In a stunning decision that has the potential to change the way independent private schools operate, a federal district judge recently ruled in Conrad v. Baltimore Lutheran High School Association d/b/a Concordia Preparatory School that an education institution’s § 501(c)(3) tax exemption constitutes “federal financial assistance” that brings private independent K-12 schools under the auspices of Title IX. To say that this decision is a “game changer” for private schools is an understatement, as the implications are wide and far-reaching. A similar decision was reached by a California federal court just days later. This is a significant development and one that all private K-12 schools should be aware of and watching closely.
In the Maryland case, Andrea Conrad filed suit in the United States District Court for the District of Maryland on behalf of her minor daughter, H.C., alleging that H.C. was subjected to student-on-student sexual harassment and/or assault while attending Concordia Preparatory School (“CPS”). Specifically, Conrad alleged, among other things, that CPS fostered a “hyper-sexualized” culture in which “H.C. experienced unwelcome sexual advances from some male students who were emboldened by formal and informal ‘traditions’ and condoned practices at the school.” Such advances, according to Conrad, included the receipt of “sexually suggestive text[s]” from male students, culminating in one such student allegedly sexually assaulting H.C. During the course of these events, Conrad alleged that she attempted to address the issues with CPS, which was “dismissive” of the allegations regarding the text messages, refused to discipline the male student involved both before and after the alleged assault, and failed to conduct an investigation or contact law enforcement authorities.
In the California case (E.H. v. Valley Christian Academy), a female student played on the football team for her high school. Her school played Valley Christian Academy (“VCA”) in a scrimmage. When E.H. removed her helmet at the end of the game, and VCA realized she was female, she was subjected to dirty looks and stares of disbelief from observers, coaches, and administrators. VCA thereafter refused to play further games against her high school based on VCA’s belief in the “guiding principles of the Bible regarding the care of a woman.”
Both schools moved to dismiss the claims against them under Title IX, arguing that they were not subject to the requirements of the statute because they were not recipients of federal financial assistance.
Both courts held that receipt of a tax exemption is tantamount to receipt of federal financial assistance under Title IX. Judge Richard Bennett held in the CPS case that “CPS cannot avail itself of federal tax exemption but not adhere to the mandates of Title IX.” In particular, relying on Supreme Court precedent, and precedent from the United States Court of Appeals for the Fourth Circuit, the court concluded that an institution still qualifies as a recipient of federal assistance under Title IX even if it did not apply for the aid or the aid is indirectly provided. On that basis, the court held that the benefits received under an institution’s § 501(c)(3) tax exempt status constitutes federal financial assistance for the purposes of Title IX, and that CPS was covered under the statute as a result. In addition, both courts based their holdings on the public policy that federal funds should not be used to subsidize discrimination based on gender.
These decisions are sure to have far-reaching impacts on institution-student relations at the K-12 level. While challenges to the decisions may follow in the future, their fate is uncertain. Thus, private K-12 schools should be on notice that they may be subject to the requirements of Title IX or other comparable federal laws. Additionally, private schools should also be mindful of the potential impacts of applying for and accepting direct forms of federal assistance such as SBA loans and similar benefits, which could also bring them under the coverage of certain laws.
Opinions and conclusions in this post are solely those of the author unless otherwise indicated. The information contained in this blog is general in nature and is not offered and cannot be considered as legal advice for any particular situation. The author has provided the links referenced above for information purposes only and by doing so, does not adopt or incorporate the contents. Any federal tax advice provided in this communication is not intended or written by the author to be used, and cannot be used by the recipient, for the purpose of avoiding penalties which may be imposed on the recipient by the IRS. Please contact the author if you would like to receive written advice in a format which complies with IRS rules and may be relied upon to avoid penalties.
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