The lack of any written contract will generally make a Pastor an at will employee. Termination would be governed by the church or denominational governing documents however the process may be outside the reach of a secular court because of ecclesiastical concerns. When there is a written employment agreement, secular contract terms in a pastor’s written employment contract may be subject to the Neutral Principles of Law in many jurisdictions such that a breach of contract action might be successful. However, termination decisions are generally at best both religious, or moral, and secular decisions the mix of which might put the termination decision outside of the reach of a secular court. Thus, enforcing a secular contract term in a termination may be problematic. Because of the entanglement between religious reasons for termination and secular reasons for termination of a minister, the Ecclesiastical Abstention Doctrine of the First Amendment will generally preclude judicial intervention in terminations. Some judges, and some courts, will believe the secular contract terms can be surgically separated from the termination. However, it seems that most courts will not be comfortable trying to parse the factual issues.
In the case of In Re First Christian Methodist Evangelistic Church, Slip Op. (Tex. Civ. App. 5th, Dallas, 2019), the appellate court ordered the trial to court to dismiss the case. The trial court apparently believed it could parse secular contract issues, such as entitlement to a six-month severance, from whether the termination was for religious cause. Because the termination resulted from a vote of the qualified congregation members, verifying the exact reasons for termination would have required an exhaustive inquiry. At the end of the factual inquiry, there still would have been no logical way to separate the termination of the pastor from religious reasons that might or might not impact the right to severance.
Pastors should avoid “for cause” termination provisions. A church will always have a “for cause” basis if pressed. Such a clause probably offers no protection. If there is a severance provision negotiated, it should be triggered on involuntary termination only and not on the reason for the termination. The Pastor may be unable to enforce the provision if a severance provision is dependent on conduct. The “I did nothing wrong” defense tends to be irrelevant to courts if the claimed “wrong” is religious in nature. Because it is unlikely the severance package negotiated at the date of hire is likely to be as expensive as litigation, the hiring church might share that preference with the Pastor. For the church, finality in the conclusion of the relationship may be more cost effective than a prolonged dispute over whether a severance package is “deserved.”
Congregations can be fickle. Every pastor knows the congregation can vote with their feet, i.e., leave; vote with their money, i.e., give less to the church; and change the channel, i.e., look for better religious entertainment. Some churches change pastors every three or four years in some sort of misguided search for the “right fit,” or the right dynamism. In response, in order to obtain some level of stability, pastors sometimes negotiate employment contracts.
In Lee v Sixth Mount Zion Baptist Church, Slip Op. (3rd Cir. 2018), the United States Court of Appeals for the 3rd Circuit affirmed a Pennsylvania federal trial court’s decision to grant summary judgment to a church in a breach of employment contract case. The trial court granted summary judgment to the church, even though the church was not moving for summary judgment but was only resisting the motion for summary judgment presented by the former pastor. The former pastor sued because he was terminated by the church twenty months into his twenty year written employment contract. The employment contract permitted termination for cause and for “material breach.” At the congregational meeting voting to confirm the employment contract, the pastor himself defined “material breach” as “not growing,” “stagnant,” “not a better place,” and “if he did not perform his duties well.” The church alleged it experienced a 39% decline in collections, a 32% drop in Sunday worship attendance, a 61% decrease in registered members, a doubling of church expenditures, and a decline in church “community outreach.” The pastor did not deny those facts but alleged his service was not the cause of those changes in the church. The pastor sought damages of more than $2,000,000 for the income lost in the unexpired term of the contract. The trial court granted summary judgment to the church because to resolve the case would, the trial court held, impermissibly entangle the court in determining whether Lee’s ministry as pastor was “adequate spiritual leadership” and “how that translates into donations and attendance.” Such inquiries, the Court held, would violate the First Amendment ministerial exception as explicated in Hosanna-Tabor Evangelical Lutheran Church v EEOC, 565 US 171 (2012) because the Court would entangle itself in a factual inquiry as to whether the church’s defenses were a pretext.
There are lessons here from two perspectives. The pastor probably should not have agreed in a congregational meeting to define “material breach” as he did. This undoubtedly created a high expectation too early in the relationship and a numerical metric both of which would fluctuate subjectively and objectively in the short term while the contract was designed for a long term. The church maintained its options by incorporating the church bylaws as a material term in the employment contract which required that the pastor provide “spiritual leadership,” a role a secular court cannot evaluate.
This report will be the second this year in which defamation was a significant or primary claim. In our post of February 8, 2018, entitled Internal Church Reorganization Defense, the defamation claim in a Texas case was dismissed because there was not a “scintilla of evidence” supporting it. The defamation claim was lodged in an employment case arising from a position lost due to an internal church reorganization, pretextual or not, but was not strong enough to carry the case.
In Diocese of Palm Beach, Inc. v Gallagher, Slip Op. (FL App., 4th Dist. 2018), a clergyman sued for defamation but his damages claims were all wrongful termination damages such as front pay, back pay, lost wages, and lost wage earning capacity. Typically, defamation damages are the dollar value of loss of reputation. Reputation was more of a nineteenth century damages concept although even today it can be a credible claim for damages in rare instances. As a result, the trial court held the case was a wrongful termination claim masquerading as a defamation claim and dismissed it on Ecclesiastical Abstention Doctrine grounds. The trial court may not have reached the Ministerial Exception Doctrine but probably would have if the case had continued. The Florida Court of Appeals affirmed. The facts of the case were interesting because the clergyman reported to secular authorities a child sexual abuse by another clergyman resulting in criminal prosecution and deportation of the offending clergyman. But, meanwhile, parishioners complained about the ministerial performance of the Plaintiff. The opinion leaves unanswered the question of whether the complainants were affiliated with the alleged abuser by ethnicity or national origin. Relying on those complaints, the diocese did not promote the Plaintiff to pastor but transferred him to another church. The Plaintiff gave an interview to the media which was reported as scathing to the diocese. The diocese responded with its own public denunciation of the Plaintiff, including a claim the Plaintiff “needed professional help” and was unfit to serve as a clergyman. The Plaintiff alleged the public statements of the diocese were defamatory. The trial court held that to resolve the claims the trial court would have to explore Plaintiff’s fitness which would involve the court in a church disciplinary matter crossing into ecclesiastical matters.
The actions that made the dispute intractable for both sides were their public comments and maybe, too, that their public statements were harsh. It is impossible to judge from this vantage point whether both or either speaker spoke irresponsibly, but both failed to count the legal cost of what was said. The more pressing problem that was not addressed insofar as can be gleaned from this court’s opinion was the lack of an internal hearing by church officers. Whistleblowers treated as pariah’s, even if there is no lawsuit, will remain a distraction for longer than would be the case if there was a full hearing and fact finding. The church need not and should not conduct such an inquiry in public but rather should adopt confidentiality provisions to cloak the inquiry. The purpose of the hearing is to make certain both whistleblower and church leadership have fully addressed all issues or frankly discussed disagreements. Another possibility is to engage outside counsel to conduct the inquiry and to carefully interview the whistleblower and make confidential recommendations to church leadership. Only by taking such substantive action is there hope either will trust the other.
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.