COLEMAN, J., writing for a unanimous Court.

The issue raised in this appeal is whether lay teachers in church-operated elementary schools have an enforceable state constitutional right to unionize and to engage in collective bargaining respecting terms and conditions of employment without violating the Religion Clauses of the First Amendment of the United States Constitution.

South Jersey Catholic School Teachers Organization (plaintiff) asserts that it was elected the majority representative of the lay teachers employed by elementary schools operated by the Catholic Diocese of Camden (defendants). Because defendants refused to recognize plaintiff or to bargain collectively, plaintiff instituted suit, seeking to compel defendants to recognize it as the collective-bargaining representative of the lay teachers and to compel defendants to engage in collective bargaining in respect of the terms and conditions of employment. Plaintiff maintained that the lay teachers are private employees and sought relief based

on Article I, Paragraph 19 of the New Jersey Constitution, which gives private employees the right to organize and bargain collectively.

The trial court granted summary judgment dismissing the complaint, refusing to compel defendants to recognize and bargain with plaintiff as a labor representative of the lay teachers on the ground that to do so would violate the Free Exercise and Establishment Clauses of the First Amendment. According to the trial court, granting the relief sought by plaintiff would interfere with defendants’ free exercise of religion and would involve excessive entanglement between the State and the Catholic Church.

The Appellate Division reversed, finding that this case involves only a Free Exercise Clause claim rather than an Establishment Clause claim or both. Relying on the right to organize and bargain collectively established by the New Jersey Constitution, the Appellate Division concluded that there is a compelling state interest in permitting plaintiff to organize and to engage in collective bargaining that outweighs the claimed burden on defendants’ free exercise rights. That compelling state interest was identified as “the preservation of industrial peace and sound economic order.” The court also found that the distinctions between the levels of religious indoctrination that occur at the elementary level versus the high school level are not controlling given that the Diocese of Camden has bargained collectively over secular conditions of employment in the high schools since 1984.

The Supreme Court granted defendants’ petition for certification.

HELD: Lay elementary-school teachers employed by the Diocese of Camden have a state constitutional right to unionize and to engage in collective bargaining. The scope of that negotiation, however, is limited by the Religion Clauses of the First Amendment to wages, certain benefit plans, and any other secular terms or conditions of employment similar to those that are currently negotiable under an existing agreement with the high school lay teachers employed by the Diocese of Camden.

1. Defendants’ reliance on NLRB v. Catholic Bishop is misplaced. That case was decided strictly on statutory interpretation grounds; the U.S. Supreme Court avoided the constitutional claims that were asserted. In addition, this case is distinguishable from a case involving the National Labor Relations Act (NLRA) because the regulatory scheme of the NLRA requires much more entanglement of government with religion than does Article I, Paragraph 19 of the State Constitution. (pp. 5-7)

2. The standard for conducting an Establishment Clause analysis is based on a three-pronged test: 1) the statute must have a secular legislative purpose; 2) its principal or primary effect must be one that neither advances nor inhibits religion; and 3) the statute must not foster an excessive government entanglement with religion. The primary effect of Article I, Paragraph 19 is to require a private employer to enter into collective bargaining with the elected representative of its employees. The Camden Diocese has been collectively bargaining with lay high school teachers for quite some time. This strongly suggests that bargaining over some similar secular terms and conditions of employment can be achieved without either advancing or inhibiting religion. (pp. 7-15)

3. Government entanglement must be excessive before it violates the Establishment Clause. The agreement between the high schools and their lay teachers over secular terms and conditions of employment demonstrates that the Diocese can negotiate while preserving its authority over religious matters. Any distinction, in terms of impressionability between the high school and elementary school students is not constitutionally significant. By limiting the scope of collective bargaining to secular issues such as wage and benefit plans, neutral criteria are used to insure that religion is neither advanced nor inhibited. In addition, the extent of the State’s involvement would be minimal. Thus, requiring defendants to bargain collectively with plaintiff over the same terms and conditions as are negotiable under the high school agreement does not violate the Establishment Clause. (pp. 15-19)

4. To determine whether the government has coercively interfered with a religious belief, or has impermissibly burdened a religious practice, in violation of the Free Exercise Clause the Sherbert/Yoder compelling interest test was established. That test has been modified by case law in Employment Div. v. Smith and by Congress with passage of the Religious Freedom Restoration Act (RFRA). (pp. 19-22)

5. The RFRA test permits a state to burden the free exercise of religion if the burden imposed is in furtherance of a compelling state interest and represents the least restrictive means of furthering that compelling state interest. The Appellate Division rejected a constitutional challenge to RFRA and decided this case based on that standard. However, a few days ago, the U.S. Supreme Court held RFRA unconstitutional. Therefore, the Smith standard will be applied to determine whether the Free Exercise Clause has been violated. (pp. 22-25)

6. Under Smith, the compelling state interest requirement does not apply unless the regulatory law impacts the Free Exercise Clause and some other constitutional protection. Nor does the Smith standard apply the Sherbert balancing test, which asks whether the law at issue substantially burdens a religious practice and, if so, whether the burden is justified by a compelling governmental interest. Because Article I, Paragraph 19 is neutral and of general application, the fact that it incidentally burdens the free exercise of religion does not violate the Free Exercise Clause. (pp. 25-26)

7. Defendants assert a hybrid claim — requiring them to recognize the union and engage in collective negotiations would violate both the Free Exercise Clause and their First amendment right to free association. Because defendants did not brief this argument, it is waived. Nonetheless, on the merits, the Court concludes that employers do not have a constitutional right not to associate when employees’ right to organize would be jeopardized. (pp. 26-28)

8. Defendants also claim that requiring them to engage in collective bargaining with the lay teachers would violate both the right to free exercise of religion and the right of parents to control the rearing of their children. The parents right of directing the rearing of their children is clearly not implicated here. Nonetheless, in applying the Smith test to these claims, the State of New Jersey has a compelling state interest in allowing private employees to unionize and to bargain collectively over secular terms and conditions of employment. (pp. 28-31)

As MODIFIED, judgment of the Appellate Division is AFFIRMED. The complaint is REINSTATED and the matter is REMANDED to the Chancery Division for further proceedings consistent with this opinion.

CHIEF JUSTICE PORITZ and JUSTICES HANDLER, POLLOCK, O’HERN, GARIBALDI and STEIN join in JUSTICE COLEMAN’S opinion.