• Key point. Sexual harassment is a form of "sex discrimination" prohibited by Title VII of the Civil Rights Act of 1964, and by several state laws. It occurs when (1) an employee's job or other privileges of employment are conditioned upon submitting to sexual demands, or (2) an employee is exposed to a "hostile work environment" involving unwelcome verbal or physical conduct of a sexual nature that is sufficiently severe or pervasive to alter the conditions of the victim's employment and create an abusive working environment.

• Key point. Title VII only applies to employers that (1) have 15 or more employees, and (2) are engaged in interstate commerce. Accordingly, it does not apply to most churches (it does apply to many denominational agencies engaged in interstate sales).

• Key point. Title VII does not apply to most churches. However, most states have enacted their own civil rights laws that often ban sex discrimination and sexual harassment, and it is much more likely that these state laws will apply to churches. As a result, sexual harassment is a theory of liability that all churches should take seriously.

• Key point. Employers who dismiss employees for sexual harassment may face wrongful dismissal lawsuits.

A federal court in California ruled that a female minister failed to prove that her denominational agency had engaged in sexual harassment. A woman (the victim) was employed as national director of a department of a denominational agency (the Buddhist Churches of America or BCA). She is ordained as a Buddhist minister. She alleged that in 1991 she began receiving a series of heavy breathing telephone calls at her residence. She says that her phone number was not listed in the local telephone directory, but was published in the BCA directory. She claims that the heavy breathing calls continued for the next few years, even though she changed her unlisted phone number several times. In 1993, she went to an annual meeting of Buddhist minister at a hotel in California. On the first evening of the meeting, after midnight, she was awakened by a telephone call very similar in character and nature to the harassing telephone calls she had been receiving at her home since 1991. The caller spent several seconds breathing heavily and then whispered, "I want you" over and over. The victim asked, "Who is it?" and, when she received no response, hung up the phone. After hanging up the phone, she immediately called the management of the hotel, reported the call and asked if the hotel could identify the caller. The next morning, the hotel management called the victim and told her they had traced the call to another room in the hotel and said they would put the party in that room on the line. A Buddhist minister then came on the line. The minister claimed that he did not place the call and asserted that several people had been in his room. The victim reported the entire incident to her bishop.