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The Extent of "Qualified Privilege" and the Legal Consequences of Violating Bylaws

Key point 4-02.03. A number of defenses are available to one accused of defamation. These include truth, statements made in the course of judicial proceedings, consent, and self-defense. In addition, statements made to church members about a matter of common interest to members are protected by a "qualified privilege," meaning that they cannot be defamatory unless they are made with malice. In this context, malice means that the person making the statements knew that they were false or made them with a reckless disregard as to their truth or falsity. This privilege will not apply if the statements are made to nonmembers.
Key point 6-02.2. Churches are subject to the provisions of their governing documents, which generally include a charter and a constitution or bylaws (in some cases both). A charter is the state-approved articles of incorporation of an incorporated church. Most rules of internal church administration are contained in a constitution or bylaws. Specific and temporary matters often are addressed in resolutions. If a conflict develops among these documents, the order of priority generally is as follows: charter, constitution, bylaws, and resolutions.
Key point 6-08. State and federal laws provide limited immunity to uncompensated officers and directors of churches and other charities. This means that they cannot be personally liable for their ordinary negligence. However, such laws contain some exceptions. For example, officers and directors may be personally liable for their gross negligence or their willful or wanton misconduct.

A New York court ruled that a Jewish congregation's board that blocked a congregational vote on the continued employment of its rabbi could be sued for a violation of the congregation's bylaws, and defamation, and were not protected by either the "qualified privilege" or the qualified immunity from liability accorded by state nonprofit corporation law to uncompensated officers and directors. A Jewish congregation hired a rabbi for a three-year term. Two years into the term, at a meeting of the synagogue's board, the board's president, without providing the board members with prior notice that the rabbi's future status would be considered, proposed that the rabbi's employment not be continued at the end of his current term. By majority vote, the board agreed with the president's proposal.

One month later the board held another meeting. At that meeting, members of the congregation objected to the board's previous vote, claiming that it violated the congregation's bylaws as well as New York nonprofit corporation law. These members called for a vote by the entire congregation as to whether to extend or renew the rabbi's agreement to act as spiritual leader of the congregation. The board refused to allow such a vote to go forward.

Some of the board members submitted a petition demanding that the president call a special meeting of the congregation to discuss the continued employment of the rabbi following the expiration of his term, and to conduct a vote of the congregation as to the rabbi's future status. A special meeting of the congregation was called, and the president indicated that a vote on the rabbi's future would be held. However, at the meeting, an agenda was distributed that did not indicate that a vote would be taken. Upon realizing that the written agenda did not provide for a vote, many congregation members left the meeting. Nonetheless, at the meeting, a motion was made, and seconded, to approve a new three-year term for the rabbi. However, the board member who had been selected by the president to oversee the meeting, refused to allow a vote on the motion.

The rabbi and his supporters claim that during the meeting, a member defamed the rabbi by stating:

That [the rabbi] did not show up for morning services; that he failed to perform outreach for young families; that he used a different prayer book than the congregation; that he failed to lead Friday services when special evenings were planned for the same day; that he allowed non-kosher foods into the congregation's kitchen and did not properly control the kosher validation of the kitchen; and, that he did not lead the Jewish High Holiday services.

The rabbi and some of his supporters (the "plaintiffs") sued the board president and other board members (the "defendants"), claiming that their blocking of the congregational vote violated the congregation's bylaws, and that statements made about the rabbi in one of the congregational meetings (quoted above) was defamatory. A trial court denied both claims, and the plaintiffs appealed.

Violation of bylaws

The plaintiffs insisted, and the trial court agreed, that the congregation's bylaws authorized the congregation to vote on the extension of a rabbi's term of employment, and therefore the defendants had acted unlawfully in blocking such a vote. It cited a section in the bylaws stating that "a rabbi shall be employed, engaged, retained and hired for a period of time and upon terms to be determined by the board of trustees and the congregation, as the rabbi and spiritual leader of this congregation. The members, at a congregational meeting, shall approve the hiring of the rabbi."

But the defendants countered that this provision only authorized the congregation to vote on the initial selection of a rabbi, and not on the continuation of employment at the expiration of a specified term.

A state appeals court disagreed with the defendants' position, noting that "the congregation's bylaws did not limit the congregation's authority to the hiring of a rabbi only, and exclude from the ambit of the congregation's authority the power to extend or renew a hired rabbi's contract." The court noted that the congregation's bylaws "broadly authorizes" congregation members to vote on "any question affecting the congregation." The court concluded that "it cannot reasonably be disputed that the choice of spiritual leader of a congregation, and whether to renew that individual's appointment, is a question affecting the congregation."

Defamation

The plaintiffs claimed that the above-quoted statement about the rabbi made by a board member at a congregational meeting was defamatory. The defendants claimed that they were mere expressions of opinion, which cannot be defamatory.

The court noted that defamation consists of false statements about another, that are publicized, and that injure the victim's reputation. The court noted that "since falsity is a necessary element of a defamation cause of action and only facts are capable of being proven false, it follows that only statements alleging facts can properly be the subject of a defamation action." And this excludes expressions of opinion: "Expressions of opinion, as opposed to assertions of fact, are deemed privileged and, no matter how offensive, cannot be the subject of an action for defamation."

The court concluded that the board member's statements about the rabbi, made in a public meeting, pertained to matters of fact, not opinion: "Contrary to the defendants' contention, these statements have precise meanings which are readily understood, and they are thoroughly capable of being proven true or false. Thus, the defamation cause of action is not subject to dismissal on the ground that the alleged statements constitute non-actionable expressions of opinion."

Qualified privilege

The court rejected the defendants' contention that the defamation claim had to be dismissed because the board member's statements were protected by a qualified privilege. It noted that "courts have long recognized that the public interest is served by shielding certain communications, though possibly defamatory, from litigation, rather than risk stifling them altogether." One example is the "common interest privilege," which generally insulates from liability otherwise defamatory statements "made by one person to another upon a subject in which both have an interest." This qualified privilege has been applied to communications carried out "in furtherance of a common interest of a religious organization." The rationale for applying this qualified privilege in circumstances such as this is that "the flow of information between persons sharing a common interest should not be impeded."

However, the qualified privilege for statements pertaining to matters of common interest is not absolute. It "may be dissolved if plaintiff can demonstrate that defendant spoke with 'malice.'" In this regard, "malice" may be (1) "common law malice" consisting of spite or ill will, or (2) actual malice, meaning that the speaker knew that his or her statement was false, or made it with reckless disregard as to its truthfulness.

The court concluded that there was sufficient evidence of malice in this case to overcome the common interest privilege. It noted that some of the statements were demonstrably false, and were made "with common-law malice so as to overcome the common interest qualified privilege." The statements were made "with the intent to and did undermine the rabbi's authority as the spiritual leader of the congregation, and also to aid and further the defendants' goal to interfere with and prevent the efforts by the rabbi and some members of the congregation to secure his continued employment." The plaintiffs also alleged that the false statements "cast the rabbi in a negative light and reflected adversely on his competence as a rabbi, and harmed his standing and reputation with the congregants and others in the community."

Qualified immunity of board members

The defendants claimed that they were immune from liability for either defamation or violating the congregation's bylaws by blocking a congregational vote on extending the rabbi's employment. They relied on the following provision in the New York Not-for-Profit Corporation Law:

No person serving without compensation as a director, officer or trustee of a corporation, association, organization or trust described in section 501(c)(3) of the United States internal revenue code shall be liable to any person other than such corporation, association, organization or trust based solely on his or her conduct in the execution of such office unless the conduct of such director, officer or trustee with respect to the person asserting liability constituted gross negligence or was intended to cause the resulting harm to the person asserting such liability.

Note the following points regarding the qualified immunity of board members:

• It applies to directors, officers, and trustees;
• Who serve without compensation;
• Of a tax-exempt organization;
• It does not apply to intentional misconduct or gross negligence.

The court conceded that the defendant board members were uncompensated and served on the board of a tax-exempt organization. The remaining question was whether the board members who blocked the congregational vote on extending the rabbi's employment, or the board member who uttered the defamatory statement, had engaged in either intentional conduct or gross negligence since in either case there would be no qualified immunity from liability.

The court concluded that the defendant board members were not entitled to qualified immunity:

With regard to the remaining causes of action which seek money damages based on the defendants' conduct in usurping the Congregation's authority, the gravamen of the plaintiffs' claims are that the defendants, "in bad faith and with malice," usurped the congregation's authority in "refusing to allow the congregation to" vote on the issue of the rabbi's retention. The plaintiffs have alleged that the defendants refused to allow the congregants to vote on the matter in violation of … the congregation's bylaws, and notwithstanding several petitions and letters delivered to the defendants requesting that the congregation be permitted to vote on the matter. Additionally, with regard to the defamation cause of action, as concluded above, the plaintiffs alleged malice. In short, essentially all of the plaintiffs' allegations involve the intentional infliction of harm by the defendants … . Given the nature of the specific allegations as well as certain undisputed circumstances in this case, including the board's refusal to allow the congregation to vote notwithstanding several demands, on this record, we conclude that there is a reasonable probability that the plaintiffs can establish that the defendants' actions constituted gross negligence or were intended to cause the resulting harm … . Accordingly, at this stage, the defendants are not entitled to the benefit of the qualified immunity.

What This Means For Churches:

This case is instructive for several reasons.

First, it illustrates that a board's disregard of a bylaw provision authorizing congregational votes on a minister's employment may result in liability. The lesson is clear: board members, even by majority or unanimous vote, should not consider blocking a vote by the church's membership on pastoral employment issues without first reviewing the church's governing documents to be certain that such authority exists. If in doubt, consult with legal counsel.

Second, most states recognize a "qualified privilege" to defamation claims with regard to statements to church members having a "common interest" in the information communicated. But, as this case illustrates, this exception to liability based on defamation will not apply if the speaker acts with malice, which generally means making a statement the speaker knows to be false, or is made with a reckless disregard as to its truthfulness. So while the qualified privilege is important, and often will apply to statements made in church meetings, it is not absolute. It will not apply to statements that are made with malice. And, while the court did not address this issue, many other courts have limited the qualified privilege to statements made to church members, meaning that the privilege does not apply to meetings in which nonmembers are present.

Third, this is one of the few cases to address the application of a state nonprofit corporation law's limited immunity provision to uncompensated board members of a religious congregation. The court concluded that the immunity provided by state law is limited or qualified, meaning that it does not apply to intentional misconduct or gross negligence. Kamchi v. Weissman, 1 N.Y.S.3d 169 (N.Y. App. 2014).

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Posted:
  • February 23, 2016

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