Certification From the United States District Court for the Western District of Washington in Ockletree v. Franciscan Health System , 179 Wash. 2d 769 ( 2014 )

C. Johnson, J.

¶1 The certified questions in this case ask us to decide whether the exemption of nonprofit religious organizations from the definition of “employer” under Washington’s Law Against Discrimination (WLAD), chapter 49.60 RCW, violates article I, section 11 or article I, section 12 of the Washington Constitution. Larry C. Ockletree brought suit in state court against Franciscan Health System (FHS), challenging the termination of his employment following a stroke. Ockletree, who is African-American, claimed that his termination was the result of illegal discrimination on the basis of race and disability. FHS removed the suit to federal court and moved to dismiss Ockletree’s claims. FHS argued that it was exempt from WLAD as a nonprofit religious organization. Ockletree challenged the validity of the religious employer exemption under the state and federal constitutions. The district court certified questions to this court asking whether the religious employer exemption violates Washington’s article I, section 11 establishment clause or its article I, section 12 privileges and immunities clause. We answer both questions in the negative.

Certified Questions

12

1. The Washington Law Against Discrimination excludes religious non-profit organizations from its definition of “employer” (Wash. Rev. Code § 49.60.040(11)). Such entities are therefore facially exempt from WLAD’s prohibition of discrimination in the workplace. Does this exemption violate Wash. Const. Article

1, § 11 or § 12?

2. If not, is Wash. Rev. Code § 49.60.040(ll)’s exemption unconstitutional as applied to an employee claiming that the religious non-profit organization discriminated against him for reasons wholly unrelated to any religious purpose, practice, or activity?

Order Certifying Question to the Wash. Supreme Ct. (Certification) at 4.

Facts

¶3 Plaintiff Larry Ockletree was employed as a security guard by FHS in 2010. He staffed a desk in the emergency department at St. Joseph Hospital, where he checked visitors’ identification and issued name tags. While employed by FHS, Ockletree suffered a stroke that impaired his nondominant arm. FHS determined he could not perform the essential functions of his job with or without accommodation, refused his requested accommodation, and terminated his employment.

¶4 Ockletree brought multiple causes of action in state court, including employment discrimination on the basis of race and disability in violation of federal law and WLAD. FHS removed the case to federal court and moved to dismiss four of Ockletree’s claims, including his WLAD claim. Jurisdiction for Ockletree’s federal employment discrimination claim under the Civil Rights Act of 1964, 42 U.S.C. § 2000e-5, depends on whether he timely exhausted administrative remedies. The filing period in question depends on whether he has a valid state law discrimination claim. If Ockletree’s WLAD claim fails, his federal claim is time barred.

¶5 FHS asserts that as a nonprofit religious organization, it is exempt from WLAD’s definition of “employer” and therefore exempt from WLAD’s private cause of action. RCW 49.60.040(11); Certification at 2-3. Ockletree challenges the exemption’s validity under the state and federal constitutions. The United States District Court certified questions to this court asking whether the religious employer exemption violates article I, section 11 or article I, section 12 of the Washington Constitution.¹

Analysis

¶6 The certified questions ask us to determine the constitutionality of the exemption of religious nonprofit organizations from WLAD.² WLAD was enacted in 1949 with the purpose of ending discrimination by employers “on the basis of race, creed, color, or national origin.” Griffin v. Eller, 130 Wn.2d 58,63,922 P.2d 788 (1996). WLAD has expanded over the years to bar discrimination on the basis of age, sex, sexual orientation, and disability, and to incorporate a private right of action for employees and persons who use public accommodations. See RCW 49.60.040.

¶7 As enacted, the law exempted from the definition of “employer” “any religious, charitable, educational, social or fraternal association or corporation, not organized for private profit.” Laws of 1949, ch. 183, § 3(b). In 1957, the legislature rewrote the definition of “employer” to its present form, bringing secular nonprofit organizations within the statute’s ambit and exempting only small employers and religious nonprofits. See Laws of 1957, ch. 37. The definition of “employer” for purposes of WLAD is currently found in RCW 49.60.040(11), which provides, “ ‘Employer’ includes any person acting in the interest of an employer, directly or indirectly, who employs eight or more persons, and does not include any religious or sectarian organization not organized for private profit.”

¶8 The WLAD religious employer exemption has been examined in two earlier cases raising arguments under the state constitution, but in neither case did we expressly reach the state constitutional issue. The first came in 1991, when Nancy Farnam, an employee of a religious nursing home, challenged her dismissal for reporting the removal of a patient’s gastric tube. Farnam v. CRISTA Ministries, 116 Wn.2d 659, 662-66, 807 P.2d 830 (1991). Farnam argued that the WLAD exemption was invalid under article I, section 11 and article I, section 12 of the Washington Constitution. We noted that the arguments were presented to us without sufficient briefing analyzing the state constitutional claims, and we declined to address their merits. However, we noted that we rejected a similar challenge to the federal exemption under the equal protection clause in American Network, Inc. v. Utilities Transportation Commission, 113 Wn.2d 59, 77, 776 P.2d 950 (1989). Farnam, 116 Wn.2d at 681; U.S. Const, amend. XIV.

¶9 A second state constitutional challenge to the religious employer exemption came in 2010, when Angela Erdman, a church elder employed in a secular position, was dismissed on the recommendation of the church tribunal. Erdman v. Chapel Hill Presbyterian Church, 156 Wn. App. 827,234 P.3d 299 (2010) (Erdman I), rev’d on other grounds, 175 Wn.2d 659, 286 P.3d 357 (2012) (Erdman II). Erdman challenged the dismissal, asserting several causes of action, including a violation of WLAD. Moving for summary judgment dismissal of Erdman’s WLAD claim, the church asserted the religious employer exemption. Erdman countered that the exemption was an unconstitutional privilege or immunity under article I, section 12 because it interfered with her fundamental right to pursue an occupation. Just as in Farnam, the Court of Appeals found that Erdman had cited “no relevant authority” to support her state constitutional claim and declined to examine the merits. Erdman I, 156 Wn. App. at 849. We did not take review of Erdman’s article I, section 12 claim and resolved the case on other grounds. See Erdman II, 175 Wn.2d at 683.

¶10 Here, we are asked to confront the question of whether the religious employer exemption violates article I, section 11 or article I, section 12 of the Washington Constitution.

a. Article I, section 12

¶11 Article I, section 12 provides, “No law shall be passed granting to any citizen, class of citizens, or corporation other than municipal, privileges or immunities which upon the same terms shall not equally belong to all citizens, or corporations.” Passed during a period of distrust toward laws that served special interests, the purpose of article I, section 12 is to limit the sort of favoritism that ran rampant during the territorial period. Robert F. Utter & Hugh D. Spitzer, The Washington State Constitution: A Reference Guide 26-27 (G. Alan Tarr ed., 2002). Although the text of the clause was modeled after a similar provision in Oregon’s 1859 Constitution, Washington’s framers explicitly broadened the reach of the clause by including “corporations” in the language of article I, section 12. See State v. Smith, 117 Wn.2d 263, 285, 814 P.2d 652 (1991) (Utter, J., concurring). Our cases have consistently recognized that the text and aims of article I, section 12 differ from that of the federal equal protection clause. Whereas the Fourteenth Amendment to the United States Constitution was generally intended to prevent discrimination against disfavored individuals or groups, article I, section 12 was intended to prevent favoritism and special treatment for a few, to the disadvantage of others. See Smith, 117 Wn.2d at 283 (Utter, J., concurring).

¶12 Despite the historical and textual differences, Washington courts often construed article I, section 12 consistent with the federal equal protection clause for most of the latter half of the previous century. In 2002, however, we recognized some distinctions and, applying the Gunwall³ factors, concluded that article I, section 12, can, in certain circumstances, support an analysis independent of that of the Fourteenth Amendment. Grant County Fire Prot. Dist. No. 5 v. City of Moses Lake, 150 Wn.2d 791, 83 P.3d 419 (2004) (Grant II). Under that approach, we embraced a two-step analysis. The first step is to analyze whether the law in question involves a privilege or immunity. If there is no privilege or immunity involved, then article I, section 12 is not implicated. Grant II, 150 Wn.2d at 812.⁴ If, on the other hand, the law involves a privilege or immunity, the second step in the analysis asks whether the legislature had a “reasonable ground” for granting the privilege or immunity. See Grant County Fire Prot. Dist. No. 5 v. City of Moses Lake, 145 Wn.2d 702,731,42 P.3d 394 (2002) (Grant I).⁵

¶13 Before beginning this analysis, it is important to recognize the breadth of the claim presented. Although much of the argument focuses on this claim against this hospital, the issue is far more significant and broader given the certified questions. We are asked to declare as unconstitutional the exemption for all religious nonprofits, which extends to not only this case, but all other employers covered by the exemption, including universities, elementary schools, Catholic Community Services, Jewish Family Services, CRISTA Ministries, YMCA, YWCA, Salvation Army, and St. Vincent De Paul. Arguably, churches, synagogues, and mosques would be exposed as well. We further note that since enacted in 1949, the legislature has not revised this exemption to limit its scope. With that said, we turn to whether the definition of “employer” in RCW 49.60.040(11) involves a privilege or immunity.

i. Does RCW 49.60.040(11) grant a privilege or immunity ?⁶

¶14 Ockletree argues that under the dictionary definition of “privilege,” “the right to work free from discrimination is a privilege of citizenship” and that the legislature grants this “privilege” on unequal terms. Corrected Pl.’s Reply Br. at 14. He further argues that the legislature grants religious employers “ ‘immunity’ from the antidiscrimination laws applicable to other employers and, thus, grants them a ‘privilege’ to discriminate against employees” without civil liability. Pl.’s Opening Br. at 28. FHS counters that the dictionary definition of “privilege” is not coextensive with the meaning we give that term in the context of article I, section 12 and that the definition of “employer” in RCW 49.60.040(11) does not involve a privilege or immunity for purposes of that section.

¶15 As FHS correctly observes, in a constitutional sense a privilege has been more narrowly construed than the arguments advanced by Ockletree. In defining the scope of a privilege, we have emphasized that “not every statute authorizing a particular class to do or obtain something involves a ‘privilege’ subject to article I, section 12.” Grant II, 150 Wn.2d at 812.⁷ Rather, in early cases, we clarified that the term “privileges and immunities” refers “alone to those fundamental rights which belong to the citizens of [Washington] by reason of such citizenship.” State v. Vance, 29 Wash. 435,458, 70 R 34 (1902). Accordingly we have held that not every legislative classification constitutes a “privilege” within the meaning of article I, section 12 but only those where it is, “in its very nature, such a fundamental right of a citizen that it may be said to come within the prohibition of the constitution, or to have been had in mind by the framers of that organic law.” Vance, 29 Wash, at 458-59. As we said in Vance,

[a] statute can be declared unconstitutional only where specific restrictions upon the power of the legislature can be pointed out, and the case shown to come within them, and not upon any general theory that the statute conflicts with a spirit supposed to pervade the constitution, but not expressed in words.

Vance, 29 Wash, at 459 (citing Smith v. City of Seattle, 25 Wash. 300, 65 P. 612 (1901)). Generally, rights left to the discretion of the legislature have not been considered fundamental. Grant II, 150 Wn.2d at 814.

¶16 Ockletree asks us to embrace a broader meaning of “privilege or immunity” for purposes of article I, section 12 to mean any exemption in derogation of common right. Pl.’s Opening Br. at 28 n.14. However, accepting Ockletree’s broad definition not only would be inconsistent with our article I, section 12 jurisprudence but could also produce harmful consequences. Accepting Ockletree’s definition means recognizing a privilege anytime a statute grants a right to some but not others. In other words, many legislative decisions could be claimed as privileges. As a result, we could be called on to second-guess the distinctions drawn by the legislature for policy reasons nearly every time it enacts a statute. For example, the property tax exemptions for citizens “[s]ixty-one years of age or older” and “veterans with one hundred percent service-connected disabilities” could be challenged as unconstitutional grants of special privileges to certain classes of citizens but not others. RCW 84.36.381(3)(a)(i), .379. Similarly, exemptions from emission control inspections for “[f]arm vehicles,” “[s]treet rod vehicles,” “[hjybrid motor vehicles,” and “[c]lasses of motor vehicles exempted by the director of the department of ecology,” among others, would all be subject to challenge under article I, section 12. RCW 46.16A.060(2)(e), (f), (i), (h). We therefore reject Ockletree’s invitation to broaden the meaning of the word “privilege” for purposes of article I, section 12 and reiterate that a privilege in this context is limited to those fundamental rights of citizenship.

¶17 Ockletree’s argument seems to be that a cause of action for discrimination by a private actor in a private employment setting is a fundamental right of citizenship. However, Ockletree’s assertion has no support in our jurisprudence or in any other state or federal court. As amici Religious Organizations notes, absent state action, courts have uniformly declined to prohibit employment discrimination on constitutional grounds. See Moran v. GTECH Corp., 989 F. Supp. 84, 93 (D.R.I.1997); Am. Nat’l Ins. Co. v. Fair Emp’t & Hous. Comm’n, 32 Cal. 3d 603, 619, 651 P.2d 1151, 186 Cal. Rptr. 345 (1982) (Mosk, J., dissenting); Ky. Comm’n on Human Rights v. Fraser, 625 S.W.2d 852, 854 (Ky. 1981). Because discrimination in private employment cannot “be said to come within the prohibition of the constitution,” it is not a fundamental right. Rather, protection from discrimination in private employment is a creature of statutory enactment. Notably, WLAD was not enacted until 1949, over half a century after the adoption of our constitution. And the private cause of action under the statute was not created until 1973. Laws of 1973, ch. 141. Moreover, the exemption for religious organizations has been part of the antidiscrimination statute from the time it was enacted and has never been amended. The timing of WLAD’s enactment further supports our conclusion that the right at issue here is not fundamental to state citizenship and is therefore not a privilege within the meaning of article I, section 12.

¶18 Our determination concerning the nature of the right at issue here is also consistent with our holding in Griffin, 130 Wn.2d 58. In Griffin, we considered and rejected a similar challenge involving the exemption in WLAD for employers with fewer than eight employees. There, we applied a federal equal protection analysis and held that the small employer exemption does not violate article I, section 12. Notably, in that case we said that the protections extended by the law against discrimination involve an “important” right, not a fundamental right. Griffin, 130 Wn.2d at 65. And we evaluated the small employer exemption using rational basis review, an approach that traditionally does not apply to fundamental rights. See Amunrud v. Bd. of Appeals, 158 Wn.2d 208, 222, 143 P.3d 571 (2006) (“When state action does not affect a fundamental right, the proper standard of review is rational basis.”). If we accepted Ockletree’s argument that the right at issue here is fundamental, we would be implicitly embracing strict scrutiny for analyzing the exemption under the federal equal protection clause. See Am. Legion Post No. 149 v. Dep’t of Health, 164 Wn.2d 570, 609,192 P.3d 306 (2008) (strict scrutiny applies to laws burdening fundamental rights). As such, our decision would be at odds with our analysis and conclusion in Griffin. Instead, we adhere to what we recognized and held in Griffin-, that a right of action for discrimination in private employment is an important right, but not a fundamental one. Therefore, it is not a privilege in the state constitutional sense.

¶19 Ockletree also contends that RCW 49.60.040(11) implicates the fundamental right to “ ‘carry on business’ ” within the state, and that the statute grants an exemption to religious hospitals that does not belong to secular hospitals carrying on the same business. Corrected Pl.’s Reply Br. at 15 (quoting Am.. Legion, 164 Wn.2d at 607).⁸ However, we rejected the notion that the privileges and immunities clause is violated anytime the legislature treats similarly situated businesses differently in American Legion. See Am. Legion, 164 Wn.2d at 607. There, we considered an article I, section 12 challenge to a law that banned smoking in a public place or in any place of employment. As in this case, the petitioner argued that the law involved the fundamental right to carry on business and that the law treated two similarly situated businesses differently in violation of the privileges and immunities clause. We disagreed and clarified that “a ‘privilege’ normally relates to an exemption from a regulatory law that has the effect of benefiting certain businesses at the expense of others.” Am. Legion, 164 Wn.2d at 607. We held in American Legion that the law did not involve a privilege for purposes of article I, section 12 because the law did not prevent any entity from engaging in business. Rather, we said that the law merely prohibited smoking within a place of employment, which is not a fundamental right of citizenship.

¶20 Here, Ockletree fails to establish how RCW 49.60-.040(11) confers a benefit to religious nonprofits at the expense of other organizations that are subject to WLAD. While Ockletree asserts that religious nonprofits are not subject to “liability for damages under WLAD or the costs attendant on statutory compliance,” he fails to show how secular employers who are subject to the antidiscrimination law bear any greater expense or costs because religious nonprofits are exempt, and we find no basis to support that argument. Pl.’s Opening Br. at 28.⁹ Thus, the exemption does not offend the anticompetitive concerns underlying article I, section 12. Moreover, nonprofits run by religious organizations were not the type of powerful business interests that the framers of article I, section 12 had in mind when drafting that section. As Ockletree acknowledges, article I, section 12 was historically applied “ ‘in a manner consistent with its aim of eliminating governmental favoritism toward certain business interests.’ ” Pl.’s Opening Br. at 24 (quoting Michael Bindas, Seth Cooper, David K. DeWolf & Michael J. Reitz, The Washington Supreme Court and the State Constitution: A 2012 Assessment, 46 Gonz. L. Rev. 1, 25 (2010/11)).

¶21 Finally, Ockletree’s assertion that WLAD authorizes religious nonprofits to discriminate is without merit. The statute plainly does not state that religious nonprofits can discriminate against employees on the bases listed. And religious nonprofits are arguably subject to federal antidiscrimination laws. It may be that Ockletree could find protection under federal law, but we leave that issue to the federal court to decide. Here, we conclude only that under an analysis independent of the federal equal protection clause, article I, section 12 does not apply to invalidate the religious nonprofit exemption in WLAD.

ii. Is there a “reasonable ground” for the classification?

¶22 Even if the exemption in WLAD for religious nonprofits did implicate a “privilege or immunity,” Ockletree’s article I, section 12 challenge falls short because reasonable grounds exist for this distinction. In Grant I, we derived the “reasonable ground” test for privileges and immunities challenges from our early 20th century cases. The test comprises two prongs: first, whether the law applies equally to “all persons within a designated class,” and second, whether there is a “reasonable ground for distinguishing between those who fall within the class and those who do not.” Grant 1,145 Wn.2d at 731.¹⁰ To meet the reasonable ground requirement, distinctions must rest on “real and substantial differences bearing a natural, reasonable, and just relation to the subject matter of the act.” State ex rel. Bacich v. Huse, 187 Wash. 75,84, 59 P.2d 1101 (1936), overruled on other grounds by Puget Sound Gillnetters Ass’n v. Moos, 92 Wn.2d 939, 603 P.2d 819 (1979). Here, no one disputes that the challenged exemption applies equally to all religious nonprofits. The question, then, is whether there is a “reasonable ground” for distinguishing between religious nonprofits and other nonprofits.

¶23 As amici Pacific Northwest Conference of the United Methodist Church et al. (amici United Methodist Church) note, there are real and substantial differences between religious nonprofits and secular nonprofits that make it reasonable for the legislature to treat them differently under WLAD. One of the primary differences is that religious organizations have a right to religious liberty guaranteed by the state free exercise clause under article I, section 11. We have recognized that article I, section 11 provides greater protection for the free exercise of religion than the First Amendment. First Covenant Church v. City of Seattle, 120 Wn.2d 203, 226, 840 P.2d 174 (1992); U.S. Const, amend. I. The free exercise clause provides, “Absolute freedom of conscience in all matters of religious sentiment, belief and worship, shall be guaranteed to every individual, and no one shall be molested or disturbed in person or property on account of religion.” Wash. Const, art. I, § 11. Amici United Methodist Church notes that this is the reason religious organizations may, and indeed sometimes must, be treated differently than nonreligious organizations.

¶24 The United States Supreme Court has recognized that exemptions for religious organizations from civil discrimination suits protect religious freedom by avoiding state interference with religious autonomy and practice. Corp. of Presiding Bishop of Church of Jesus Christ of Latter-Day Saints v. Amos, 483 U.S. 327, 336, 107 S. Ct. 2862,97 L. Ed. 2d 273 (1987). In Amos, the Court considered a challenge to the exemption of religious organizations from Title VII of the Civil Rights Act of 1964’s (Title VII), 42 U.S.C. § 2000e, prohibition against discrimination in employment. There, the Court rejected the argument that applying the exemption to cover the “secular” activities of religious employers violated the establishment clause of the United States Constitution. The Court explained that

it is a significant burden on a religious organization to require it, on pain of substantial liability, to predict which of its activities a secular court will consider religious. The line is hardly a bright one, and an organization might understandably be concerned that a judge would not understand its religious tenets and sense of mission. Fear of potential liability might affect the way an organization carried out what it understood to be its religious mission.

Amos, 483 U.S. at 336 (footnote omitted). The Court further rejected the argument that the exemption violated equal protection principles by giving less protection to employees of religious organizations than employees of secular employers. Applying rational basis review, the Court upheld the exemption on the basis that it “is rationally related to the legitimate purpose of alleviating significant governmental interference with the ability of religious organizations to define and carry out their religious missions.” Amos, 483 U.S. at 339. We agree with this reasoning.

¶25 Here, the religious employer exemption satisfies the reasonable ground test because it similarly accommodates the broad protections to religious freedoms afforded by Washington’s article I, section 11. The legislature gives effect to these protections by choosing to avoid potential entanglements between the state and religion that could occur in enforcing WLAD against religious nonprofits. As amici Religious Organizations points out, the wide scope of WLAD justifies the broader exemption under the WLAD for religious employers than under Title VII. In addition to the classes covered by Title VII, the WLAD extends employment discrimination protection to classes such as age, sexual orientation, gender identity, and marital and veteran status. RCW 49.60.030, .180. Amici Religious Organizations notes that the legislature made a reasonable policy choice to avoid the potential pitfalls of attempting to reconcile Washington’s growing list of protected categories (arguably, many of which with a religious aspect) with the multitude of religious belief systems. Moreover, as noted by amici, similarly broad exemptions for religious employers have been upheld in other states. See Pieszak v. Glendale Adventist Med. Ctr., 112 F. Supp. 2d 970, 997 (C.D. Cal. 2000) (finding California’s blanket exemption of all religious nonprofit organizations from the state antidiscrimination statute constitutional). Because of the evidentiary standards and the nature of the inquiry for discrimination claims, the legislature could reasonably conclude that religious organizations should be relieved of the burden of predicting when their religious beliefs would be regarded as sufficient justification for an employment decision.¹¹

b. Article I, section 11

¶26 The second question presented is whether the exemption of religious nonprofit employers from WLAD violates the establishment clause of article I, section 11. Article I, section 11 provides in part, “No public money or property shall be appropriated for or applied to any religious worship, exercise or instruction, or the support of any religious establishment.”

¶27 Ockletree initially asserts that WLAD’s definition of “employer” favors religious nonprofits and that such favor constitutes “support” for “religious establishment [s]” in violation of article I, section 11.¹² However, Ockletree misconstrues the meaning of the phrase “support of any religious establishment.” We previously clarified that “[t]he terms ‘appropriated’ and ‘applied’ modify religious worship, exercise or instruction, and the support of any religious establishment. Thus, what article I, section 11 prohibits is the ‘appropriation’... of public money to any of these enumerated purposes.” State ex rel. Gallwey v. Grimm, 146 Wn.2d 445, 466, 48 P.3d 274 (2002); see also Malyon v. Pierce County, 131 Wn.2d 779, 793, 935 P.2d 1272 (1997) (“The state provision explicitly prohibits appropriation or application of public money or property for four explicit purposes, religious worship, religious exercise, religious instruction, and support of any religious establishment.”). Therefore, we have said that an establishment clause challenge requires us to ask two questions: “(1) Is ‘public money or property’ involved? and (2) If so, is it to be ‘appropriated for or applied to any religious worship, exercise or instruction, or the support of any religious establishment’?” Wash. Health Care Facilities Auth. v. Spellman, 96 Wn.2d 68, 71, 633 P.2d 866 (1981). Where no public money or property is involved, we need not reach the second question. Wash. Health Care Facilities Auth., 96 Wn.2d 68.¹³

¶28 Ockletree asserts that “[i]n the event this Court limits article I, section 11 to circumstances where public money or property is provided to a religious organization, the WLAD religious nonprofit exemption is still unconstitutional because the exemption . . . provides a financial benefit.” Pl.’s Opening Br. at 44. Ockletree argues that the challenged exemption provides indirect financial support to religious nonprofits by relieving them “from the necessary financial costs of compliance with WLAD and potential damages for violation.” Pl.’s Opening Br. at 46. Indirect financial support, Ockletree contends, “violates the state Constitution just as much as direct payment of funds.” Pl.’s Opening Br. at 44.

¶29 We find nothing in our case law, however, to support Ockletree’s position. To the contrary, our establishment clause jurisprudence makes clear that an indirect financial benefit to a religious organization does not violate the state constitution. For instance, in Washington Health Care Facilities Authority, we held that allowing religious hospitals to raise money through tax exempt bonds did not violate article I, section 11. In determining whether public money or property was involved, we reasoned:

The only “public” financial assistance given borrower hospitals here is indirect, not measurable in dollars, and is not state aid: Those who receive the interest from tax exempt bonds are relieved of the obligation to pay a tax on this income. This tax relief can hardly be called an appropriation or application of public money unless the income which is taxed is claimed to be public money in the first place.

Wash. Health Care Facilities Auth., 96 Wn.2d at 73. Notably, in discussing Washington Health Care Facilities Authority in a later case, we said that “[b]y making this method of financing available to a private religious institution the state conferred a tremendous financial benefit on a religious establishment but without violating the state constitution in the slightest” Malyon, 131 Wn.2d at 801 (emphasis added). By contrast, in Visser, which Ockletree cites for support, we held that providing free transportation to or from religious schools violated article I, section 11 because it constituted “a direct, substantial, and continuing public subsidy to the schools.” Visser v. Nooksack Valley Sch. Dist. No. 506, 33 Wn.2d 699, 708, 207 P.2d 198 (1949).

¶30 As FHS points out, this case is unlike Visser, where publicly funded transportation to and from religious schools provided a direct financial benefit by defraying the costs those schools would have otherwise incurred for student transportation. Here, on the other hand, no public funding is implicated by WLAD’s definition of “employer.” It is simply a definition. Thus, the exemption of religious employers from WLAD provides no “direct” financial benefit or subsidy to religious nonprofit organizations. Rather, any benefit received by the religious employers as a result of the exemption from discrimination suits is indirect. Because the challenged exemption from WLAD does not implicate public funding or property, we find no violation of article I, section 11.

Conclusion

¶31 We answer the certified questions as follows:

(1) WLAD’s definition of “employer” under RCW 49.60-.040(11) does not involve a privilege or immunity and therefore does not violate article I, section 12’s privileges and immunities clause.

(2) WLAD’s definition of “employer” under RCW 49.60.040(11) does not involve the appropriation of money or application of property and therefore does not fall within the prohibition of article I, section ll’s establishment clause.

Madsen, C.J., and Owens and J.M. Johnson, JJ., concur.

1 Five amici briefs were filed in this case by (1) Washington State Association for Justice Foundation; (2) Washington Employment Lawyers Association and Legal Voice; (3) American Civil Liberties Union of Washington and Anti-Defamation League; (4) Pacific Northwest Conference of the United Methodist Church, Olympia Diocese of the Episcopal Church, and Presbytery of Seattle of the Presbyterian Church USA; and (5) Religious Organizations.

2 WLAD is a regulatory law enacted under the legislature’s police power to promote the health, peace, safety, and general welfare of the people of Washington. See RCW 49.60.010.

3 State v. Gunwall, 106 Wn.2d 54, 720 P.2d 808 (1986).

4 If there is no privilege or immunity involved, this leaves only the question of whether the challenged statute violates the equal protection clause of the federal constitution. Am. Legion Post No. 149 v. Dep’t of Health, 164 Wn.2d 570, 608,192 P.3d 306 (2008). Whether the exemption of religious nonprofits from WTjAD violates the federal equal protection clause is not a question of state law certified to this court.

5 When we reconsidered that decision in Grant II, we did not reach the reasonable-grounds test but vacated Grant I on the sole ground that “no privilege, i.e., fundamental right of state citizenship, [was] at issue in this case.” Grant II, 150 Wn.2d at 814.

6 As the parties note, we have at times used the terms “privilege” and “immunity” interchangeably. Because the parties treat them as synonymous in this case, we will do the same. And to the extent that they are designed to avoid favoritism, they are the same.

7 In fact, since announcing an independent interpretation of article I, section 12, we have not found a statute to violate the privileges and immunities clause. See Am. Legion, 164 Wn.2d at 606-07; Ventenbergs v. City of Seattle, 163 Wn.2d 92,103, 178 P.3d 960 (2008); Madison v. State, 161 Wn.2d 85, 96-97, 163 P.3d 757 (2007) (plurality opinion); Andersen v. King County, 158 Wn.2d 1,16,138 P.3d 963 (2006) (plurality opinion); Grant II, 150 Wn.2d at 816.

8 This argument is not particularly helpful to the certified question because as noted, Ockletree’s challenge is not limited to employment in religious hospitals. Rather, he challenges the exemption facially, which covers all religious employers, including churches and schools.

9 Ockletree also attempts to distinguish American. Legion on the grounds that while smoking is not a fundamental right of citizenship, the legislature “has declared that the right to work free from discrimination is a privilege of citizenship.” Corrected Pl.’s Reply Br. at 14 (citing RCW 49.60.010). But RCW 49.60.010 does not state that the right to be free from discrimination is a privilege, rather it says that “discrimination threatens . .. the rights and proper privileges of its inhabitants.”

10 As previously noted, we did not reach the reasonable grounds test in Grant II. Instead, we vacated Grant I on the sole ground that “no privilege, i.e., fundamental right of state citizenship, [was] at issue in this case.” Grant II, 150 Wn.2d at 814. Therefore, the reasonable grounds test, as articulated in Grant I, is still good law and is the applicable test here.

11 It is worth stressing that we do not hold that the state free exercise clause requires such a broad exemption for religious organizations under WLAD, rather we hold only that a reasonable ground exists to distinguish between religious and secular organizations based on the potential for government interference with religious freedoms in enforcing WLAD against religious nonprofits.

12 Ockletree also argues that the WLAD exemption is invalid for “justifyfing] practices inconsistent with the peace and safety of the state.” Wash. Const, art. I, § 11. But this language pertains to the free exercise clause, not the establishment clause, and Ockletree does not challenge the exemption on free exercise grounds. Thus, the “peace and safety” provision is irrelevant to our analysis.

13 As FHS correctly observes, Ockletree’s Gunwall analysis of article I, section 11 is unnecessary and unhelpful. We have already determined that a different interpretation should apply under the state establishment clause as compared to the federal establishment clause. Malyon, 131 Wn.2d at 798.