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Fair Employment Practices Com. v. Tenerovitz

JANUARY 6, 1975.

THE FAIR EMPLOYMENT PRACTICES COMMISSION, PETITIONER-APPELLANT,

v.

THOMAS TENEROVITZ ET AL., DEFENDANTS-APPELLEES.



APPEAL from the Circuit Court of Cook County; the Hon. F. EMMETT MORRISSEY, Judge, presiding.

MR. PRESIDING JUSTICE BURKE DELIVERED THE OPINION OF THE COURT:

This is an action by the Fair Employment Practices Commission of Illinois (hereinafter the Commission) to have the circuit court of Cook County order the defendants to obey certain subpoenas issued by the Commission. Three of the defendants are the agents of several hospitals which are associated with the fourth defendant, Missionary Sisters of the Sacred Heart. The subpoenas were issued by the Commission in connection with certain investigations into charges of unfair employment practices in violation of section 3(a) of the Fair Employment Practices Act (Ill. Rev. Stat. 1971, ch. 48, par. 853(a)) which allegedly took place at the hospitals with which the defendants were associated. The court dismissed the Commission's petition to have the subpoenas enforced on the ground that the defendants were exempt from the Act's provisions due to their religious affiliation as provided in section 2(d) of the Act. (Ill. Rev. Stat. 1971, ch. 48, par. 852(d).) The Commission's later motion to vacate this order was also denied by the court. The Commission appeals from these two orders, contending that the defendants are not exempt under the Act.

Certain charges were filed with the Commission in 1971 and 1972 concerning alleged unfair employment practices that took place at Columbus and St. Francis Xavier Cabrini Hospitals. The charges alleged that these hospitals had discriminated either on the basis of race or national origin and ancestry in the advancement, reinstatement, hiring or termination of the complainants. The Commission then issued subpoenas to the defendants requiring their appearance and their production of personnel records concerning the charges. The defendants did not comply with the subpoenas, contending that they were exempt from the provisions of the Act. The Commission, therefore, petitioned the circuit court of Cook County in accordance with section 9(d) of the Fair Employment Practices Act (Ill. Rev. Stat. 1971, ch. 48, par. 859(d)) for an order requiring the defendants to comply with the subpoenas. The defendants then made a motion to dismiss the Commission's petition on the ground that they were exempt under section 2(d) of the Act. (Ill. Rev. Stat. 1971, ch. 48, par. 852(d)) because the two hospitals were owned and operated by a religious order of nuns of the Roman Catholic Church.

Section 3(a) of the Fair Employment Practices Act (Ill. Rev. Stat. 1971, ch. 48, par. 853(a)) provides that it is an unfair employment practice:

"For any employer, because of the race, color, religion, sex, national origin or ancestry of an individual to refuse to hire, to segregate, or otherwise to discriminate against such individual with respect to hire, selection and training for apprenticeship in any trade or craft, tenure, terms or conditions of employment."

Section 2(d) of the Act (Ill. Rev. Stat. 1971, ch. 48, par. 852(d)) then states that:

"The term `employer' does not include any not for profit corporation or association organized for fraternal or religious purposes, nor any school, educational or charitable institution owned and conducted by, or affiliated with, a church or religious institution, nor any exclusively social club, corporation or association that is not organized for profit."

The defendants contend that section 2(d) exempts their hospitals from the provisions of the Act.

Section 2(d) defines three categories of organizations which are not included in the term "employer." They are: (1) "any not for profit corporation or association organized for fraternal or religious purposes,"; (2) "any school, educational or charitable institution owned and conducted by, or affiliated with, a church or religious institution,"; and (3) "any exclusively social club, corporation or association that is not organized for profit." The motions presented and hearings held in the lower court primarily concerned whether the hospitals were within the second category under the designation of a "charitable institution owned and conducted by, or affiliated with, a church or religious institution."

The defendants attached to their motion to dismiss an affidavit which stated that Columbus and St. Francis Xavier Cabrini Hospitals were owned and operated by a corporation known as the Missionary Sisters of the Sacred Heart. The corporation, stated the affidavit, was solely owned by a religious order of nuns of the Roman Catholic Church. The function of this corporation was to operate hospital facilities on a religiously oriented, not-for-profit basis and also to train nurses.

None of these contentions was disputed by the Commission at a hearing held before the court subsequent to the defendants' motion. The Commission's attorney during the hearing agreed that the hospitals were operated on a not-for-profit basis and the Missionary Sisters were affiliated with the Roman Catholic Church. In response to an inquiry into where any excess funds from the hospital operations would go, the defendants' attorney stated that they were plowed back into the hospital operation. Upon this evidence the court granted the defendants' motion to dismiss the Commission's petition. The court found that the defendants were exempt under section 2(d) of the Act.

A month thereafter the Commission filed a motion to vacate the order granting the defendants' motion to dismiss the Commission's petition. The motion alleged that there had been since January 5, 1973, four separate corporations with an interest in the hospitals rather than only one as alleged in the defendants' prior motion to dismiss. The Commission attached to its motion the articles of incorporation for these four corporations. The four corporations were: (1) Columbus-Cuneo-Cabrini Medical Center, Inc.; (2) Missionary Sisters of the Sacred Heart, Inc.; (3) Missionary Sisters of the Sacred Heart — Midwest Province, Inc.; and (4) Columbus-Cuneo-Cabrini Medical Foundation, Inc. The Medical Center was incorporated in 1903, while the other three corporations were all incorporated on January 5, 1973. The Commission's motion contended that because the medical center which now operated the hospitals was a separate corporation from the Missionary Sisters, therefore the hospitals were no longer entitled to an exemption under section 2(d) of the Act.

A letter was sent by the defendants' attorney to the Commission's attorney which explained the relationship of these four corporations. The Commission then attached this letter to a motion for summary judgment later presented to the court. The letter and the articles of incorporation of the four corporations were the primary focus of discussion at a subsequent hearing held before the court.

Prior to January 5, 1973, there was only one corporation, the Missionary Sisters of the Sacred Heart, which was incorporated in 1903. The articles of incorporation stated that the purpose of this corporation was to establish and maintain hospitals and training schools for nurses all of which is "for charitable purposes and not for pecuniary profit." Nowhere in the proceeding below did the Commission dispute the fact that prior ...


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