Tag: church employment

EMPLOYMENT AGREEMENT AUTHORITY

Does the pastor, minister, evangelist, priest, rabbi or imam have the authority to enter into an employment contract that will bind future church leaders? However, in order to answer such a question judicially may require that a secular court develop a full understanding of the ecclesiastical structure of a denomination or church.

In Napolitano v St. Joseph Catholic Church, Slip Op. (FL. App. 2020), the plaintiff was for twelve years employed as the office manager of the church. When the pastor learned that he was to be replaced by the hierarchy of the denomination, a written employment contract was for the first time entered into between the church and Plaintiff. The contract had a term of four years and required termination only for cause. It also automatically renewed for another term if there was no written notice of intent to terminate six months before the end of the term. The new pastor terminated the Plaintiff without notice. The Plaintiff allege breach of contract and that the former pastor had apparent authority to enter into the employment agreement and bind the denomination. The case was dismissed by the trial court and the appellate court affirmed dismissal. The appellate court held that the actual authority of the former pastor to enter into the employment agreement and bind the denomination was a question of ecclesiastical doctrine into which the court could not intrude. The court held that the question of apparent authority was likewise an ecclesiastical inquiry.

Denominations should consider including in their governance documents clauses that preclude or require the prior written approval of written employment agreements. Several different approaches could be taken. These might include requiring written approval only if the written employment agreement has a tenure greater than one or two years, or if it permits termination only for cause, or require an automatic termination clause in the event a new minister is appointed or licensed by the denomination for the church. Local churches without denominational affiliation or oversight should in their governance documents spell out whether a single church leader can enter into an employment agreement without approval of a governing board.

CHURCH SUBJECT MATTER JURISDICTION

Courts only have authority to the extent of their jurisdiction. If something, someone, or someplace is outside of their jurisdiction, then the court is powerless to proceed for or against that entity. Some states hold that their courts have no subject matter jurisdiction over church governance issues and tend toward almost automatic dismissal of such claims. Generally, the claims are employment claims or church leadership issues. Some states hold that their courts have subject matter jurisdiction but the church may raise the Ecclesiastical Abstention Doctrine as an affirmative defense. As an affirmative defense, the church must prove that the issue raised by the plaintiff’s claims require delving into ecclesiastical matters rather than neutral principles of law, e.g., contract claims.

In Gilmore v Trinity Missionary Baptist Church, Slip Op. (unpublished) (Mich. App. 2018), the appellate court reversed summary judgment for the church. The trial court dismissed the case on the ground the issue presented was a church governance issue. The plaintiff was employed for over thirty years as the church business manager. Under an oral amendment to her employment contract, she alleged she was given five weeks of paid vacation annually. A new pastor, however, was unaware of any such oral amendment. The pastor learned of the Plaintiff’s vacation pay because in his third year he noticed she added five weeks of salary to her payroll when she set up the annual payroll. The plaintiff was given the choice of abiding by the written employment contract, i.e., not receiving the extra five weeks of salary, or retiring. The plaintiff agreed to neither and was terminated. The appellate court reversed solely because the trial court dismissed the case without conducting a factual inquiry into whether the employment claims raised by the Plaintiff implicated the Ecclesiastical Abstention Doctrine. On remand, such an inquiry would have to be conducted.

Churches may still be able to limit the scope of litigation by proving at the outset that the claims presented do intrude on ecclesiastical church governance. For example, a business manager may be more than a mere bookkeeper and may be directly involved in ministry management. As reported herein, some courts will limit discovery to that issue because there is no point in proceeding with the case if it involves ecclesiastical issues. The written employment contract was not the subject of the court opinion and a well-drawn contract might include a description of ecclesiastical job functions to which the employee has agreed by signing the contract.

ECCLESIASTICAL DISCOVERY

In the present legal environment, church defense lawyers should almost always start with a well-crafted Motion to Dismiss. Indeed, exceptions to that general rule are difficult to conjure. The most prevalent might simply be that churches, as primarily volunteer organizations with little internal infrastructure, might simply be unable to engage counsel and gather the information needed for a Motion to Dismiss, and its higher standards, in the short time available after service of process on the church. In most federal courts and many state trial courts, discovery cannot commence until the case is at issue. Discovery is often the true cost center of litigation because it requires an immense investment of the time of a lawyer. A Motion to Dismiss often delays or limits discovery.

In Presbyterian Church USA v Hon. Brian Edwards, Slip Op. (Ky., 2018), the church was sued in the trial court by a terminated ministerial staff member. The termination allegedly arose from an unauthorized transfer of church funds to another entity incorporated without authorization from the church leadership. There was no allegation of defalcation. The church did not immediately respond to the lawsuit with a Motion to Dismiss on Ministerial Exception grounds. The former employee issued written discovery requests to the church. The trial court ordered the church to respond to the written discovery. The church appealed the decision through an extraordinary writ. The Court of Appeals of Kentucky and then Kentucky Supreme Court reversed the trial court and limited discovery only to the applicability of the Ministerial Exception.

The information needed for a Motion to Dismiss in most employment actions in which it is contemplated that the jurisdiction of the court will be challenged on First Amendment grounds, and especially the Ministerial Exception, will always include the governing documents of the church and church corporation. Job descriptions, employment contracts, if any, and employee manuals, if any, will follow in importance. Church files are notoriously hard to muster, especially if the insider now suing had access. Lastly, church bulletins, newsletters, websites, and internal communications may be needed to persuade that the former employee was, indeed, ministerial in function. Computers never forget and even deleted files can often be recovered.

CHURCH CONTRACTS ENFORCEABILITY

The sanctity of contracts is so revered in the United States that contracts are preserved and protected in the Constitution of the United States. Article 1, §10, US Constitution. Indeed, the section prohibits any state from making any law that impairs the obligation of contracts. Thus, it should not be a surprise that a claim based on a written employment contract might survive assertion of the Ministerial Exception and the Ecclesiastical Abstention Doctrine arising from the First Amendment. The idea is not that one clause overshadows the other, but rather that they are co-equal in force and must be reconciled so that both survive.

In Sumner v Simpson University, Slip Op. (Cal. App. 3rd, 2018), the Dean of the Tozer Theological Seminary, a part of Simpson University, asserted a breach of contract claim and state tort claims, such as defamation arising from her second termination. She was reinstated after her first termination and compensated for lost wages so the first termination was not argued. However, violation of what might be characterized as a corrective action plan, an insubordination charge, was alleged to be the basis of the second termination that resulted in the lawsuit. The trial court granted summary judgment because Simpson University and the seminary were religious organizations and the Dean, who also taught in the seminary, was deemed to be subject to the Ministerial Exception. The California appellate court sustained summary judgment as to the tort claims under the Ministerial Exception. However it reversed the trial court as to the breach of contract claim. Succinctly, the conclusion of the appellate court was that a contract claim could be decided under Neutral Principles of Law. The appellate court held that a charge of insubordination might or might not be based on religious doctrine. The facts recited by the Court would lead to the conclusion the alleged insubordination may have been regarding secular administrative matters rather than religious matters. However, because the trial court might still be confronted with a religious question as the proceeding developed on remand the appellate court did not foreclose a future dismissal of the claim.

While church hierarchy, ministers, pastors and priests may not be able to assert claims arising from an alleged breach of a written contract in most cases, employees of parachurch organizations with dual roles, secular and religious, may still be able to do so. Much will be determined by whether the termination arises from religious matters or secular matters. Characterization of a termination as religious will be reviewed for authenticity. Therefore, written employment contracts should be written and negotiated carefully. Adverse employment actions should always be carefully documented and especially consistently with any existing written contract governing the relationship. A contract is at its core a promise, and churches should expect to have to keep those they enshrine in written contracts.