It must be admitted that the last thing I thought I would ever post would be a case summary involving a non-compete provision between a member of the clergy and a church or denominational organization. While non-compete provisions might have a place among sales people that make sales based on employer created resources in some circumstances or sale of a business, it is hard to visualize a non-compete against an evangelist, a minister or a pastor. The needs met and the skills brought by these people are supposed to be outside the pale of government intervention, influence, interference or regulation. The First Amendment, the Ecclesiastical Exception Doctrine and the Ministerial Exception Doctrine are intended to protect from government some of the most valuable and fragile treasures in a free society. Of course, so also enshrined in the Constitution is the sanctity of contracts.
In Steiner v American Friends of Lubavitch (Chabad), Slip Op., (DC App., 2018), the Plaintiff was a rabbi employed to operate a campus ministry. He was employed under a written employment contract that contained a non-compete provision. The non-compete provision also contained elements that might be recognizable as a non-solicit clause. The Defendant sought a preliminary injunction. The trial court determined the non-compete provision was greater in breadth than necessary to protect the Defendants’ reasonable interest and modified the non-compete provision and then granted a preliminary injunction. The preliminary injunction precluded the Plaintiff from conducting ministry within one mile of the college campus (geographic limitation), precluded it for two years (temporal limitation), and Plaintiff could not be hired by another campus ministry on the same campus that supported orthodox Jewish belief or practice. The Plaintiff continued to use the former employer’s name and some of its property. The appellate court affirmed. However, the trial court’s injunction of the Plaintiff’s personal, i.e., non-employment ministry to the college students was reversed. The appellate court also questioned whether the injunction could also prohibit the Plaintiff’s wife conduct in any respect and remanded for a hearing on that subject. As an unemployed rabbi, the Plaintiff could continue to host Friday night Shabbos dinners, classes, social events for students, and annual trips to Israel for the students. But, the Plaintiff could not do these things for a paycheck from another employer religious organization on that college campus for two years.
It is clear that this court, and maybe others, will determine that a written employment contract does not require interference in ecclesiastical issues or structures in order to enforce it. However, practitioners that want to adopt employment contracts containing non-compete or non-solicit clauses between churches or para-church organizations and ministers will generally find that east of the Mississippi River it works better than west of the Mississippi River. Also, hierarchical church and para-church organizations will find them easier to use than congregational or connectional church organizations. It is likely that the church name and property will be subject to protection by injunction just like trade dress and trade secrets. In the Steiner case, the parties engaged in an ecclesiastical hearing as well as multiple court hearings, followed by appellate review, and had not reached finality. That might indicate that great expense will accompany an effort to enforce a ministerial non-compete.
A well known teacher of church development and advanced training for pastors once told me that pastors, regardless of denomination, in the 21st century are required to be more than knowledgeable about the Scriptures or counseling but also must be adroit in finance, accounting, management, real estate, and technology. The observation seemed to reflect the seeming truth that the 20th century level of complexity may have allowed reliance on other church leaders that were not clergy, such as church boards or a diaconate, but that is rarely adequate now. Thus, church staff now include many people with a broad range of skill sets. The question becomes whether those types of positions are ecclesiastical, or “sufficiently” so, to qualify for the “immunity” conferred by the Ecclesiastical Abstention Doctrine.
In Kelly v St. Luke Community United Methodist, Slip Op. (Tex. Civ. App. 5th, 2018), the “Director of Operations” was terminated and escorted from the church property by the pastor and a police officer engaged for that purpose. The Director lodged employment claims and a defamation claim. The defamation claim was that the personnel action of the church was communicated to non-member third parties, such as the police officer, and non-members that may have attended meetings of the membership in which the personnel action was announced. The termination was alleged by the church not to have been performance based but rather the result of an internal reorganization of the church. The Director’s $82,000 annual position was allegedly scrapped and a new Director’s position redesigned in the reorganization was offered at $50,000. The Court recited claims from both sides that indicated that the relationship between the new senior pastor and the Director was possibly problematic and that the senior pastor might have considered the Director’s compensation too high for the position. The Court held the reorganization was an internal church management decision cloaked in the Ecclesiastical Abstention Doctrine and that it did not matter whether the Director’s position was “ministerial.” The defamation claim was found not to be based on a scintilla of evidence of publication, i.e., there was no proof of defamation at any meeting the public could attend and the engagement of the police officer did not rise to the level of publication. Thus, the appellate court generally affirmed the trial court decision (for this summary Texas law specifics have been omitted but would matter to a Texas practitioner).
Employment decisions that arise from actual internal reorganizations by the church will likely be viewed as ecclesiastical. Employment positions redesigned by changes in duties and compensation will likewise most likely be viewed as ecclesiastical decisions. Documentation of the decisions by minutes of meetings conducted consistently with the church governing documents that approve or implement either will likely be respected by a Court.
Local churches governed by the congregation, even if they are also a member of a denomination, are generally either associations or corporations. If they are associations, the only governance question is whether there was a vote of the eligible voting members and the result. Neutral Principles generally allow courts to referee those elections. Also, incorporated churches typically have bylaws or statutory corporate governance rules to follow. Neutral Principles generally allow courts to referee those elections. Once the eligible voting membership casts ballots and a decision is reached, the courts typically fell comfortable enforcing those decision.
In Pule v Macomber, Slip Op. (D. Ha., 2018), the church split spilled into the street and at least one side allegedly enlisted the local police department. The Plaintiffs alleged they were locked out and threatened with charges of trespassing. The Plaintiffs allegedly tried to amend the bylaws to extend their two year terms as officers of the church until the litigation was concluded. A court could probably decide the validity of the amendment under Neutral Principles. The Plaintiffs alleged that the private citizen defendants conspired with the non-party local police to violate their civil rights. The claims survived a Motion to Dismiss and the conspiracy claim, even though the police and police agency were not named defendants, was sufficient for federal question jurisdiction in federal court. How the case may ultimately conclude may still be years in the future.
Generally, if a court will decide which side was elected to office, which can be a messy business as has been seen in other cases reported herein, the prevailing faction’s decisions are implicitly validated. That decision will turn on the language of the bylaws, the documentation of elections compliant with the bylaws, and the documentation of congregational voting. One of the decisions generally validated is the hiring or termination of clergy. Clergy employment decisions are typically out of reach as required by the Ministerial Exception Doctrine. But, once the officers have been confirmed in office and identity, the employment issue is usually rendered moot.
The New Year commenced with a step along the path of the development of the law known as the Ecclesiastical Abstention Doctrine. Indeed, this development may be an outlier or even a step too far. Because the development is in an unpublished court opinion, it may be cited only for persuasive effect and is not precedential (aka stare decisis). Nevertheless, the opinion is from a United States Court of Appeals and those are always significant, especially in the federal district courts that report to that circuit.
In Myhre v Seventh Day Adventist, Slip Op. (11th Cir. 2018), a retired clergyman (assumed so because he was “defrocked”) retired in 2009 and began collecting retirement benefits. In 2013, an unspecified “theological disagreement” arose. The opportunity for a retiree to initiate a “theological disagreement” would seem non-existent but to a denominational insider this might seem quite normal. In addition to being “defrocked” the Plaintiff was excommunicated. In 2013 the denomination cut off the Plaintiff’s retirement benefits. The retirement plan document stated eligibility continued only so long as the beneficiary remained a “member of good standing.” The Plaintiff was no longer such a member after excommunication. The 11th Circuit affirmed the trial court’s decision that the trial court lacked jurisdiction to hear the breach of contract claim because the case would require an inquiry into the meaning of “member of good standing” and the underlying evidence on that subject. Such an inquiry, the trial court reasoned, would be blocked by the Ecclesiastical Abstention Doctrine. The 11th Circuit characterized the dispute as “disciplinary procedure” not appropriate for judicial review.
The argument did not seem to be whether the membership clause was a condition to starting benefits. There did not seem to be a dispute about whether the membership clause requirement was by its own language perpetually applicable after initial eligibility had been determined. It would seem that a court could under the Neutral Principles Doctrine determine if the membership clause was an ongoing condition precedent to continuing to receive benefits. If it was (and it may have been but the opinion was a bit terse), application of the Ecclesiastical Abstention Doctrine would make sense.
Typically, denominational authorities include in their denominational control documents, or even in the titles of the local churches, reversion provisions that prevent local churches from going rogue or otherwise fleeing with the real property. These provisions are generally intended to protect the generations of members that contributed to the equity owned by the local church by preventing the current generation of members, or some vocal part, from “strip mining” the local church real estate asset. Sometimes these provisions provide leverage to the denomination to enforce unpopular ecclesiastical positions. Rightly or wrongly, the reversion provisions are enforced by secular courts and courts will rarely if ever look to the underlying dispute to deny enforcement.
In Saint James Mission Church v African Methodist Episcopal Church, Slip Op. (La. App. 2017), some of the local church members tried to use an eviction docket to evict the denomination after they were locked out. The split with the denomination raged through the eviction proceeding, a federal trial court proceeding, a federal appellate court proceeding, and finally the state appellate court proceeding. It took at least six years. The legal expense was likely significant. But, in the end, the federal courts ended up on the side line, the state trial court dismissed the eviction proceeding, and the state appellate court affirmed. The state appellate court held that the eviction docket had a dedicated purpose and the enabling statutes did not allow the proceeding to be expanded into an “ordinary proceeding.” Thus, dismissal was appropriate.
The attempt to expand the eviction docket was clever but ultimately, if this is the final round in this war, an expensive failure. It was a stretch to characterize the denomination as a “lessee.” Limited purpose court dockets are rigid because otherwise they could not serve the limited purpose that birthed them so the rebelling local church members probably knew this was a long shot. Knowing that, they funded the effort. Litigating about litigating is always expensive and never reaches the merits of the dispute.
If the Ecclesiastical Abstention Doctrine and the Ministerial Exception mean anything, at the least they preclude judicial inquiry into denominational management or discipline of its own clergy (regardless of by what title they may be known). In Melendez v Evangelos Kourounis, Slip Op. (NJ App. Div. 2017) a trial court’s summary judgment was affirmed per curiam. The clergyman established a mission chapel. He claimed it was with the bishop’s approval. The bishop denied that it was an approved mission. The bishop also issued an encyclical in which the clergyman was barred and local clergy were instructed to advise parishioners not to go to the mission chapel. The clergyman sued for defamation but without doubt that required inquiry into the scope of denominational authority which is typically ecclesiastically defined. On that basis the trial court dismissed the case and on that basis the appellative division affirmed.
The denomination appeared to be hierarchical. However, that might not matter. If the denomination has given itself the authority to manage and discipline its clergy it is not likely that a court will inquire further, even if the denomination is connectional.
The Employment Retirement Income Security Act of 1980 was a logical attempt to structure and organize employee retirement plans to take pressure off social security, improve employee confidence sufficiently to encourage savings, and to regulate the tax sheltered nature of retirement savings. Like all federal mandates that are also entangled with the federal income tax it is complicated and regulations it spawned were more so.
From inception ERISA exempted churches. Church employers could create less regulated employment retirement plans. The question then became whether para-church organizations could do so. In Medina v Catholic Health Initiatives, Slip Op. (10th Cir. 2017), the United States Court of Appeals for the Tenth Circuit affirmed a Colorado trial court. The question was whether Catholic Health Initiatives (“CHI”), a para-church organization of the Roman Catholic Church was a “principal-purpose organization” that would be exempt from ERISA. CHI operated 92 hospitals, had 90,000 employees in its retirement plan, and the plan had $3 billion in assets. While the historic connection between churches and hospitals is becoming lost in the mists of time, it remains, and many hospitals in existence would not have existed in the author’s life time had no church stepped up to found them. But, in the post-modern era, the church hospitals, those that have not been bought or replaced by secular ownership, have grown to proportions that obscure the roots. Because of the size of these institutions, they must be managed by modern methods and that tends to make them look less like para-church organizations. Nevertheless, the 10th Circuit upheld the ruling that CHI was a para-church organization, i.e., a principal-purpose organization, and therefore, exempt from ERISA.
The opinion omits a discussion of why the Plaintiff was aggrieved by an employee retirement plan that was not subject to ERISA. The Plaintiff sought class action status so the compliant had to be the same for many participants to meet the numericity requirement.