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Pastor Permitted to Sue Church for Breach of Contract

Have employment contracts reviewed by legal counsel to protect against liability.

Key point 2-04.2. Some courts are willing to resolve disputes over the termination of clergy if they can do so without any inquiry into religious doctrine.

A Pennsylvania appeals court ruled that a dismissed pastor was not barred by the First Amendment guaranty of religious freedom from suing his former church for breach of contract so long as a resolution of the dispute would not require the court to inquire into religious doctrine or polity. A church hired a pastor in 1999, but did not enter into a written employment agreement with him until 2005. The employment agreement contained a number of provisions, including an employment term of two years. The agreement specified that it could be amended with "only the unanimous consent of both the pastor and the church." In 2006, several church members became dissatisfied with the pastor's performance, which resulted in a congregational vote to terminate his employment contract.

The former pastor sued the church for breach of contract, and sought $77,000 in damages. The church asserted that the First Amendment guaranty of religious freedom barred the civil courts from intervening in internal church disputes, and therefore the lawsuit had to be dismissed. The trial court conducted a hearing to determine whether the case could proceed. The former pastor and chairman of the church board testified that the dismissal was financially motivated. But other church leaders testified that the termination was rooted in the former pastor's "damaging the spiritual welfare of the church … members were divided and membership had left, membership was dwindling."

The court concluded that the dispute was religious in nature, pertaining to the fitness of the former pastor. As a result, it dismissed the lawsuit. The former pastor appealed, claiming that the underlying dispute (breach of contract) did not turn on religious doctrine or polity, but rather, sought the enforcement of a secular right through civil contract law. As a result, the First Amendment did not bar his lawsuit.

A state appeals court reversed the trial court's ruling and ordered the case to proceed to trial. It acknowledged that the First Amendment bars the civil courts from intervening in church disputes that involve questions of "discipline, or of faith, or ecclesiastical rule, custom, or law." The court insisted, however, that not all church employment disputes involve such issues. It made the following additional points in support of its decision:

  • "A church is always free to burden its activities voluntarily through contracts, and such contracts are fully enforceable in civil court."
  • "The First Amendment does not exempt religious institutions from all statutes that regulate employment. For example, the First Amendment does not exempt religious institutions from laws that regulate the minimum wage or the use of child labor, even though both involve employment relationships."
  • "All disputes among members of a congregation, however, are not doctrinal disputes. Some are simply disputes as to the meaning of agreements on wills, trusts, contracts, and property ownership. These disputes are questions of civil law and are not predicated on any religious doctrine. While it is true that parties may agree to settle their disputes according to their own agreed fashion, the question of what they agreed to, or whether they agreed at all, are not doctrinal and can be solved without intruding into the sacred precincts."

The court conceded that "the First Amendment protects a church's right to hire, fire, promote, and assign duties to its ministers as it sees fit not because churches are exempt from all employment regulations (for they are not) but rather because judicial review of those particular employment actions could interfere with rights guaranteed by the First Amendment." But it concluded that the trial court's decision dismissing the lawsuit was "premature and went too far, especially given the presence of conflicting accounts in the record as to the basis for the termination of the pastor's employment."

The court agreed that the trial court "would have been correct if the issue was doctrinal, but this case initially turns upon whether a contract existed at all and not the predicate for the termination; an issue that requires no doctrinal exegesis."

The court conceded that "it could turn out that in attempting to prove his case [the pastor] will be forced to inquire into matters of ecclesiastical policy even as to his contract claim. Of course, in that situation, a court may grant summary judgment on the ground that pursuing the matter further would create an excessive entanglement with religion. On the other hand, it may turn out that the [pastor's breach of contract claim] is subject to entirely neutral methods of proof. The speculative nature of our discussion here demonstrates why it is premature to foreclose the pastor's contract claim. Once evidence is offered, the trial court will be in a better position to control the case so as to protect against any impermissible entanglements. Thus, while the First Amendment forecloses any inquiry into the assessment of the pastor's suitability for a pastorship … it does not prevent the court from determining whether the contract alleged by the pastor in fact exists."

The court concluded that the pastor "should be afforded the opportunity to demonstrate that he can prove his case without resorting to [religious doctrine]." The hearing conducted by the trial court "did not afford him the opportunity to prove that excessive entanglement into church matters need not occur to prove his breach of contract claim. On remand, if he is able to prove such a proposition, application of state law to his contract claim would not violate the First Amendment. If the facts prove to be otherwise, a motion for summary judgment may be granted infavor of the church."

Application. This decision deviates from the vast majority of court rulings refusing to resolve internal church disputes involving the fitness or tenure of a pastor. Most courts (including the trial court in this case) have concluded that the relationship between a church and its pastor inevitably implicates religious issues that are off limits to the courts.

There is one aspect to this case that should be noted. The pastor's breach of contract claim was based on the following facts: (1) he and the church entered into a written contract of employment; (2) the contract specified that the pastor's term of employment would be two years; and (3) the contract specified that it could only be changed by "unanimous consent" of both parties (i.e., the pastor and the church). The problem, of course, was that the pastor did not agree with the church's decision to terminate his employment prior to the expiration of his two-year term, and as a result, there was no unanimous consent to this change in the contract. The lesson is clear. Employment contracts should be reviewed by legal counsel to protect against unforeseen legal liability. Had the contract contained a clause giving the church the unilateral authority to terminate the pastor's tenure prior to the end of the two-year term, or if the duration of the employment was indefinite, the pastor's claim would have been rejected by both the trial court and appeals court. Mundie v. Christ United Church of Christ, 987 A.2d 794 (Pa. Super. 2009).

This Recent Development first appeared in Church Law & Tax Report, March/April 2011.

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Posted:
  • March 1, 2011

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