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In other words, did the Legislature’s criteria for deciding what activities or institutions deserve a religious exemption constitute a state intrusion into religious matters that was prohibited by the First Amendment?

The California court ruled no, by 6 to 1. Yet it is noteworthy that the criteria that disqualified Catholic Charities in California from a religious exemption are precisely the ones regularly hailed by those who felt that the existing relationship between government and religious organizations was satisfactory and did not need the White House’s religion-based initiative.

Catholic Charities did not limit to Catholics either its hiring or its social services. It did not proselytize. And it was organized as a type of nonprofit corporation distinct from the church. This was the kind of well-tested model that critics of the religion-based initiative urged on churches that wanted to qualify for government aid to expand their activities on behalf of the needy. Is the cost of that model, as the California statute indicates, a loss of religious organizations’ ability to be guided by their own beliefs, especially in regard to dealing with employees?