. See Van Schaick v. Church of Scientology of Cal., 535 F. Supp.
II
~
1125, 1140 (D. Mass.1982) (holding that staff member of Church of Scientology of

~J
12
California, the forerunner of CSI, was not covered by federal and state minimum
f .. 13
wage laws because "the legislative history and regulations [of FLSA] suggest that
d 14 religious activities of non-profit organizations were to be exempt," she was not a

I
15 "person whose employment contemplated compensation," no "employer-employee
16 relationship was ever established between her and the California Church," and "the
17
labor she provided [was not] related to commerce or the production of goods for
18
commerce"); Turner v. Unification Church. 473 F. Supp. 367,377 (D. R.I. 1978),
19 affd, 602 F.2d 458 (1st Cir. 1979) (holding that staff member of Unification Church
20
who provided labor, without compensation except meals and lodging, to help "create
21
a better world," was not covered by FLSA because "performing services for
22
charitable purposes without expecting any tangible compensation does not give rise
23
to an employer-employee relationship within the meaning of the F.L.S.A.").
24
In addition, the Department of Labor has recognized that certain religious
25
workers historically and constitutionally must be deemed to be excluded from the
26
Act's scope. Thus, the Wage and Hour Division's Handbook adopts and implements
27
the congressional intention to exclude ministers and members of religious orders
28
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from either enterprise or individual coverage:" "Persons such as nuns, monks, priests,
2 lay brothers, ministers, deacons and other members of religious orders who serve
3 pursuant to their religious obligations ... shall not be considered to be 'employees.'"
4 Wage and Hour Division, Dep't of Labor, Field Operations Handbook § IOb03(b).
5 See Shaliehsabou v. Hebrew Home of Greater Washington, supra 363 F.3d at 306
6 (Labor Department guidelines compelled by legislative history and First
7 Amendment); Schleicher v. Salvation Army, supra 518 F.3d at 476 (members of
8 religious orders not covered by FLSA).
9 In Tony and Susan Alamo Foundation v. Secretary of Labor, 471 U.S. 290
10 (1985), the Court, following closely arguments made by the Solicitor General on
II behalf of the Department of Labor, engaged in a careful and nuanced analysis
~
12 consistent with the history and congressional intent as discussed above. The Court
"If~ 13 recognized that commercial business activities of churches, if any, were quite
d 14 different from their religious activities, and that the latter were not covered by the

I
15 FLSA, even though the statute contained no explicit religious exemption.
16 The critical factor in Alamo was the nature of the activities that the Alamo
17 Foundation was conducting: ordinary businesses in direct competition with other
18
" This intention of Congress was explicitly restated in the legislative debates over the 1966
19 amendments to FLSA, which extended enterprise coverage to certain limited non-profits, including
educational institutions:
20
Mr. PUCINSKI. Let us consider a parochial elementary school, in which the nuns do the work
21 in the cafeteria. Would they have to be paid a minimum wage?

22 Mr. COLLIER. No, they would not be covered. [Continued on next page.]
Mr. BURTON of California. Mr. Chairman, will the gentleman yield?
23
Mr. COLLIER. I am delighted to yield to the gentleman from California.
24 Mr. BURTON. As I understand, it is not the gentleman's intention to include members of a
religious order under the definition of an employee, and therefore a nun would not be
25 considered an employee. Therefore, a minimum wage would not be required to be paid a nun.
Am I correct in my understanding of the gentleman's intention?
26
Mr. COLLIER. That is correct. I did not intend to cover them.
27 Dole v. Shenandoah Baptist Church, 899 F.2d 1389, 1395 (4th Cir. 1990) (quoting
112 Congo Rec. I I371 (1966)).
28
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commercial enterprises, such as selVice stations, grocery stores, motels, construction

2 companies, and hog farms. These clearly commercial activities fell into precisely the
3 category of activity that Congress feared might "compete with private industry to
4 such a degree that the competition would have a very adverse impact on private
5 industry." 107 Congo Rec. 6255 (1961). It was these activities, and these only, that
6 the Labor Department argued were within the mandate of FLSA. Brief for the
7 Department of Labor, 1985 WL 669832, at * 14 ("The case does not touch in any way
8 upon the Foundation's core religious functions of worship, liturgy, doctrine, prayer,
9 preaching, or internal organization, in which government may play no part . ... ")
\0 (emphasis added); id. at *17 ("It does not apply to the Foundation's religious or charitable
11 work, or to any work performed internally for the benefit of the Foundation's uncovered
~
12 activities rather than in commerce").
JOE
f~ 13 The Court's opinion closely followed and adopted the Solicitor General's
U 14 arguments that only the ordinary commercial activities of a church would be

i
15 considered to be subject to FLSA coverage. First, the Court emphasized that the
16 activities at issue all "selVe the general public in competition with ordinary
17 commercial enterprises ... and the payment of substandard wages would
18 undoubtedly give petitioners and similar organizations an advantage over
19 competitors." 471 U.S. at 299. The Court contrasted such commercial activities with
20 the non-commercial activities performed by those working for non-profit groups:
21 "The activities of non-profit groups were excluded from coverage only insofar as they
22 were not performed for a 'business purpose. '" Id at 297 (quoting S_ Rep. 87-145).
23 The Court thus adopted the Labor Department's position that application ofthe
24 minimum wage statute to the ordinary commercial activities, if any, of a church
25 would not violate the non-entanglement principle of the First Amendment's
26 Establishment Clause because a church need not even keep records with respect to
27 the activities of its workers that were not directed at ordinary commercial activities.
28 !d. at 305-306 ("These [recordkeeping] requirements apply only to commercial
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activities undertaken with a 'business purpose,' and would therefore have no impact
2 on petitioners' own evangelical activities ... "). See also general discussion, 471 U.S.
3 at 296-99.
4 Under Alamo, therefore, churches can be subjected to minimum wage laws
5 only if, and only to the extent that, they engage in ordinary commercial activities that
6 compete with those of other businesses.
7 In her portion ofthe Rule 26 Statement (Docket No. 30), however, Plaintiff has
8 argued that she was a covered employee under the "individual" coverage provisions of
9 FLSA even if she was not under the "enterprise" coverage provisions that were directly at
\0 issue in Alamo. This argument is belied both by the words and structure of the statute
11 and by the government's brief and the Court's decision in Alamo.
~
12 First, the FLSA itself is silent with respect to and makes no distinction between
}! 13 the scope of individual and enterprise coverage as applied to religious organizations
U 14 and non-profits. Individual and enterprise coverage are defined in haec verba: the

~
15 Act extends to individuals "engaged in [interstate} commerce or in the production of
16 goods for commerce" and to "enterprise[s] engaged in [interstate} commerce or in
17 the production ofgoods for commerce." 29 U.S.c. § 207 (emphasis added); id. §
18 206. These identical defining phrases contained in the same sentence must be
19 construed to mean the same thing. Nat'l Credit Union Admin. v. First Nat 'I Bank &
20 Trust Co., 522 U.S. 479, 501 (1998) ("Similar language within the same section of a
21 statute must be accorded a similar meaning"); IBP, Inc. v. Alvarez, 546 U.S. 21,34
22 (2005) (same, applying principle to two FLSA sub-sections). It is inconceivable that
23 in using the same phrase Congress intended to exclude churches engaged in non-
24 commercial activities from the FLSA' s mandates under the rubric of "enterprise"
25 coverage while extending it, under the rubric of "individual" coverage, to the very
26 church workers providing such labor.
27 Second, if church workers not engaged in ordinary commercial activities in
28 competition with for-profit businesses nevertheless are subject to individual coverage,
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the limitations upon enterprise coverage for churches so carefully preserved in Alamo
2 would be rendered meaningless. It would have made little sense for the Solicitor
3 General and the Supreme Court to have taken such pains to explain that the
4 application of the FLSA to the workers at issue in Alamo did not touch in any way
5 upon workers engaged in religious functions of worship, liturgy, doctrine, prayer,
6 preaching, or internal organization, in which, as the Labor Department
7 acknowledged, "government may play no part," if those same workers could be
8 subject to coverage merely by using the phones, the Internet, the mails or the
9 highways in the course of carrying out their religious functions and duties. If church
10 workers not subject to enterprise coverage under FLSA nevertheless potentially were
II subject to individual coverage, churches would be required to maintain detailed
~

~J
12 records for such religious workers which would be subject to ongoing inspection by
toO 13 government officials, directly contrary to the Supreme Court's holding in Alamo and
U 14 thereby raising the very substantial Establishment Clause concerns that the Court

~
15 found were not present in Alamo. The Alamo Court therefore made clear that "[t]he
16 Act reaches only the •ordinary commercial activities' of religious organizations
17 [citation], and only those who engage in such activities . ... " 471 U.S. at 302
18 (emphasis added), words clearly foreclosing "individual coverage." Indeed, the
19 Department of Labor's own regulation specifically states that the exclusion of non-
20 commercial activities from enterprise coverage continued the exclusion of such
21 activities from individual coverage under the pre-1961 Act: "Such activities were not
22 regarded as performed for a business purpose under the prior Act and are not
23 considered under the Act as it was amended .... " 29 C.F.R. § 779.214.
24 While two cases from the Southern District of New York suggest that persons
25 providing labor to a non-profit organization may be subject to individual coverage
26 under the FLSA even if the organization is not an enterprise, neither case is apposite.
27 Bowrin v. Catholic Guardian Soc 'yo 417 F. Supp. 2d 449 (S.D.NY 2006);
28 Boekemeier v. Fourth Universalist Soc 'y in the City of New York. 86 F. Supp. 2d 280
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(S.D.N.Y. 2000). In each case, the entity in question was not subject to "enterprise"
2 coverage for reasons having nothing to do with the exclusion from coverage for
3 churches engaged in religious activities as recognized in Alamo. but for independent
4 reasons under the statute. Likewise, neither case involved members of a religious
5 order. The courts therefore had no occasion to, and in any event did not, analyze the
6 limitations upon wage and hour coverage with respect to churches and their religious
7 workers so carefully preserved in Alamo and recognized in the Labor Department's
8 Field Operations Handbook.' If, however, the Act were held to apply to the activities
9 of Claire Headley at CSI and RTC, every minister, rabbi, priest, monk, nun, or other
10 religious official would be subject to it merely by use of the telephone, the mails, or
II interstate travel. That would certainly have come as a surprise to the Alamo Court, to
~

·1f~ 12

13
the then-Solicitor General, to then-Senators Goldwater and Kennedy, and to the entire
Congress.
U 14 Similarly, in Mitchell v. Pilgrim Holiness Church Corp .. 210 F.2d 879 (7th Cir.

I
15 1954), decided before enterprise coverage was created by the 1961 amendments to
16 the FLSA, the defendant, while denominated a church, engaged exclusively in the
17 publishing business, including publication of substantial materials unrelated to its
18 religious mission. Pilgrim, of course, was decided 31 years before the Supreme
19
, Thus, in Bowrin, the defendants were not churches, but rather government-funded
20
religiously affiliated entities that provided secular services to neglected children, and whose
employees consisted of secular workers, including child care workers, substance abuse counselors,
21
social workers and nurses who did not provide their labor for religiOUS motivation. While the
entities were not "enterprises" for reasons independent of Alamo, those non-religious workers
22 nevertheless were held subject to individual coverage. 417 F. Supp. 2d at 467 -4 71. In Bockemeier,
while the defendant was a church, the case had nothing to do with the church's religious activities;
23
the defendant engaged in a separate real estate business unrelated to its religious mission, and
conceded it would have been subject to enterprise coverage for that part of its activities under
24
Alamo but for the fact that its revenues from such activities fell short of the threshold level for
enterprise coverage. The district court merely held that the employee engaged in the real estate
25
business, but not the other church workers engaged in religious activities, would come within
individual coverage. 86 F. Supp. 2d at 287-288. Neither case presented a conflict between
26
individual coverage and the Alamo Court's insisterice that "The Act reaches only the 'ordinary
cornmercial activities' of religious organizations [citation], and only those who engage in such
27
activities.,." 471 U.S. at 302 (emphasis added).
28
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Court's decision in Alamo, and is of limited precedential value in light of that

2 decision, to say nothing of the substantial doctrinal developments under the
3 Establishment and Free Exercise clauses since 1954. See, e.g., Lemon v. Kurtzman,
4 403 U.S. 602, 612 (1971) (summarizing and setting forth the non-entanglement
5 principle); NLRB v. Catholic Bishop a/Chicago, 440 U.S. 490, 502 (1979) (warning
6 against government intrusion into relationship between Catholic parochial schools
7 and even lay teachers because "[i]t is not only the conclusions that may be reached
8 ... which may impinge on rights guaranteed by the Religion Clauses, but also the
9 very process of inquiry leading to findings and conclusions")."
10 Even on its own terms, however, Pilgrim only applies to workers who provide
11 labor in expectation of salary. Critically, the publishing company did not claim that
~
12 the workers provided their labor as volunteers with no expectation of compensation;
"If; 13 the court "assume[d in the absence of contrary evidence] that the wages [the workers]
d 14 received constituted the income on which they lived," and held that the workers

i
15 therefore were "employees" subject to individual coverage under the Act. 210 F .2d
16 at 884. Pilgrim thus implicitly recognized that religious workers who voluntarily
17 provide labor to support their religion without monetary motive (such as members of
18 religious orders) would not be subject to individual coverage. The case accordingly
19 was not deemed apposite, even before A lama, by the district courts in Van Schaick
20 and Turner, both of which, as we have seen, held that volunteer church workers
21 engaged in religious, non-business activities were not covered by the minimum wage
22 laws precisely because they provided their labor without expectation of monetary
23 compensation. See Van Schaick, 535 F. Supp. at 1140 & n.1 5 (plaintiff was not a
24 "person whose employment contemplated compensation") (quoting Walling v.
25
" The Van Schaick court noted Pilgrim's apparent incompatibility with such doctrines in the
course of declining to follow it. 535 F. Supp. at 1140, n.\5. Indeed, Pilgrim has essentially been
26
overruled in Schleicher v. Salvation Army, supra, 518 F.3d 472, 476, where Judge Posner, going
much further than necessary for purposes of this case, opined that even monks producing
27
sacramental wine for public sale nevertheless would not be covered under FLSA.
28
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Portland Terminal Co., 330 U.S. 148,152 (1947»; Turner, 473 F. Supp. at 377
2 (same). See also Lewis v. Holy Spirit Ass 'n, 589 F. Supp. 10, 13 (D. Mass. 1983)
3 (dismissing claims for quasi contract and workers' compensation because "plaintiff
4 joined the defendant Church for personal and religious reasons, and not for any
5 reason associated with securing employment or compensation for services performed.
6 It is well established that no recovery can be had ... for services rendered by reason
7 of religious or charitable motives").
8 Thus church workers not engaged in ordinary businesses in competition with
9 secular enterprises cannot be subject to either enterprise or individual coverage under
10 Alamo, the Labor Department rules, and the First Amendment.
11 B. California's Minimum Wage Laws Do Not Apply
~
12 As Headley's counsel initially acknowledged (but from which he later
"E
h 13 attempted to backtrack) in the Marc Headley case, ''the Federal and California
~.i
_J 14 minimum wage and overtime laws are 'analogous,' 'complementary,' and essentially

I
15 equivalent in application," particularly in their definitions of "employer," "employee"
16 and "employed." (PI.'s Reply Mem. Summ. Adjud. (Docket No. 47), at 14:23-25
17 (quoting Bureerong v. Uvawas, 922 F. Supp. 1450,1470 (C.D. Cal. 1996». While
18 the California minimum wage law is silent on its applicability to churches, the only
19 analogous provisions of the Labor Code do not cover individuals who agree to
20 engage in religious work on behalf of churches or religious organizations without
21 meaningful compensation. Labor Code § 3352(b) excludes from the definition of
22 "employee" anyone performing services for a religious organization "for aid and
23 sustenance only." Section 3352(i) excludes anyone performing "voluntary service"
24 for a non-profit organization who "receives no remuneration for the services other
25 than meals, transportation, lodging, or reimbursement for incidental expenses."
26 These provisions parallel the non-applicability of the FLSA to volunteer religious
27 workers and members of religious orders. See discussion, ante; Turner, 473 F. Supp.
28
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at 377 (person who provided labor to church ''to create a better world" [as Headley
2 covenanted in her Sea Org application] not covered by minimum wage law).
3 California's minimum wage law must be construed narrowly with respect to
4 church religious workers because such an application of the law would raise serious
5 questions under the First Amendment. See, e.g., Point II, post, discussing the
6 ministerial exception. In such contexts, courts must, if possible, interpret a statute to
7 avoid constitutional infirmity. Murray v. The Charming Betsy, 6 U.S. (2 Cranch) 64,
8 118 (1804); Ashwander v. Tenn. Valley AUlh., 297 U.S. 288, 341 (1936) (Brandeis, J.
9 concurring). Similarly, in California, "'[a]n established rule of statutory construction
10 requires [courts] to construe statutes to avoid constitutional infirmit[ies].'" McClung
11 v. Employmenl Dev. Dep'l, 34 Cal. 4th 467, 477 (2004) (quoting Myers v. Philip
~

~j 12 Morris Cos., 28 Cal. 4th 828, 846-47 (2002) (some internal quotation marks
f .. 13 omitted».
U 14 Where, as here, there is significant risk of infringement on First Amendment

I
15 rights, courts will require a clear expression oflegislative intent to regulate religious
16 activities. NLRB v. Calholic Bishop ojChicago, supra 440 U.S. at 500, 507.
17 Research discloses no clearly expressed intention by the California Legislature that
18 the Labor Code, and in particular its wage-hour provisions, are to apply to religious
19 workers. And, as this court noted in the Marc Headley case, "Plaintiff does not cite
20 to any authority suggesting that the scope of California's labor laws is greater than
21 federal law for people who are similarly situated." (Order Denying PI. 's Mot. Summ.
22 Adjud. (Docket No. 50), Sept. 22, 2009, at 2, n.l.)
23 C. Plaintiff Was Not Covered by the Minimum Wage Laws
24 1. Plaintiff's Positions at RTC Were Religious in Nature
25 RIC is a religious entity. Its function is unique and essential to the
26 Scientology religion: to insure that Scientology churches and ministers provide
27 religious services in strict conformity with Scientology Scriptures and orthodox
28
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practices. (SUF 37.) In no way can RTC be said to engage in ordinary commercial
2 activities in competition with commercial businesses.
3 Headley worked as a member of the Sea Org for RTC for eight years. (SUF
4 73.) As noted above, she held the senior position of Internal Executive RTC for over
5 four years, and was directly involved in church governance. (SUF 90-91.) In
6 addition, she acted as an auditor, a course supervisor, an ethics officer, and a
7 crarruning officer. (SUF 73, 89,91.) As set forth in the Rev. McShane's declaration,
8 and as Headley repeatedly acknowledges, all these positions and functions were
9 defined and governed by Scientology written policy and scriprure; Headley provided
10 and applied Scientology services and practices to RTC's staff according to the
II writings of Mr. Hubbard. (SUF 85-94.)"
~
C 12 In her deposition, Headley attempted to differentiate between her

H
U
13

14
responsibilities as an auditor, which she roncedes were religious, and her
responsibilities as an RTC executive, course supervisor, cramming officer or ethics

I
15
I L Headley testified that on one or more occasion she provided "manual labor" to assist
16 Golden Era in completing the release of a new CD. Such efforts. of course, were in furtherance of
17 Golden Era's mission to teach or spread the religiOn, and did not compete with private businesses.
Ms. Headley's episodic participation in such activity is called an "all hands" project, as described
by Rev. McShane (SUF 95):
18
In addition to their assigned duties for their particular positions, Sea Org staff members
19 occasionally are asked to join in an all hands project at the particular church to which they are
20
assigned. Such a project typically requires immediate and intensive completion, and 'all hands'
temporarily join in to do so; they then return to their primary dutics at their assigned positions.
The term 'all hands' is derived from a similar practice aboard ships, where the captain will order
21 'all hands on deck' to complete an important and pressing task.... Such activities are never
22 the primary duties of the participants asked to join in !be project.
It is typical of life in a religious order for the members to engage in physical labor in addition to
23 their other duties and responsibilities. Thus, in Buddhist orders, "Even humble tasks-such as
weeding the garden, baking bread, sweeping the monastery paths, cleaning the latrines~are
24 understood in a religious way. These ordinary duties contribute to the monastic's developing
attitudes of humility, modesty, and obedience, without which their progress in the stages of
25 meditation leading to enlightenment and the spread of the Buddhist ideal would be impaired or
thwarted." (Ainn Decl., '11 19.) Similarly, in Benedictine orders, "Under the heading of labara
26 ("Work"), monks and nuns engaged in both hard physical and mental labors as disciplines
conducive to the spiritual life (Rule, Chapter 46). In the first rank was the copying, binding and
27 transmitting of texts of the Bible, theological and philosophical writings which aid in understandmg
and interpreting the Bible, and the Rule itself." (Id.,1 25.)
28
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I officer, which she asserted were not part of the religion of Scientology, but rather
2 were merely "administrative" or "ethics" or "justice" or "police" functions, as ifthe
3 governance, ethics and internal justice procedures of a religion or church can be
4 separated from its other practices. Churches and religions from time immemorial
5 have imposed ethics systems upon their followers and clergy, and have "policed"
6 compliance with such edicts. "[QJuestions of church discipline ... are at the core of
7 ecclesiastical concern," Serbian Eastern Orthodox Diocese v. Milivojevich, 426 U.S.
8 696, 717 (1976). (Before Pope Benedict was selected Pontiff, he directed the
9 Vatican's Congregation for the Doctrine of the Faith, whose primary function was to
\0 "police" compliance with Church doctrine as stated by the Holy See. (Flinn Decl., ~
11 44).) The court must reject Headley'S false distinction between Scientology auditing
~
C 12 and Scientology ethics and justice practices as a matter oflaw, just as it would an
l~
:1:'"
13 effort to distinguish, for example, between the duties of a Catholic priest conducting a .
• .Ii
'ii~ 14 religious service or prayer from those of a bishop managing a diocese, undertaking an
-'"

I
15 investigation of whether clerical officials are complying with doctrine, or imposing
16 discipline upon priests, nuns, or even congregants. Certainly a Bishop's imposition
17 of an order denying communion to an "errant" congregant for publicly advocating
18 freedom of choice on the abortion issue (such as Senator Kerry or Representative
19 Patrick Kennedy), disciplining a priest for ethical misconduct after investigating his
20 actions, or requiring a member of the Jesuit Order to withdraw from electoral politics
21 (as happened to Father Robert Drinan, a former Massachusetts Congressman), or a
22 Pope's order of excommunication for apostasy, heresy or schism is no less religious
23 because it is the exercise of a "police" function. The First Amendment prohibits civil
24 courts from interfering "on matters of discipline, faith, internal organization, or
25 ecclesiastical rule, custom, or law." Serbian Eastern Orthodox Diocese, 426 U.S.
26 supra at 7\3.
27 Headley repeatedly concedes that what she calls "police" functions, such as
28 cramming, correction procedures, or confessionals, required extensive study of and
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adherence to official writings and polIcies of Scientology and were "Scientology

2 practices" and part of the "Scientology belief system." (SUF 23, 27-29, 86, 89-91.) It
3 is not for her, or the Court, to determine whether such concededly Scientology beliefs
4 and practices are part of the religion. It is the Church authorities' explanation and
5 description of the beliefs and practices ofthe Scientology religion, here set forth in
6 the McShane Declaration, that must be accepted by the Court, lest the judiciary
7 become entangled in a religious dispute as to what is the nature and content of a
8 religion. It would be both anomalous and unconstitutional for a court to try to resolve
9 a dispute as to what is or is not part of a religion, let alone to decide that what a
10 religious body states is part of its religious beliefs and practices really is not. Holy
II Spirit Ass 'n for the Unification of World Christianity v. New York City Tax Comm 'r,
~

~I 12 55 N.Y.2d 512, 518,450 N.Y.S 2d 292 (1978) ("[Clourts may not inquire into or

t~ 13 classify the content of the doctrine, dogmas, and teachings held by that body to be
U 14 integral to its religion but must accept that body's characterization of its own beliefs

i
15 and activities and those of its adherents, so long as that characterization is made in
16 good faith and is not sham""); Paul v. Watchtower Bible & Tract Soc 'y ofNew York,
17 819 F.2d 875, 879 (9th Cir. 1987) ("Shunning is a practice engaged in by Jehovah's
18 Witnesses pursuant to their interpretation of canonical text, and we are not free to
19 reinterpret that text"); id. at 878, n.1 (discussing source and meaning of this rule of
20 judicial deference compelled by the First Amendment) (quoting Serbian Eastern
21 Orthodox Diocese, 426 U.S. at 709).
22
23
24
12 Reverend McShane's characterization oflhe practices of the religion on its face is not
merely his own personal opioion set forth for litigation purposes, but is based entirely upon the
25 writings of Mr. Hubbard, as Rev. McShane repeatedly states and demonstrates. In particular,
Reverend McShane demonstrates, and Ms. Headley repeatedly concedes, that Ms. Headley's actions
26
as an RTC executive, cOUl"e supervisor, cramming officer or ethics counselor were all based upon
study of and adherence to written church policy and scripture, principally that set forth in The
27
Technical Bulletins and The DEC. (See Statement of Facts, ante.)
28
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2. Headley's Positions at Golden Era Were Religious

2 As Headley acknowledges, "Golden Era is the dissemination org[anization] of
3 Scientology." (SUF 33.) Its function and purpose is to make the content of the
4 Scientology religion broadly available to Scientologists and to the outside world.
5 (SUF 33,35.) Scientology is an evangelical religion. It is a fundamental tenet of
6 Scientology that only by spreading the religion throughout the planet can humankind
7 hope to achieve a peaceful and just world ("Clearing the Planet"). (SUF 12-13.)
8 Thus, it is an essential function of CSI to reach out to bring new parishioners and
9 followers into the faith. Golden Era produces considerable materials directed at such
10 a potential congregation. In doing so, it is carrying forward the command of the
II Scientology scriptures. As the Supreme Court has emphasized, "[t]his form of
~
~ 12 religious activity occupies the same high estate under the First Amendment as do

H
~~
13
14
worship in the churches and preaching from the pUlpits. It has the same claim to
protection as the more orthodox and conventional exercises of religion." Watchtower
-"'

l
15 Bible & Tract Soc'y a/New York v. Village a/Stratton, 536 U.S. 150,161 (quoting
16 Murdock v. Pennsylvania, 319 U.S. 105,108-09 (1943».
17 In today's world, The Word is not spread merely by sermons in church or reading
18 a bible. People get their information through a broad and ever-expanding range of media,
19 including film, video, audio, CDs, DVDs, computer media, smart phones, etc. Golden
20 Era produces such media with an explicitly Scientology content."
21 The fact that Scientology churches raise money from parishioners and that
22 Golden Era receives payments from such churches to pennit it to continue to produce
23 such religious materials that are then made available to parishioners in no way
24
" Dr. Flinn's experiences in the Franciscan Order were similar: "1 worked in the monastery
25 book bindery, binding new and rebinding old editions of the Bible and theological treatises. I
produced holy cards and publications to advertise the work of the monastery. There was one
26 difference: Scientology and the Sea Organization avail themselves of the latest forms of technology
27
in carrying out their religious mission. We forget that when the monasteries first arose they did the
same thing." (Flinn Dec., '160.)
28
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converts the activities of the churches or of CSI and Golden Era into ordinary
2 commercial activity, let alone in direct competition with commercial businesses.
3 "[A] religious organization needs funds to remain a going concern." Murdock v.
4 Pennsylvania, 343 U.S. at III. As long as the activity by which the funds are raised
5 consists precisely of the provision or promotion of the religion itself, it furthers the
6 exclusive religious purpose of the church and is therefore itself a religiOUS activity.
7 As the Supreme Court pointedly observed in Murdock with respect to the sale of
8 religious literature by Jehovah's Witnesses solicitors:
9 [T]he mere fact that the religious literature is "sold" by
itinerant preachers rather than 'donated' does not transform
10
evangelism into a commercial enterprise. If it did, then the
11 passing of the collection plate would make the church
~
service a commercial product.

t~4~
12

13 Id.
14 Moreover, Golden Era does not produce or sell non-Scientology related media
-'"

~
15 to the general public in competition with other entities, and it in no way competes
16 with other entities in creating and distributing materials about and for the Scientology
17 religion. (SUF 36.) Indeed, no such competition is possible since the films and other
18 media products about the religion are created by the Church to insure the requisite
19 doctrinal knowledge and control. (SUF 36.)" In short, no other entity can enter the
20 "market" of creating such religious materials because there is and can be no such
21 "market."

22 Moreover, Headley's positions and responsibilities at Golden Era, as she

23 concedes, did not even involve the production of the religious media, but rather
24
" Similar control over the production of scriptural materials is exercised by other churches.
25
For example, "A celebrated monastic press which prints the religious treatises of the Benedictine
Order today is SI. Meinrad Abbey Press, a subsidiary institution of SI. Meinrad Abbey in SI.
26
Meinrad, Indiana." (ld., ~ 25.) The monks who work for the Press are not paid, while outside
technical consultants who are not part of the Order are, allowing the order "to keep tight controls
27
over all publications that deal with [its1rule, theology and other teachings." (ld.)
28
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consisted exdusively of the supervision of religious courses and the provision of

2 auditing, crarmning and Confessionals to the staff of Golden Era. (SUF 60.) As the
3 Solicitor General and the Supreme Court emphasized in Alamo, even where some
4 activities of a religious entity arguably could be considered to be an "enterprise,"
5 which is not true here, the non-commercial religious activities of the organization are
6 not induded within the "enterprise" and are not subject to minimum wage regulation.
7 Brieffor the Dept. of Labor, 1985 WL 669832, at * 14 ("this enforcement proceeding
8 applies solely to work performed in the commercial businesses of the Foundation
9 [and] does not touch in any way upon the Foundation's core religious functions of
10 worship, liturgy, doctrine, prayer, preaching, or internal organization, in which
11 government may play no part .... ") (emphasis added). As we have shown, the
~

~I 12 Supreme Court's opinion closely adhered to the Solicitor General's arguments, and

t~ 13 adopted the Labor Department's position that a church need not even keep records
U 14 with respect to the activities of its workers that were not directed at ordinary

~
15 commercial activities. Alamo, supra 471 U.S. at 305-306. Accordingly, the Labor
16 Department regulations explicitly provide that even where a non-profit engages in
17 commercial activity that is covered as an enterprise, "the nonprofit, educational,
18 religious, and eleemosynary activities will not be induded in the enterprise." 29
19 C.F.R. § 779.214.
20 In summary, the facts are indisputable that plaintiff Headley was not a covered
21 employee under federal or state minimum wage laws, and her claim for unpaid
22 minimum wage must be dismissed.
23 3. As a Member of a Religious Order, Headley Was Not a
24 Covered Employee Under tbe Minimum Wage Laws
25 Independently and alternatively to the grounds set forth in sub-sections I and 2
26 above, Headley was not a covered employee subject to minimum wage laws because
27 she was a member of a religious order, the Sea Org. When Headley joined the Sea
28 Org, she understood what the lifestyle of a Sea Org member entailed, because her
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mother, uncle and cousins had all been Sea Org members, and it was "pretty much all
2 I knew as a lifestyle." (SUF 52.)
3 Membership in the Sea Org had (and has) the attributes traditionally associated
4 with membership in a religious order: Headley and her colleagues took solemn vows
5 of religious service; were housed in CSI-supplied living units; wore distinctive
6 uniforms; were expected to devote at least two and one-half hours each day to
7 religious study or participation in ritual; and volunteered with no expectation of
8 compensation but were provided with food, shelter and a modest stipend to cover
9 other necessities. (SUF 39-45.) (See Statement of Facts, ante at 10-12, for further
10 discussion of the Sea Org.)
11 We have shown that Congress, the Department of Labor and the federal courts
~

-" I 12 agree that members of religious orders are not considered covered employees under

f~ 13 the FLSA. See Wage and Hour Division, U.S. Department of Labor, Field
U 14 Operations Handbook § 10b03(b) ("Persons such as nuns, monks, priests, lay

~
15 brothers, ministers, deacons and other members of religious orders who serve
16 pursuant to their religious obligations ... shall not be considered to be 'employees"');
17 Shaliehsabou v. Hebrew Home of Greater Washington, 363 F.3d 299,305 (4th CiL
18 2004)(religious order exception mandated by statute); Dale v. Shenandoah Baptist
19 Church, 899 F.2d 1389, 1395 (4th CiL 1990)(same, quoting 112 Congo Rec. 11371
20 (1966)); Schleicher V. Salvation Army, supra, 518 F.3d at 476 (members of religious
21 orders not covered).
22 There can be no legitimate question that the Sea Org is a religious order, as
23 found by the U.S. Department of Homeland Security and the United Kingdom
24 Department of Inland Revenue, and as extensively set forth in the expert declaration
25 of Dr. Flinn. (SUF 40, 46.) The most complete definition of a religious order that
26 defendants have found is stated in IRS Rev. Proc. 91-20, 1991-10 IRB 26, which sets
27 forth the following criteria: (I) members live under a strict set of rules requiring self-
28 sacrifice and commitment to the goals of the organization at the expense of their
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material well-being; (2) members undergo a training program and make a long-term
2 commitment; (3) organization is under the control or supervision of a church or
3 association of churches; (4) members live communally and are held to a strict level of
4 moral and religious discipline; (5) members work full-time on behalf of goals of the
5 organization; (6) members engage in activities such as prayer, religious study,
6 teaching, missionary work, or church reform or renewal; (7) the organization meets
7 the requirements for tax exemption. See 70A Am . .fur. 2d Social Security and
8 Medicare § 613 (2009)(adopting IRS definition). It is readily apparent that the Sea
9 Org meets all the criteria. (SUF 41-48.)
10 IV. THE MINISTERIAL EXCEPTION BARS APPLICATION OF WAGE
11 AND HOUR LAWS TO HEADLEY'S LABOR FOR CSI AND RTC
~

~I 12 The federal and state courts have recognized that the First Amendment religion

h 13 clauses mandate a "ministerial exception" to state and federal statutes regulating

H
-'" 14 employment, wages, and hours. Elvig, supra, 375 F.3d at 960-61; Catholic Charities

~
15 of Sacramento, supra, 32 Cal. 4th at 543-44; Schmoll v. Chapman Univ., supra, 70
16 Cal. App. 4th at, 1442-44. The ministerial exception was first stated in McClure v.
17 Salvation Army, 460 F.2d 553, 558-59 (5th CiL 1972):
18 Just as the initial function of selecting a minister is a matter
19
of church administration and government, so are the
functions which accompany such a selection. It is
20 unavoidably true that these include the determination of a
21 minister's salary, his [or her] place of assignment, and the
duty he [or she] is to perform in furtherance of the religious
22 mission of the church.
23
(Emphasis added). "[T]he ministerial exception doctrine is based on the notion a
24
church's appointment of its clergy, along with such closely related issues as clerical
25
salaries, assignments, working conditions and termination of employment, is an
26 inherently religious function because clergy are such an integral part of a church's
27
functioning as a religious institution." Roman Catholic Archbishop of Los Angeles v.
28
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Superior Court, 131 Cal. App. 4th 417, 433 (2005) (emphasis added) (citing Werji v.
2 Desert Sw. Annual Conference, 377 F.3d 1099, 1101 (9th Cir. 2004)). Allowingthe
3 state to intrude in such matters "results in excessive [government] entanglement with
4 religion in violation of the establishment clause", and "violate[s] the free exercise
5 clause" because "'churches ... must have power to decide for themselves, free from
6 state interference, matters of church government as well as those of faith and
7 doctrine.'" Silo v. CHW Med. Found, 27 Cal. 4th 1097, 1106 (2002) (quoting
8 Schmoll, 70 Cal. App. 4th at 1442-43).
9 "[T]he ministerial exception ... is robust where it applies," precluding "any
10 inquiry whatsoever into the reasons behind a church's ministerial employment
11 decision." EEOC v. Roman Catholic Diocese ofRaleigh, NC, supra, 213 F.3d at 80 I.
~

~I 12 It encompasses all facets of a church's relationship with its clergy employees and is

l~ 13 applied to virtually all federal and state antidiscrimination statutes. See Hollins v.
U 14 Methodist Healthcare, Inc. 474 F.3d 223,225 (6thCir. 2007).

i
15 Most significantly for current purposes, the ministerial exception bars
16 application of federal and state minimum wage laws to a church's relationship with
17 those coming within the exception. Alcazar v. Catholic Archbishop ofSeattle, 2006
18 WL 3791370, at *7 (W.D. Wash., Dec. 21, 2006) (exception applies to state
19 minimum wage law); Schleicher, supra, 518 F.3d at 475,478 ("adopt[ing] a
20 presumption that clerical personnel are not covered by the FLSA" and suggesting
21 "the ministers exception is better termed the 'internal affairs' doctrine", because it is
22 not limited to ministers); Shaliehsabou, supra, 363 F.3d at 305. Indeed, the Fourth
23 Circuit has held that the ministerial exception exists as a statutory matter under the
24 FLSA as "derived from the congressional de bate [about the FLSA] and delineated in
25 guidelines issued by the Labor Department's Wage and House [sic] Administrator"
26 that exclude clergy or members of religious orders as "employees" under that act. Id.
27 (quoting Dole v. Shenandoah Baptist Church, 899 F.2d 1389, 1396 (4th Cir. 1990)).
28 The FLSA's ministerial exception for clergy and members of religious orders is
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"coextensive in scope" with the constitutionally mandated ministerial exception

2 applied in other contexts. Shaliehsabou, 363 F.3d at 306.
3 Equally significant, the ministerial (or "internal affairs") exception is applied
4 broadly to all church workers, except those engaged in activities with a "strictly
5 secular purpose." EEOC v. Sw. Baptist Theological Seminary, 651 F.2d 277, 283
6 (5th Cir. 1981). Accord, Alcazar, 2006 WL 3791370, at *7 ("the ministerial
7 exception applies to both state and federal claims and prohibits a court from inquiring
8 into the decisions of a religious organization concerning the ... rate of pay ... or any
9 other employment related decision concerning ministers and other non-secular
10 employees"»; EEOC v. Catholic Univ. of Am., 83 F.3d 455, 463 (D.C. Cir. 1996)
II (''the ministerial exception encompasses all employees of a religious institution,
~
12 whether ordained or not, whose primary functions serve its spiritual and pastoral
--I
h 13 mission"). Thus, the exception applies to "individuals whose duties for a church not only
U 14 involve traditional public functions, but who are also, functionally, paid to actively

I
15 proselytize on a church's behalf" Hope Int'l Univ. v. Superior Court, 119 Cal. App. 4th
16 719, 736 (2004) (citing Alicea-Hernandez v. Catholic Bishop of Chicago, 320 F.3d 698,
17 703 (7th Cir. 2(03) (non-ordained press secretary whose duties included outreach to
18 community within the ministerial exception».
19 The key test is whether the worker's "primary duties consist of teaching,
20 spreading the faith, church governance, supervision of a religious order, or
21 supervision or participation in religious ritual and worship," or "is important to the
22 spiritual and pastoral mission of the church." Rayburn, supra, 772 F.2d at 1168-69
23 (emphasis added); Roman Catholic Diocese of Raleigh. supra, 213 F.3d at 803
24 (quoting Rayburn). Accord, Hope Int'l Univ., supra, 119 Cal. App. 4th at 734 (same
25 language) (quoting Schmoll, 70 Cal. App. 4th at 1439 (quoting Rayburn». See Ross
26 v. Metro. Church of God, 471 F. Supp. 2d 1306, 1310 (N.D. Ga. 2007) (quoting
27 Rayburn, and collecting cases applying exception to, inter alia, musical director,
28
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organist, choir director, resident in hospital pastoral program, religion teacher at

2 parochial school, nun, kosher food supervisor, and director of religious education).
3 As the language quoted above suggests, in detennining whether a religious
4 worker comes within the ministerial exception, every court, state and federal, that has
5 considered the applicability of the ministerial exception has employed the "primary
6 duties" test. See, e.g., Schmoll, 70 Cal. App. 4th at 1439; Shaliehsabou, 363 F.3d at
7 306 (test compelled both by First Amendment and legislative history ofFLSA).
8 Under that test, courts look to whether the worker's primary duties fall within the
9 exception; if they do, he or she is exempt regardless of how much time the individual
10 actually spends perfonning the primary duty. Cf., Ramirez v. Yosemite Water Co., 20
11 Cal. 4th 785, 798 n.4 (1999) (describing scope of federal "primary duty" test in
~
~ 12 secular exemption cases under FLSA). Thus, so long as the worker potentially could
... ~
r.:
1:'"
13 be assigned such critical religious duties, he or she comes within the exception,
U 14 regardless of the worker's assignment at the time of the alleged adverse employment

I
15 action. See EEOC v. Sw. Baptist Theological Seminary, supra, 651 F.2d at 284
16 (explaining McClure and holding that plaintiff who "was functioning principally as a
17 secretary at the time she was discharged" was subject to the ministerial exception
18 because this was simply "the staff duty assigned to her" at the time, and she "was still
19 fully qualified and authorized to perform the ceremonies ofthe [Salvation]
20 Army ... ").
21 Detennination of the applicability of the ministerial exception is a question of
22 law to be decided by the court. See Smith v. Raleigh Dist. of the North Carolina
23 Conference of the United Methodist Church, 63 F. Supp. 2d 694,706 (E.D.N.C.
24 1999) ("The applicability of the ministerial exception is a question oflaw for the
25 court."); see also Weishuhn v. Catholic Diocese of Lansing, 756 N.W.2d 483, 498-
26 500 (Mich. Ct. App. 2008) (application of ministerial exception is a "question oflaw
27 for the judge, not a question of fact for the jury"). See Hope Int 'I Univ.supra, 119
28 Cal. App. 4th at 741 (requiring the lower court to bifurcate the question of whether
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fired employees came under the ministerial exception, and try that issue first in order
2 "to avoid religious entanglement")_ Indeed, cases involving "members of religious
3 orders suing in regard to their relationship in the order" are among "the relatively
4 easy cases" in the application of the ministerial exception_ [d. at 735, 736 (citing
5 Rosati v. Toledo, Ohio Catholic Diocese, 233 F. Supp. 2d 917, 921 (N.D. Ohio 2002)
6 (novice to order of cloistered nuns subject to ministerial exception because "a nun is
7 obviously important to the spiritual and pastoral mission of the Catholic Church")).
8 Here, summary judgment is the warranted procedure. See Schmoll, 70 Cal.
9 App. 4th at 1444 (applying ministerial exception upon summary judgment);
10 Werft, 377 F.3d at 1104 (affinning application of ministerial exception as basis for
11 granting a motion to dismiss). We have shown extensively, ante, that Headley
~

..f;I 12
13
perfonned religious functions whose primary duties fit squarely within the definition
of the ministerial exception. For example, while at Golden Era from 1992-1996,
U 14 Headley supervised and ultimately became the chief supervisor for two religious

I
15 courses she provided to Golden Era's staff members. In addition, for a time she held
16 the position responsible for providing auditing - Scientology's central religious
17 practice - to Golden Era staff members. After moving to RTC in 1996, Headley's
18 "primary duties" involved "church governance" at a senior level and the application
19 of Scientology religious practices to the staff, duties that indubitably were
20 '''important to the spiritual and pastoral mission of the church.'" Schmoll, 70 Cal.
21 App. 4th at 1443 (quoting Rayburn, 772 F.2d at 1169.) These facts are indisputable.
22 If Claire Headley was not a minister within the meaning of the ministerial exception,
23 it is hard to imagine who would be.
24
25
26
27
28
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V. CONCLUSION
2 For all the foregoing reasons, the Defendants' joint motion for summary
3 judgment dismissing Plaintiff's first claim for relief should be granted.
Respectfully submitted:

JEFFER, MANGELS, BUTLER & MARMARO LLP

MARC MARMARO
AMY LERNER HILL

By: IslMarc Marmaro

MARC MARMARO
Attorneys for Defendant Religious Technology Center

and
RABINOWITZ, BOUDIN, STANDARD, KRINSKY
LIEBERMAN, P.c.
By: IslEric M. Lieberman
Eric M. Lieberman
and
PROSKAUER ROSE LLP
By: IslHarold M. Brody
Harold M. Brody
Attorneys for Defendant Church of Scientology
International

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