                              In the
 United States Court of Appeals
                For the Seventh Circuit
                           ____________

No. 07-1333
STEVE SCHLEICHER and LORRIE SCHLEICHER,
                                               Plaintiffs-Appellants,
                                  v.

THE SALVATION ARMY,
                                                 Defendant-Appellee.
                           ____________
              Appeal from the United States District Court
      for the Southern District of Indiana, Indianapolis Division.
                No. 06 C 545—Richard L. Young, Judge.
                           ____________
   ARGUED FEBRUARY 13, 2008—DECIDED FEBRUARY 28, 2008
                           ____________


  Before CUDAHY, POSNER, and EVANS, Circuit Judges.
   POSNER, Circuit Judge. The Schleichers brought suit
against their former employer, the Salvation Army, charg-
ing violations of the minimum-wage and overtime pro-
visions of the Fair Labor Standards Act, 29 U.S.C. §§ 201
et seq. Invoking the “ministerial exception” (better termed
the “ministers exception,” to avoid the misleading con-
notation of “ministerial”—better still, as we’ll see, to call
it the “internal affairs” doctrine) to federal employment
statutes, see, e.g., Alicea-Hernandez v. Catholic Bishop of
Chicago, 320 F.3d 698 (2003), the district judge dismissed
2                                               No. 07-1333

the suit—though only after an evidentiary hearing—for
want of federal jurisdiction. Fed. R. Civ. P. 12(b)(1).
  The Schleichers were ordained (in the sense of authorized
by a church to act in a clerical capacity) ministers of The
Salvation Army, with the rank of captain, assigned to be
the administrators of the Salvation Army’s Adult Reha-
bilitation Center in Indianapolis. Ministers of the Salvation
Army receive no wages, though they receive “an
allowance . . . sufficient for basic needs.” The allowance
that each of the Schleichers received was only about $150
a week. That was below the federal minimum wage, given
the number of hours they worked, which included over-
time.
  They were expelled from the Salvation Army for bringing
this suit, and it is telling that they do not complain that
their expulsion violated any law, although the Fair Labor
Standards Act contains an anti-retaliation provision.
29 U.S.C. § 215(a)(3). (The Act also contains an exemption
for persons “employed in a bona fide . . . administrative
capacity,” § 213(a)(1), but for unexplained reasons the
Salvation Army has not invoked the provision.) If they
charged retaliation, and the Salvation Army replied that
they had been fired because their filing a suit seeking
to enforce wage and overtime claims was inconsistent
with their religious obligations as ministers and was thus
an independent and adequate ground for firing them,
the court would have to explore the religious doctrines
of the Salvation Army that define the role of its ministers.
Blocking such inquiries—such entanglements of the
secular courts in religious affairs—is one of the grounds
on which the ministers exception was devised as a rule
of interpretation of employment laws that do not make
explicit reference to religious organizations. Thus in
No. 07-1333                                                3

Tomic v. Catholic Diocese of Peoria, 442 F.3d 1036 (7th Cir.
2006), we held that the music director of a Catholic
church could not maintain an age-discrimination suit
against the church because it was apparent that the
church’s defense would be that it had fired him not
because of his age but because of disagreement over
the religious propriety of his musical choices, and to
evaluate such a defense—to determine, that is, whether
it was sincere or pretextual—would require a court to
weigh in on issues of Catholic doctrine and practice. See
also Shaliehsabou v. Hebrew Home of Greater Washington,
Inc., 363 F.3d 299 (4th Cir. 2004).
  In reading into statutes of general applicability an
exception favorable to religious organizations, the courts
may seem to be flouting the doctrine of Employment
Division v. Smith, 494 U.S. 872 (1990)—that the free-exercise
clause of the First Amendment does not require the
government to lighten the burden that a nondiscrimi-
natory statute places on religious organizations, and
thus that a law against mind-altering drugs can be ap-
plied to a religion that, however sincerely, deems the
ingestion of such a drug a sacrament comparable to the
Eucharist. But the ministers exception is a rule of inter-
pretation, not a constitutional rule; and though it is
derived from policies that animate the First Amendment,
the relevant policies come from the establishment clause
rather than from the free-exercise clause. The purpose
of the doctrine is not to benefit marginal religions that,
lacking the political muscle to obtain legislative protec-
tions of their rituals and observances, turn to the courts
instead; it is to avoid judicial involvement in religious
matters, such as claims of discrimination that if vin-
dicated would limit a church’s ability to determine who
4                                                No. 07-1333

shall be its ministers. The assumption behind the rule—for
it is an interpretive rule—is that Congress does not want
courts to interfere in the internal management of
churches, as they sometimes do in the management of
prisons or school systems. In a religious nation that
wants to maintain some degree of separation between
church and state, legislators do not want the courts to tell
a church whom to ordain (or retain as an ordained minis-
ter), how to allocate authority over the affairs of the
church, or which rituals and observances are authentic.
The courts are not to resolve schisms or review excom-
munications. Serbian Eastern Orthodox Dioceses v.
Milivojevich, 426 U.S. 696, 708-15 (1976). That is why the
ministers exception is better termed the “internal affairs”
doctrine, Tomic v. Catholic Diocese of Peoria, supra, 442
F.3d 1039; “ministers exception” is too narrow— remember
that Tomic was not a minister. The point is simply that it
is no more appropriate for courts to govern churches
than for legislatures to do so.
   Against the application of the doctrine in this case the
plaintiffs point out that this is not a discrimination case,
hence not a case in which the application of federal law
would limit the right of a religious organization to de-
cide who will perform religious functions—who will be
the ministers. Compare Petruska v. Gannon University,
462 F.3d 294, 302-08 (3d Cir. 2006). They point out that
the Supreme Court held in Tony & Susan Alamo Founda-
tion v. Secretary of Labor, 471 U.S. 290 (1985), that “associ-
ates” of a religious organization were employees entitled
to the protections of the Fair Labor Standards Act. The
organization financed itself by operating commercial
businesses, such as gas stations and grocery stores,
staffed by drug addicts, alcoholics, and derelicts, who
No. 07-1333                                                  5

had been converted and rehabilitated by the organization.
Forcing it to pay minimum wages to the associates added
to its costs, as would any application of a law of general
application to a resisting organization, but did not re-
quire a court to adjudicate religious issues or to order a
church to retain a minister whom it considered unfit on
religious grounds.
   It is different when as in this case the law is sought to be
applied to a minister rather than to a lay employee
who, unlike the music director in the Tomic case, has no
religious function. We can begin to see this with the help
of a regulation of the Department of Labor interpreting
the Fair Labor Standards Act. Paraphrasing the statute,
which defines “enterprise” as a set of related activities
“performed . . . for a common business purpose,” 29 U.S.C.
§ 203(r)(1) (the significance of the definition is that em-
ployees of “an enterprise engaged in commerce” are
covered by the Act, e.g., §§ 206(a), 207(a)(1)), the regula-
tion provides that when charitable, religious, or educa-
tional organizations “engage in ordinary commercial ac-
tivities,” those activities have the same status under
the Act “as when they are performed by the ordinary
business enterprise.” 29 C.F.R. § 779.214. Much like the
religious organization in the Alamo case, the Adult Re-
habilitation Center that the plaintiffs administered oper-
ates thrift shops (five in number, with a total work force
varying from 20 to 40) that sell donated goods to the
general public. The income from the thrift shops helps to
finance the Center, and the Salvation Army as a whole.
Most of the employees of the thrift shops are, again much
like the “associates” in the Alamo case, drunkards, drug
addicts, and other unfortunates whom the Salvation Army
is attempting to redeem. And the thrift shops’ employees
6                                             No. 07-1333

are covered by the Fair Labor Standards Act, just as the
Alamo Foundation’s associates were held to be.
   The plaintiffs were not employed by the thrift shops,
however. Nor is the Adult Rehabilitation Center an ordi-
nary business enterprise or merely an umbrella for
the thrift shops. As the retired director of the Salvation
Army’s midwestern Adult Rehabilitation Centers testi-
fied without contradiction, a Salvation Army Adult Reha-
bilitation Center is a church, and, like a church, it is
administered by church officials—the Salvation Army
ministers who are, as the Schleichers were, appointed
by the Salvation Army to administer it. The plaintiffs
concede that an ordained minister who administers a
church is not the employee of a religious organization
“engage[d] in ordinary commercial activities,” and so
the question comes down to whether the fact that a
church has a commercial dimension (the thrift shops,
at least viewed from their customers’ perspective) brings
its ministers under the Fair Labor Standards Act.
  The plaintiffs say it does, even in the following vari-
ant that we put to their able lawyer at oral argument.
Suppose a monastery, whose monks take a vow of pov-
erty and are paid no wages, sells the wine that the
monks produce, in order to finance the operation of
the monastery. See, e.g., “Wine-Tasting and Retreats
at California Monastery,” May 23, 2006, www.ajc.com/
travel/content/travel/otherdestinations/us_stories/
052406monastery.html (visited Feb. 14, 2008). The sale
of wine is a commercial activity. The monastery com-
petes with commercial enterprises. Are the monks therefore
employees of a religious organization “engage[d] in
ordinary commercial activities”? The Schleichers’ lawyer
unflinchingly answered yes. We answer no. The vow of
No. 07-1333                                               7

poverty is a hallowed religious observance; an intent to
destroy it cannot reasonably be ascribed to the draftsmen
of the Fair Labor Standards Act. No one could think the
curious precapitalist economy of a monastery an ordinary
commercial activity actuated by a business purpose.
  A secularist might say that vows of poverty are passé,
that the sale of wine or other products by monasteries is a
vestige of the Middle Ages, and that if the monks are
serious about poverty they can donate their minimum
wages to the church. But to entertain such arguments
would plunge a court deep into religious controversy
and church management. Suppose the monks were paid
the minimum wage but were asked to donate it back to
the monastery. Suppose most of them did this but some
did not, and the church expelled the recusants; would a
court intervene; and if it did not, would not that as a
practical matter nullify the application of the Fair Labor
Standards Act to the monastery? That is what the Salva-
tion Army did to the Schleichers, who have accepted
their expulsion mutely. If that is the policy of the Salva-
tion Army, as it appears to be, then however we rule
no Salvation Army minister will ever receive the mini-
mum wage. We are disinclined to take the first step on a
path that leads so swiftly to so dead an end.
   It is different with a thrift shop entirely managed and
manned by persons who are not monks, priests, or other
religious functionaries. The function of the Salvation
Army ministers who administer the Adult Rehabilita-
tion Centers is not to wait on customers of the thrift shops
or manage one or more of the stores on a day to day basis;
it is to manage a religious complex that includes thrift
shops. The rehabilitation centers are self-contained reli-
gious communities for their residents, whom the Salva-
8                                                No. 07-1333

tion Army is trying to save. The centers include a chapel
as well as living and dining areas, and the residents pur-
sue courses of religious studies and devotions along
with undergoing work therapy as employees of the thrift
shops. The Schleichers admitted at the evidentiary hear-
ing that their duties as administrators of the Indiana
center had included “preaching,” “leading worship
singing,” “overseeing or leading daily devotions,” “over-
seeing or teaching Bible studies” to the residents, “oversee-
ing or conducting Christian living classes” for them, and
teaching “soldiers classes,” which are classes for pro-
spective Salvation Army ministers. In addition, the minis-
ters circulate throughout the thrift shops “getting to
know [the employees—the flock], getting to fellowship
with them, but most importantly to minister to them,
to talk to them about the condition of their soul.”
  Suppose a Catholic cathedral contains a gift shop that
sells crucifixes, rosaries, religious postcards, and religious
art. The employees of the gift shop are subject to the
Fair Labor Standards Act; the bishop who administers
the cathedral is not. The commercial tail must not be
allowed to wag the ecclesiastical body. The plaintiffs
concede that ministers engaged in ecclesiastical admini-
stration are not subject to the Fair Labor Standards Act
no matter how closely their administrative duties resemble
those of business employees. The Salvation Army’s
Adult Rehabilitation Centers are functional equivalents
of cathedrals or monasteries, and the ministers who
administer them are therefore engaged in ecclesiastical
administration. The thrift shops, moreover, unlike (we
take it) the gift shop in our hypothetical cathedral, have
a religious function; salvation through work is a religious
tenet of the Salvation Army. The sale of the goods in the
No. 07-1333                                                9

thrift shop is a commercial activity, on which the cus-
tomers pay sales tax. But the selling has a spiritual dimen-
sion, and so, likewise, has the supervision of the thrift
shops by ministers.
  The best way to decide a case such as this, and one
consistent with the evidentiary hearing that the district
judge conducted, is to adopt a presumption that clerical
personnel are not covered by the Fair Labor Standards
Act. The presumption (which is consistent even with
the fierce dissent from the denial of rehearing en banc in
the Shaliehsabou case, see 369 F.3d 797, 803 (4th Cir. 2004))
can be rebutted by proof that the church is a fake, the
“minister” a title arbitrarily applied to employees of the
church even when they are solely engaged in com-
mercial activities, or, less flagrantly, the minister’s func-
tion entirely rather than incidentally commercial. Suppose
a church received by inheritance a steel plant, and it
happened to have among its ministers a former steel
executive whom it assigned to manage the plant full time.
The example is artificial given the exemption of administra-
tive employees from the FLSA mysteriously not invoked
in this case. But setting the exemption to one side, it
would be a case of a bona fide minister who had, how-
ever, stepped entirely out of his religious role to manage
a commercial enterprise full time.
  None of these methods of rebuttal has been attempted
by the plaintiffs in this case. The Salvation Army, which
has existed in the United States since 1880, is acknowl-
edged to be a completely legitimate church; our descrip-
tion of the Adult Rehabilitation Centers is not contested;
and the Schleichers were properly ordained ministers.
  The district judge made one mistake, though a harm-
less one. That was to dismiss the suit under Rule 12(b)(1)
10                                               No. 07-1333

of the civil rules. Petruska v. Gannon University, supra,
462 F.3d at 302-03. That rule is intended for cases that are
not within the jurisdiction of the district court. Now it is
true and important that federal courts, as we noted in the
Tomic case, do not have jurisdiction to decide ecclesiastical
controversies. 442 F.3d at 1037-38. A federal court could not
entertain a suit to restore the Latin mass or to de-
clare Christian Science a heresy. But it does have juris-
diction to decide cases brought to enforce the Fair Labor
Standards Act. The fact that enforcement of the Act in
a particular case would entangle the court in an ecclesi-
astical controversy would be a compelling reason to
dismiss that case, but not a reason founded on a lack of
jurisdiction over a plaintiff’s claim that, as in this case,
is based on the Fair Labor Standards Act rather than on
anything to do with religion. Jurisdiction is determined
by what the plaintiff claims rather than by what may
come into the litigation by way of defense. Franchise Tax
Board v. Construction Laborers Vacation Trust, 463 U.S. 1,
16 (1983); Primax Recoveries, Inc. v. Sevilla, 324 F.3d 544,
549 (7th Cir. 2003).
   But it is entirely proper in a case like this for a defend-
ant who is invoking the presumption that ministers’
compensation is not subject to the Fair Labor Standards
Act to move to dismiss an FLSA case under Rule 12(c)
(judgment on the pleadings). If the plaintiff presents
evidence to rebut the presumption, then, as the rule
states, the defendant’s motion for judgment on the plead-
ings is treated as a motion for summary judgment under
Rule 56. It does not matter in this case, however, what
rule the judge acted under, since he granted an eviden-
tiary hearing at which the plaintiffs could have tried to
present evidence that would have rebutted the presump-
No. 07-1333                                               11

tion, but did not. We therefore modify the judgment to
base it on the lack of merits of the plaintiffs’ claim rather
than on any want of federal jurisdiction, and as so modified
the judgment is
                                                 AFFIRMED.




                   USCA-02-C-0072—2-28-08
