In June 2017 we reported the decision of the trial court to grant summary judgment in Grussgott v Milwaukee Jewish Day School, Inc., Order, (ED Wisc. 2017). The United States Court of Appeals for the 7th Circuit has affirmed. In Grussgott v Milwaukee Jewish Day School, Inc., Slip Op. (7th Cir. 2018), the appellate court held as have others that there is no precise “formula” or set of elements that determine whether an employee is sufficiently “ministerial” to trigger the Ministerial Exception. The Plaintiff was an elementary school teacher whose job was not to teach reading, writing and arithmetic, but rather Hebrew. The Plaintiff taught Hebrew from an integrated curriculum which included religious instruction as a part of the language instruction (or language as part of the religious instruction). Also, the Plaintiff admitted teaching about Jewish Holidays, weekly Torah Readings, and participated even if she did not teach other religious rites. It was not dispositive that Plaintiff claimed she only taught historical and cultural facts and not religion. The school documented that it was intended that Plaintiff’s role contribute to the “school’s Jewish mission.”
Rather than adopt a formulaic test or set of elements, the 7th Circuit adopted what it called the “totality of circumstances” test. Of course, the totality would include many elements. Thus, in this case, Plaintiff’s role as a teacher of the faith to the next generation “outweighed” other considerations.
The lesson for church schools and para-church organizations generally is to link the job with the religious mission. This should be done in employee handbooks, policy manuals, and governing documents. It would not hurt if the new employee signed an acknowledgment of the religious mission of the new employer and also acknowledged the employee’s important role in that mission. It might not be especially specific but it would make ignorance of the mission and the expectation of participation in the mission an untenable claim.
The search for theories of recovery that evade the scope of the Ministerial Exception and the Ecclesiastical Abstention Doctrine is ongoing. The theories that seem to offer some hope to aggrieved plaintiffs and to survive motions to dismiss, occasionally, are defamation and interference with contractual relations. However, projecting forward into the future, defamation will almost never yield an economically viable plaintiff’s claim (enough to carry litigation expenses and counsel fees while producing a recovery sufficient to make the risk worthwhile). Also, again projecting, few pastors and only a few denominational leaders will have outside contracts sufficient or provable upon which to base a claim. Nevertheless, as will be noted below, such theories may only survive premised on a faulty appreciation of what constitutes a “church.”
In McRaney v North American Mission Board of the Southern Baptist Convention, Inc., Slip Op., (ND Miss., 2018), the former Executive Director of the non-party General Mission Board of the Baptist Convention for Maryland was terminated. The Plaintiff claimed the termination resulted from defamation by the American Mission Board of the Southern Baptist Convention. The Court held that they were “separate and autonomous” because both were self-governing, i.e., had their own governing boards. However, the former was a “state convention” of the Southern Baptist Convention and the latter’s board was selected at annual meetings of the Southern Baptist Convention. Indeed, these two “separate and autonomous” entities had eight jointly funded staff positions which Plaintiff supervised. The joint employees were engaged through a “partnership agreement” between the entities. When the partnership agreement came up for renewal, the Plaintiff declined it. That position either caused or resulted from a rift which eventually also led to the termination of Plaintiff. Plaintiff alleged the termination resulted from a threat of the “autonomous” American Mission Board to pull funding if Plaintiff was not terminated. The Plaintiff also claimed that the American Mission Board tried to cancel Plaintiff’s speaking engagements with a “mission symposium” and the Florida Baptist Convention Pastor’s Conference. The Plaintiff claimed that the American Mission Board posted his photograph in the reception area and labeled it in a disparaging manner causing emotional distress. The Court overruled a motion to dismiss, which means the case will proceed into discovery and possibly other dispositive motions, or even trial, before resolution. The Court held the defamation, interference with the speaking engagements and the inducement of termination, which the Court had to assume were true for purposes of the motion, could be decided without interference with ecclesiastical decision-making and that the American Mission Board was not the actual employer so the Ministerial Exception did not apply.
Like all interlocutory decisions, the eventual final decision could result in the opposite result. But, the premise of this decision, that a denomination can be carved up like a holiday turkey in a tort lawsuit, would seem to invite error. While evangelical denominations are often not strictly hierarchical, the components are not fully “autonomous” but rather “connectional.” The Court did not review the governing documents (and may not have been presented the governing documents at this early stage) in the opinion but even so noted that the board of the American Mission Board was interlocked with the Southern Baptist Convention and that the Plaintiff’s former employer was a “state convention.” Thus, none of the alleged defamation was allegedly “published,” i.e., sent outside the confines of the church. The contracts allegedly interrupted were all intra-church relationships. The Court appears to have decided to engage in resolving an intra-church employment dispute brought by an employee the Court held was probably covered by the Ministerial Exception. Nevertheless, the case is moving forward on a defamation theory and a contractual interference theory and if one court will agree to hear more, others might also.
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.
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.
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.
In states that have adopted the Neutral Principles Doctrine in non-religious issue church disputes employment contracts with non-clergy are enforceable in court. A church can contractually impair or limit the First Amendment Ecclesiastical Abstention Doctrine and the Ministerial Exception Doctrine. The financial aspect of the contract will typically not be deemed ecclesiastical even if reinstatement as a remedy is not available under these Doctrines. Courts will be reluctant to try to force reinstatement on a religious organization even for non-clergy and prefer a financial remedy. But, the remedy could be technically available.
In Saint Augustine School v Cropper, Slip Op. (KY 2017), the very brief opinion of the state supreme court did not explain why the elementary school “lay administrator” was in fact “lay.” The “lay administrator” was rehired under a written contract but then shortly after that terminated in what the court seemed to describe as a reduction in force required by a financial downturn at the school or the church. The opinion was silent as to any other reason for termination. The lower court granted summary judgment to the church based on the Ecclesiastical Abstention Doctrine. The Ministerial Exception Doctrine was not asserted by the church. Thus, the Kentucky Supreme Court reversed the lower court on neutral principles grounds.
Written employment contracts are two edged swords. Churches should use them as do businesses to reduce their exposures. But, doing it badly or autonomically usually leads to unintended consequences. Most states in the west have adopted the “at will” employment doctrine. It applies when there is no written or implied contract. State law regarding “at will” employment doctrine should be considered in the evaluation of the need for and contents of an employment contract. Written employment contracts should have a limited duration, typically short, and expressly state renewal is not automatic even if employment continues beyond expiration. There are many other considerations.
In order to determine if federal employment discrimination statutes apply to the employee of a para-church organization, a court will look to the descriptions of the employment both sides tender into evidence. On a Motion to Dismiss at the beginning of a case, this may be a very limited inquiry. Typically, motions to dismiss look only to the Plaintiff’s allegations in the Complaint or Petition and to any documents attached. On a Motion for Summary Judgment filed after discovery the range of admissible facts and exhibits may be quite broader.
In Lishu Yin v Columbia International University, Order and Opinion, (D. SC – Columbia, 2017), the Plaintiff attached an employment contract to the Complaint and made certain allegations about her employment role. The Court overruled the Motion to Dismiss. The Court determined that the description of the Plaintiff’s job in the employment contract did not establish that Plaintiff was a minister such that the case barred pursuant to the First Amendment’s Ministerial Exception. The employment contract described the job as “associate professor” and “faculty of the ministry.” The Plaintiff self-described her role as a full time resident faculty member in the “Masters of Teaching English as a Foreign Language” program. The Court held that these descriptions were not sufficient to persuade that Plaintiff was a “minister” triggering the Ministerial Exception.
The employment handbook of the institution and the employment contract cannot alone trigger the Ministerial Exception if they do not describe the ministry the jobholder is to perform. Further, the description should reflect the age or maturity level of the students, not simply be overly general boilerplate, and the handbook and contract should dovetail by referring to each other’s latest version, even if the version is not stated.