Can One Church Warn Another of a Former Employee's Misconduct?

If Church A dismisses an employee for misconduct and the former employee is hired by Church B, does Church A have a legal duty to warn Church B about the employee’s misconduct?

This article will review a recent case addressing this question, review several other cases, and conclude with a helpful checklist.

A recent case: McRaney v. Mission Board

In McRaney v. Mission Board, 304 F. Supp.3d 514 (N.D. Miss. 2018), a federal district court in Mississippi ruled that it was not barred by the ministerial exception or ecclesiastical abstention doctrine from resolving a case involving a minister’s claims against a denominational missions board.

Facts

A missions agency terminated the employment of its executive director (the “plaintiff”), an ordained minister. The plaintiff said an unrelated denominational missions board interfered with his business and contractual relationships with third parties, including the agency that fired him. He cited three specific claims:

He was scheduled to speak at a pastors conference in November 2016, but alleged that missions board staff attempted, unsuccessfully, to get his appearance canceled.
The missions board intentionally took steps to have his employment with the missions agency terminated—steps that proved successful.
He was scheduled to speak in October 2016 at a missions symposium until missions board employees allegedly spoke to organizers of the event and had him uninvited.
The lawsuit
The plaintiff sued the missions board in a federal court, alleging three counts of intentional interference with business relationships. The court rejected the missions board’s motion to dismiss the case. It noted that under Mississippi law, the elements of intentional interference with a contractual relationship are:
that the acts were intentional and willful;
that they were calculated to cause damage to the plaintiff in his or her lawful business;
that they were done with the unlawful purpose of causing damage and loss, without right or justifiable cause on the part of the defendant (acts thus constituting malice);
that actual damage or loss resulted; and
the defendant’s acts were the proximate cause of the loss or damage suffered by the plaintiff.
The court noted that to succeed a plaintiff “must prove that the contract would have been performed but for the alleged interference,” and that
because an essential element is that the plaintiff suffer some damage or loss, the court holds that the plaintiff’s claim that the missions board intentionally interfered with his scheduled appearance at the pastor’s conference fails. Despite the board’s actions, the plaintiff admits that his speech was not canceled and he therefore did not suffer damages. The plaintiff therefore cannot state a claim for interference with that relationship and that claim shall be dismissed.
However, the court concluded that the plaintiff could pursue his other two claims of interference with a contractual relationship:
In regard to the plaintiff’s other two claims for intentional inference, the court finds that he has met his initial pleading burden and that dismissal of those claims at this juncture is thus inappropriate. First, with regard to his relationship to his employer, he has alleged that the missions board intentionally acted to have his employer fire him, and that he was actually fired as a result of those actions. These allegations are sufficient at this juncture to state a claim for intentional interference under these alleged facts.
Second, he has sufficiently alleged that the missions board intentionally sought to have his speech [at the missions symposium] cancelled and that it was actually cancelled as a result, thus causing him damage. These allegations are likewise sufficient to state a claim for intentional interference at this juncture. Accordingly, the court shall deny the board’s motion to dismiss these two interference claims.
The court concluded that the ministerial exception, which bars civil courts from resolving most employment disputes between churches and clergy, did not apply since the plaintiff was not an employee of the missions board that he was suing:
He was indisputably not employed by the missions board, this is not a claim between employer and employee, is not a claim that arises out of employment decisions made by the sole defendant, and thus the ministerial exception does not apply to mandate dismissal of any of the plaintiff’s claims.
Four case studies
In many states, one who interferes with an existing contract between two other parties can be sued for “interference with contract.” To illustrate, assume that a church dismisses a pastor for adultery. The pastor is later hired by another church. After a few months, a denominational official learns of the pastor’s new job, and contacts the board members of the new church to inform them of the pastor’s previous misconduct. As a result of this unsolicited disclosure, the church board decides to terminate the pastor’s employment. The pastor may be able to sue the denominational official for interference with contract.
Note that this basis of liability requires the existence of a contract. If the church had asked the denominational official for a reference prior to the date the pastor was hired, there ordinarily is no interference with contract. The timing of reference is critical. If it comes before the prospective employee is hired, there ordinarily can be no interference with contract. If it comes after the employee is hired, there may be liability if it results in the new employee’s termination.
Consider the following examples from actual cases.
CASE STUDY 1 The Alaska Supreme Court ruled that a denominational official in the Presbyterian Church (USA) could be sued on the basis of interference with contract for making disparaging comments about another minister who recently had been hired by a local church.
A Presbyterian minister left a pastoral position in Alaska and accepted a call as minister of a Presbyterian church in Tennessee. When he presented himself to the church to begin his duties, he was informed by church officials that because of derogatory information the church had received from a denominational official (an executive presbyter in Alaska), the church would not hire him. The presbyter had informed church leaders that the minister was divorced, dishonest, unable to perform pastoral duties because of throat surgery, and that he had made an improper sexual advance to a church member in Alaska .
The minister sued the presbyter for intentional interference with his employment contract with the Tennessee church. Generally, one who intentionally interferes with a known contract can be sued for damages. The state supreme court concluded that the civil courts can make this determination without any inquiries into internal church discipline.
The court drew an important distinction between clergy who are seeking a pastoral position and those who have been hired. If a church official makes derogatory remarks about a minister who already has been hired by a local church, and if those remarks induce local church leaders to terminate the employment agreement, then the church official can be sued for interference with contract. The court insisted that such claims ordinarily will not involve inquiries into core ecclesiastical issues. This suggests that church officials should be more cautious in making remarks about clergy who already have been hired by a local church or other religious organization. Marshall v. Munro, 845 P.2d 424 (Alaska 1993).
CASE STUDY 2 An Illinois appeals court dismissed a lawsuit brought by a Methodist minister against a Methodist conference for breach of contract and wrongful interference with contractual relations. The minister claimed that, despite his “good and satisfactory work” as pastor of a local church, he was assigned by the conference to another church—which constituted “a severe demotion in terms of the number of church members, compensation, and opportunity for service.” He further claimed that the conference ordered his transfer without a “consultation” with the churches involved (as required by the Methodist “Book of Discipline”) and therefore amounted to a breach of contract. The conference claimed that the dispute was a purely ecclesiastical matter over which the civil courts had no jurisdiction, and accordingly asked the trial court to dismiss the lawsuit. A state appeals court dismissed the lawsuit on the basis of the “ecclesiastical abstention” doctrine which bars the civil courts from interfering with internal church disputes that implicate doctrine or polity. Williams v. Palmer, 532 N.E.2d 1061 (Ill. App. 3rd Dist. 1988).
CASE STUDY 3 A Louisiana court suggested that it could not resolve a priest’s claim that a church official was guilty of interference with contract as a result of the contents of a letter of reference. A Catholic priest who had been accused of molesting a child was investigated by church officials. He later filed a lawsuit claiming that a church official interfered with his employment prospects as a Navy chaplain as a result of a letter of reference that referred to “some accusations of questionable behavior and some complaints about [the priest’s] ministry.” The church official insisted that the letter of reference pertained to the fitness of the priest for assignment to a chaplaincy position—a matter beyond the reach of the civil courts. The court did not address this issue directly, but seemed to acknowledge that internal communications among clergy or church leaders regarding the fitness of a minister cannot give rise to civil liability. Hayden v. Schulte, 701 So.2d 1354 (La. App. 1997).
CASE STUDY 4 A New Jersey court ruled that a church acted properly in dismissing its music director for criminal acts. After working for the church for a few months, the music director was arrested for possession of illegal anabolic steroids. It was later disclosed that the music director had been taking steroids to assist him with bodybuilding, and that he had ordered several shipments of steroids shipped directly to the church to avoid detection. The music director was dismissed, and later applied to another church for similar employment. His application was rejected when the church contacted the previous church and was informed by the pastor of what had happened. The music director sued his former church, alleging breach of contract. He also claimed that the pastor, by informing the other church of the music director’s criminal activities, had wrongfully “interfered with his prospective economic advantage.”
The trial court dismissed the music director’s assertion that the church had wrongfully interfered with a “prospective economic advantage.” It noted that the music director could not show that “there was an intentional, without justification, interference” with his economic advantage. Further, the court pointed out that the pastor had disclosed the information only after it was requested, and the information was of criminal conduct admitted by the music director and covered in the newspaper. Additionally, the pastor was protected by a “qualified privilege” for employment references, meaning that he could not be liable unless his reference contained information that the pastor knew to be false. McGarry v. Saint Anthony of Padua Roman Catholic Church, 704 A.2d 1353 (N.J. Super. 1998).
Six key considerations
1. Typical cases
According to the principle of interference with contract (sometimes referred to as “interference with economic advantage”) a former employer may be liable if it intentionally interferes with an existing employment relationship between a former employee and a new employer. This generally means that the former employer gratuitously, and without being asked, informs the new employer of past indiscretions by the employee that result in the termination of his or her employment. These cases typically fall into one of the following two scenarios:
A former employee of a church is dismissed due to sexual misconduct. The lead pastor later learns that this employee was hired by another church. The employee’s new employer never asked his former employing church for a reference. The pastor of the former employing church calls the pastor of the new employing church and asks if he was aware that the employee was dismissed by the former church for sexual misconduct. The pastor is shocked, and immediately decides to terminate the employee. The dismissed employee sues his former employing church for interference with contract.
A church dismisses an employee because of embezzlement, and the employee is later hired by another church. The pastor of the former employing church discovers that the dismissed employee is now working for another church, and he calls the pastor of the new employer and shares about the embezzlement. Based on this unsolicited communication, the employee is terminated from her new job. She later sues her former church and pastor for interference with contract.
2. Proving interference with contract
While the definition of interference with contract varies from state to state, most states define the term to consist of the existence of a contract (an employment relationship), and some intentional act by a former church or pastor that interfered with that contract. This basis of liability requires the existence of a contract. If an employer asks a former employer for a letter of reference prior to the date an applicant is hired, there is no interference with contract.
Some courts have extended the principle of interference with contract to the preemployment stage, referring to this as “interference with prospective contractual relations.” This requires proof of the following elements: (1) a “reasonable probability” that the plaintiff would have entered into the prospective relationship or contract; (2) a wrongful act by the defendant that prevented the relationship from occurring; (3) the defendant did such act with a conscious desire to prevent the relationship from occurring, or knew that the interference was certain or substantially certain to occur as a result of the defendant’s conduct; and (4) the plaintiff suffered actual harm or damage as a result of the defendant’s interference.
3. Misunderstanding the legal duty to “warn”
Many church leaders believe that if they learn that a former employee who was dismissed for misconduct has been hired by another church, they have a legal duty to “warn” the other church of the employee’s misconduct and the potential risk he or she poses to others. But few courts have reached such a conclusion. In a leading case, the Wisconsin Supreme Court unanimously ruled that a church does not have an affirmative duty to warn future employers that one of its ministers had molested several boys. Hornback v. Archdiocese of Milwaukee, 752 N.W.2d 862 (Wis. 2008).
In the Wisconsin case, five adult males (the “plaintiffs”) alleged that they were sexually abused by a priest from 1968 to 1973 when he was employed as a teacher by a parochial school in Kentucky. The plaintiff’s lawsuit described an ongoing pattern of sexual abuse of children by the priest over the years. The plaintiffs alleged that, prior to 1964, he had engaged in inappropriate sexual conduct while at a Catholic seminary; that between 1964 and 1966, he abused more than two dozen children while a teacher at a Wisconsin parochial school; that he subsequently admitted to sexually abusing up to ten more children at another Wisconsin parochial school; and that the pattern of sexual abuse continued while he was a teacher at the parochial school in Kentucky.
The plaintiffs sued the Wisconsin diocese (the “Diocese”), claiming that it “knew or should have known of the priest’s propensity for sexually abusing children and, despite this knowledge, did not refer him to the police or take any other action to prevent him from continuing his pattern of sexually abusing children.” The lawsuit further alleged that the failure of the diocese to refer the priest to the police or to take “other action to prevent a continuation of his pattern of sexually abusing children” amounted to negligence, and that the diocese’s negligent conduct was a substantial factor in causing the priest’s sexual abuse of, and resulting injuries to, the plaintiffs. The plaintiffs specified that such negligence in failing to take other action specifically included a negligent failure to warn “unforeseeable third parties,” including “other dioceses within the United States, the parochial school systems or the parents of unforeseeable victims” of the priest’s propensity for sexual abuse.
The court noted that the plaintiffs’ negligence claim “is premised on an alleged failure to warn unforeseeable third parties, including any potential future employers of the priest at dioceses and parochial school systems everywhere in the country, as well as parents of unforeseeable victims.”
The Diocese insisted that the law does not “impose a duty on employers to seek out and disclose information to an employee’s subsequent employers or the public at large concerning a former employee’s history of misconduct or antisocial behavior,” and that under the legal theory of negligent referral or duty to warn “unless an employer gives a favorable reference to a subsequent employer or third party about the former employee while withholding negative information, there is no breach of duty established by the employer’s failure to seek out subsequent employers and alert them to prior negative history of the former employee.”
The court concluded:
The Diocese’s mere knowledge of the priest’s past sexual abuse, or a presumed knowledge of a continued sexual propensity for abuse, is not enough to establish negligence. Reasonable and ordinary care does not require the Diocese to notify all potential subsequent employers within dioceses and parochial school systems across the country, along with all parents of future unforeseeable victims. Requiring such notification under these circumstances would create a vast obligation dramatically exceeding any approach to failure to warn recognized either in this state or in other jurisdictions. . . .
More importantly, in this case, the specific victims were unforeseeable. Foreseeability of specific victims becomes relevant when an affirmative obligation is argued, such as the obligation to warn. Moreover, the Diocese did not assume a special role in regard to the injured parties. . . .
The plaintiffs in this case had virtually no relationship with the Diocese. There are significant gaps temporally and geographically, with the plaintiffs separated from the Diocese by several state lines and their abuse separated from the priest’s employment with the Diocese by a number of years, and the complaint never indicated that their paths crossed at all prior to the plaintiffs filing this action. Thus, the relationship between the parties in this case is quite attenuated.
There is no state in which employers are recognized as being negligent for failing to seek out, find, and warn future employers of sexually dangerous former employees. Even those states that have recognized a negligent referral doctrine do not impose liability when a referral letter is sent by a past employer to a future employer of such an employee unless actual misrepresentations are made in such a letter.
Thus, we conclude that the plaintiffs’ complaint fails to allege negligence sufficiently to survive a motion to dismiss. Although the plaintiffs allege that the Diocese knew that the priest had a propensity for sexual abuse, what is more pertinent is what the plaintiffs did not allege. They did not allege that the Diocese knew that he was in Kentucky, still teaching children, or working for the Archdiocese in Louisville. They did not allege any knowledge that the children at the [parochial school in Kentucky] were in any danger. They did not allege that the Archdiocese of Louisville asked the Diocese for a reference, that the Diocese made a reference recommending the priest, or that the Diocese had any communication whatsoever with the Archdiocese of Louisville regarding the priest.
The plaintiffs also fail to provide legal authority supporting their arguments. They argue that the duty of ordinary care in this case encompasses a specific obligation to warn all parochial schools and dioceses in this country, as well as future parents of unforeseeable victims, but have cited no cases in which the failure to warn third parties has been described in such sweeping
terms. . . .
We decline to rule that under the general duty of ordinary care recognized in Wisconsin, an employer may be found negligent for failing to warn unforeseen third parties of a dangerous former employee. Such a ruling would extend an employer’s obligation to warn indefinitely into the future to a sweeping category of persons, thereby requiring employers to warn nearly all potential future employers or victims, as the plaintiffs in this case argue. . . . A decision to the contrary would create precedent suggesting that employers have an obligation to search out and disclose to all potential subsequent employers, which could include in an employment context every school in the country or beyond, all matters concerning an ex-employee’s history. . . . The primary public policy problem with recognizing the claim as presented by the plaintiffs is that there is no sensible stopping point to recognizing negligence claims for such an open-ended and ill-defined sweeping claim. Recognizing the plaintiffs’ claim against the Diocese in this case could result in requiring all employers to warn all unforeseen potential future employers of any number of problems related to any number of past employees. It could further result in all parents who become aware that their child was sexually abused then facing potential liability for not warning every other parent who might also have children at risk of being in contact with the perpetrator.
Note that the court suggested that its ruling might not relieve churches from liability for providing positive, unqualified references on former employees who committed sexual or other misconduct, or for failing to warn other churches where it knows such former employees are working. But, there is no affirmative duty to track former employees in order to give notice to all future employers and potential victims of the risk they face. It should also be noted that churches may face civil liability on the basis of interference with contract for gratuitously warning future employers of a former employee’s previous misconduct if a reference was not requested and the result of the negative reference is the employee’s dismissal.
4. American Bar Association statistics
The American Bar Association monitors civil litigation statistics and trends. In a recent year, interference with contract had the highest “plaintiff win rate” (70 percent) of all liability claims. This means that plaintiffs who sued a former employer for gratuitously sharing information about prior misconduct resulting in the termination of the plaintiff’s job were successful in 70 percent of all lawsuits against their former employer.
5. Possible exception
In a unanimous 2012 ruling, the United States Supreme Court affirmed the so-called “ministerial exception” barring civil court intervention in employment disputes between churches and ministers. Hosanna–Tabor Evangelical Lutheran Church and School v. E.E.O.C., 132 S. Ct. 694 (2012). The ministerial exception has been applied to a wide range of employment disputes by state and federal courts over the past half century. Some courts have ruled that the exception applies to interference with contract claims by dismissed clergy. But as the case addressed in the beginning of this article demonstrates, other courts have disagreed.
6. Volunteers
Interference with contract generally requires an employment relationship, and for this reason most courts have concluded that this basis of liability does not apply if a former employer warns a current employer of the past misconduct of one of its uncompensated volunteers (even if the volunteer had been an employee of the former employer).
Checklist: reducing the risk of interference with contract lawsuits
When a church dismisses an employee for misconduct, and church leaders later learn that the dismissed employee has been hired by another church, the former employing church should consider several precautions before gratuitously informing the new employer of the employee’s prior indiscretions:
Employers generally have no legal duty to inform future employers of the prior indiscretions of one of their employees.
Informing an employer of the misconduct of one of its employees that results in that employee’s dismissal may expose the former employer to liability based on interference with contract. The idea is that the current employer could have asked the former employer for a preemployment reference—but for whatever reason chose not to do so. Under these circumstances why should the former employer assume the legal risk of furnishing information about a current employee that the current employer did not request when the person was being considered for employment?
Some church leaders may conclude that that they are compelled by ethical considerations to inform the current employer of an employee’s past misconduct and are willing to assume the risks.
Some courts have ruled that the “ministerial exception,” which bars civil court resolution of employment disputes between churches and clergy, applies to interference with contract claims. But some courts have ruled that the exception does not apply.
For interference with contract to occur, an employment contract must exist. This means that a former employee must have been hired by another employer, and that the employment “contract” is terminated due to the negative information shared by a former employer. As a result, there is less risk in sharing negative information about a former employee who is being considered for employment by another employer.
Some courts have extended the principle of interference with contract to the preemployment stage, referring to this as “interference with prospective contractual relations.” This requires proof of the following elements: (1) a “reasonable probability” that the plaintiff would have entered into the prospective relationship or contract; (2) a wrongful act by the defendant that prevented the relationship from occurring; (3) the defendant did such act with a conscious desire to prevent the relationship from occurring, or knew that the interference was certain or substantially certain to occur as a result of the defendant’s conduct; and (4) the plaintiff suffered actual harm or damage as a result of the defendant’s interference.
If a church is asked for a reference on a former employee who was dismissed for misconduct, any risk of liability for providing a negative reference may be reduced by requiring the former employee to sign a release that absolves the church of any liability for providing a reference.
Because of the legal issues involved and the potential liability, churches that dismiss an employee for misconduct should not inform subsequent employers of the misconduct without first obtaining legal counsel.
Richard R. Hammar is senior editor of ChurchLawAndTax.com.

Richard R. Hammar is an attorney, CPA and author specializing in legal and tax issues for churches and clergy.