Churches that do not maintain valid membership rolls and maintain current bylaws risk disputes over control when factions in a church become intractable. Courts faced with such disputes will decide them using Neutral Principles of Law, such as corporate statutes, and ignore ecclesiastical concerns that are not incorporated into a governing document.
In Cohen v Berliner, 2021 NY Slip Op 30682 (U) (Kings County, NY, 2021), the membership roll was lost and no bylaws had ever been adopted. Thus, there was no procedure for determining who the voting members were. The faction apparently in the majority finally petitioned for a special meeting to elect governing board members. Under state law, it only took ten members to call a special meeting. The Court ordered an evidentiary hearing to see if among the 200 members allegedly signing a petition for special meeting there were ten actual members. If so, the Court would order, consistent with state statutes governing corporations, a special meeting to elect a governing board.
The basic principle set forth in the opening paragraph was confirmed by the reported case. Bylaws adopted by a church corporation should set forth the criteria for membership and the procedure for verification of the membership roll. Verification of the membership roll should be done every year and become a governing board tradition on or about the same date every year. The bylaws should also set forth the qualifications to hold every office and position, at least in general terms. Employment positions below the level of senior pastor or minister should be delegated to the governing board so that popularity contests do not become the norm for employment decisions. Whether to require submission of the employment or termination of the senior pastor or minister to a governing board is often a matter of church tradition and may for that reason, require a vote of the membership rather than just the board. In any event, the bylaws should specify the authority and process for hiring and terminating the senior pastor or minister consistent with the church tradition. Official copies of both the membership roll and the bylaws should be maintained not only at the church property but, in this day and age, in the cloud or otherwise off site. Amendments to membership rolls or bylaws should be done carefully and official copies maintained both on and off site.
Most churches incorporate and then appoint a board of directors (or a similar board using names deemed biblical, e.g., “deacons,” “elders,”) responsible for conducting church business. Some church governing documents, which may or may not be called a “constitution” or “bylaws,” do not expressly assign to the congregation’s official membership any other power than an annual vote to elect directors to vacancies created by term expiration. The authority to hire or terminate a pastor is often not expressly stated as that of the board or the congregation.
In Vaughn v Faith Bible Church, Slip Op. (MY App, 2020), the church board terminated the pastor. The pastor sued claiming that church board had to defer hiring and termination decisions to congregational meetings. The trial court entered judgment against the pastor and the appellate court affirmed. The governing documents were silent as to who had authority in the church to hire or terminate a pastor. The state statute governing corporations did not provide an exhaustive list of powers delegated to the corporate boards, and did not expressly mention hiring or firing as a power. The courts held that the statutory list of powers placed in the corporate board was not exhaustive so the corporate board would have the power to hire or fire absent a specific delegation in the governing documents.
Because congregational meetings and votes are unwieldy, only small churches tend to rely on congregational meetings or votes to determine most issues, including employment issues. In small churches, every family committed to the church is usually represented on the board in any event. In larger churches, the church board is usually the body responsible for day-to-day operations, including hiring and firing. Church governing documents should spell out which body has the authority to hire or fire a pastor. Other employees should be under the employment authority of the governing board, or the board and pastor, or controversy will plague the lowest staff position turnover. However, if the documents are silent, a church board created by the governing documents will likely have the authority by default.
Most denominations, their subdivisions and local churches, generally prove their existence and right to own property by incorporating. However, while this may be the best practice, it is not the only way. Indeed, prior to the era of incorporation, most churches were associations of members and most denominations were associations of churches. While most now have governing documents and corporate documents filed with a regulatory authority, for purposes of real estate ownership if nothing else, that was not always the case even during the latter stages of the Twentieth Century. One of the reasons the organizational structure of the “association” fell into disuse was because of the need to obtain clear title to own real estate and bank accounts.
In Embassy University v Institute in Basic Life Principles, Inc., 2020 IL App (2d) 191140-U (2020), the trial court dismissed the case because the defendant alleged the Plaintiffs could not prove they were an association, and, indeed, could not prove up their own existence in order to be a party to a lawsuit. The Plaintiffs were claiming they were part of an association of churches or parachurch organizations and that the defendant owed them a fiduciary duty in the disposition of denominational assets. Further, to prove the point, the defendants noted that the Plaintiff university’s name was a “DBA” and not the name of the underlying entity. The appellate court reversed so that through discovery, and if necessary trial, the Plaintiffs could prove they were an association with the defendant imposing on the defendant a fiduciary duty as to denominational assets.
The lesson of history has been that associations have a harder time proving their existence, their governance, who can speak for them, and who can own their property. The Plaintiffs in the reported case might have an easier time than some because their founder, William Gothard, Ph.D, is still living, well known, even though he had to depart from leadership for a time, and can testify as to the formation of most of the entities. The Plaintiffs should have incorporated. It is still the cheapest and tried and true method of becoming an entity that can own property and accounts.
While in recent months, especially in Oklahoma, there has been considerable angst regarding the scope of the sovereignty of tribal governments, virtually the same type of issue arises with regard to denominational authority. Indeed, some denominations resolve certain disputes by convening a court. It may be called an “Ecclesiastical Council” rather than called a court, or by some other name, but nonetheless it is a court.
In Church of God in Christ, Inc. v L.M. Haley Ministries, Inc., Slip Op. (Tenn. App. 2020), the appellate court affirmed summary judgment in favor of the denomination. The local church’s long time pastor died. He was succeeded for a couple of years by a “Jurisdictional Bishop” that appointed himself as pastor. However, the successor died. For a time, the position of “Jurisdictional Bishop” remained vacant and so, too, as a result did the pastorate of the local church. Tiring of the circumstances, the local church in a congregational vote attempted to terminate its “jurisdiction” membership and transfer to another denominational jurisdiction. However, the original denominational jurisdiction appointed a “Jurisdictional Bishop” and he in turned appointed himself pastor of the local church. The faction of the local church that led the attempt to change denominational jurisdictional membership refused to relinquish control of the local church property or assets to the “Jurisdictional Bishop” appointed as pastor. To resolve the dispute with the local church, the denomination convened an “Ecclesiastical Council” to decide the matter. The council affirmed the appointment of the “Jurisdictional Bishop” as local church pastor and excommunicated the dissenting faction. The local church led by the dissenters resisted and the lawsuit was filed to enforce the decision of the denomination. The courts refused to review the “Ecclesiastical Council’s” decision, treated it as binding and worthy of deference, and granted judgment to the denomination.
The governing documents of the denomination and the local church made ecclesiastical inquiries unnecessary. Once the denomination established its authority to select the pastor, its authority to hold the local church property in trust, and its authority to excommunicate the dissenters, the denominational decision was treated deferentially. To avoid such an outcome, the local church should have obtained a documented “acceptance” from the denominational jurisdiction to which it tried to transfer by congregational vote. Further, the acquiescence of the losing denominational jurisdiction should have been negotiated. Both efforts would have been cheaper than litigation and more likely to be successful.