In a stunning decision that has the potential to change how independent private schools operate, a federal district judge recently ruled in Conrad vs. Baltimore Lutheran High School Association d/b/a Concordia Preparatory School that an educational institution’s Section 501(c)(3) tax exemption constitutes “federal financial assistance” that places independent private K-12 schools under the auspices of Title IX. To say this decision is a game-changer for private schools is an understatement, as the implications are wide and profound. A similar decision was issued by a federal court in California a few days later. This is an important development and one that all K-12 private schools should be aware of and monitor closely.
In the Maryland case, Andrea Conrad filed an action in the United States District Court for the District of Maryland on behalf of her minor daughter, HC, alleging that HC was sexually harassed and/or abused. student assault while attending Concordia Preparatory. School (“SPC”). Specifically, Conrad alleged, among other things, that the CPS fostered a “hyper-sexualized” culture in which “HC suffered unwelcome sexual advances from certain male students who were emboldened by formal and informal and tolerated the practices at school”. Such advances, according to Conrad, included receiving “sexually suggestive texts[s]of male students, culminating in one such student allegedly sexually assaulting HC During these events, Conrad alleged that she attempted to resolve the issues with the CPS, who were “dismissive” of allegations regarding the text messages, refused to discipline the student involved both before and after the alleged assault, and did not investigate or contact law enforcement authorities.
In the case of California (EH vs. Valley Christian Academy), a student played on her high school football team. His school played Valley Christian Academy (“VCA”) in a scrimmage. When EH removed her helmet at the end of the game and VCA realized she was female, she was subjected to dirty looks and disbelieving stares from observers, coaches and administrators. . VCA later declined to play any 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 decided to dismiss claims against them under Title IX, arguing that they were not subject to the requirements of the law because they were not recipients of federal financial aid.
Both courts held that receipt of a tax exemption amounted to receipt of federal financial assistance under Title IX. Judge Richard Bennett said in the CPS case that “CPS cannot avail itself of the federal tax exemption but not adhere to the Title IX mandates.” In particular, relying on the precedent of the Supreme Court and the precedent of the United States Court of Appeals for the Fourth Circuit, the court concluded that an institution always qualifies as a beneficiary of a Federal assistance under Title IX even if it did not request the assistance or the assistance is provided indirectly. On this basis, the court held that benefits received under an institution’s 501(c)(3) tax-exempt status constituted federal financial assistance for Title IX purposes, and that the CPS was therefore covered by law. Further, both courts based their findings on public policy that federal funds should not be used to subsidize gender discrimination.
These decisions will certainly have a significant impact on the relationship between the school and K-12 students. Although challenges to the decisions may follow in the future, their fate is uncertain. Thus, private K-12 schools should be aware that they may be subject to the requirements of Title IX or other comparable federal laws. Additionally, private schools should also be aware of the potential impacts of applying for and accepting direct forms of federal assistance such as SBA loans and similar benefits, which could also place them under the coverage of certain laws.
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