Key point 8-10.1. The civil courts have consistently ruled that the First Amendment prevents the civil courts from applying employment laws to the relationship between a church and a minister.

A federal court in Indiana ruled that the "ministerial exception" prevented it from resolving a lawsuit of a former principal at a Catholic high school claiming that the school's failure to renew her employment contract amounted to unlawful sex, age, and disability discrimination. A woman (the "plaintiff") served as a public elementary school principal for 17 years. In late July 2012, she was hired as the principal of a Catholic high school for the 2012-2013 school year. In late spring 2013, she was offered, and accepted, the position of school principal for the 2013-2014 school year. On March 3, 2014, the plaintiff was informed that her contract would not be renewed for the following year. The plaintiff sued the Diocese for employment discrimination based on sex, age, and disability as well as various state-law claims.

The plaintiff had signed a written one-year contract for each of the 2012-2013 and 2013-2014 school years. The contract for the 2013-2014 school year included a "Ministerial Duties/Morals Clauses" that provided, in part:

To be [the] Principal in a Catholic school is to accept a ministry. The ministry of the Principal must clearly reflect the Catholic Christian spirit of love, understanding, and humility. This ministry is witnessed not only in the manner in which the Principal performs his/her tasks, but also in the example the Principal sets for the teachers and students both in and outside the School and parish, and including everyone associated with the School, parish, and diocese … . Furthermore, in carrying out his/her duties under this agreement, the Principal agrees to faithfully reflect the teachings of the Roman Catholic Church, in mind and in deed, and at all times, both in and out of School, to abide by the official teachings of the church, as interpreted by the Bishop of the Diocese. [The] Principal understands that every subject taught in the School is embedded in Catholic theology and that part of the Principal's ministry in the School is to apply the theology, doctrine, and teachings of the Catholic Church in every aspect of the School and in every duty of a principal. Failure to comply with the terms of the Part A "Ministerial Duties/Morals Clauses" may result in the immediate termination of this contract.