Fourth Circuit Finds 501(c)(3) Status Does Not Subject Private Schools to Title IX

Title IX, like Title VI and Section 504, is applicable to schools that accept federal financial assistance. Public schools receive federal funds and are thus subject to these laws. But private, tax-exempt schools have long operated with the understanding that they are not subject to these laws. In 2022, however, a district court in Maryland and one in California rocked the private school community by determining that a private school’s tax-exempt status constituted the receipt of federal financial assistance requiring compliance with Title IX. The Fourth Circuit has now reversed the Maryland decision, Buettner-Hartsoe v. Baltimore Lutheran High School Associationd/b/a Concordia Preparatory School, finding that a tax exemption is not the same as the monetary grant contemplated by Title IX.

Four Fundamental Takeaways From the Eleventh Circuit’s Approval of School Transgender Bathroom Ban

The Eleventh Circuit Court of Appeals recently became the first Federal appellate court to decide that a school policy separating student bathrooms based on “biological sex” “passes constitutional muster and comports with Title IX.” Three judges dissented.

According to the seven-judge majority’, bathrooms can be segregated by “biological sex” as evidenced by the student’s enrollment documents even if doing so excludes transgender students from bathrooms matching their gender identities. Such a rule is not required, but the decision gives a green light within the Eleventh Circuit’s jurisdiction (Alabama, Florida, and Georgia) for schools to choose to implement such a rule.

The decision, Adams v. School Board of St. Johns County, Florida, conflicts with decisions by two other Federal appellate courts and does not change the law in those states (Illinois, Indiana, Maryland, North Carolina, South Carolina, Virginia, West Virginia, and Wisconsin). So, it may be well-suited for review by the U.S. Supreme Court.

Unless and until that happens, however, the 150-page decision adds to school leaders’ confusion about handling requests from transgender students. The case leaves many unanswered questions, even for schools within the Eleventh Circuit’s jurisdiction and jurisdictions like the Fifth Circuit (Louisiana, Mississippi, Texas), which do not have a conflicting decision. It could even raise questions for any employer subject to Title VII when addressing a request about facilities by a transgender employee. So much for legal opinions clarifying the law for us!

So, what do you need to know? Keep reading for four fundamental takeaways to help cut through the confusion on this critical case.

Timing is Everything: Recent Case Highlights the Importance of Timing in Retaliation Cases

A recent court decision out of Pennsylvania provides an excellent case study on retaliation rules in Title IX cases. In M.D. v. Trinity Area School District, a Federal trial court allowed a student’s Title IX retaliation lawsuit against her school to move forward to the discovery stage. A key to the court’s decision was the “suggestive timing” between the student’s participation in the Title IX process and a negative action taken against her by a coach. The case is a good reminder of many of the fundamentals of Title IX retaliation claims, including the importance of timing.

Does Title IX Apply to Tax-Exempt Private Schools? Two Courts Say Yes

By Leila Gary, Jackie Gharapour Wernz, & Leah Northener

It’s well established that Title IX applies only to entities that receive federal financial assistance, which traditionally has been interpreted to apply to a school’s actual receipt of federal money, such as special education funds. Two recent decisions from federal courts in  Maryland and California have turned this traditional understanding on its head, holding that a school’s tax-exempt status under the federal tax code is the functional equivalent of receiving funds. What do these decisions mean for tax-exempt private and independent schools?    

The Maryland case, Buettner-Hartsoe v. Baltimore Lutheran High School Association, involved a private, independent, religiously-affiliated school that was sued for damages under Title IX. The school argued that it was not subject to Title IX because the events at issue occurred before it accepted a federal PPP loan and had not otherwise accepted federal funds. The former students argued that the school was subject to Title IX because it received a federal tax exemption as a 501(c)(3) non-profit organization. The judge agreed, finding that an organization’s tax exemption under 501(c)(3) of the Internal Revenue Code is akin to a “Congressional subsidy and the equivalent of a cash grant” from the federal government.