Defamation Claim Against Church

Courts may resolve church disputes if they can do so without inquiring into church doctrine.

Church Law & Tax Report

Defamation Claim Against a Church

Courts may resolve church disputes if they can do so without inquiring into church doctrine.

Key point 6-06.4. Church officers and directors can be removed from office in the manner authorized by the church’s governing documents. It is common for church bylaws to give the membership the authority to remove officers and directors who engage in specified misconduct or change their doctrinal position.

A South Carolina court ruled that it could resolve a defamation claim brought by dismissed church board members against their church since it could do so solely on the basis of neutral principles of law without any inquiry into church doctrine. A church relocated to a new facility. The congregation thereafter approved the church board’s request to borrow funds to purchase and improve a nearby apartment building. After the purchase, the apartment building caught fire and the church learned it did not have insurance on the building. The church also learned that church property was serving as collateral for the loan used to purchase the apartment building. At a congregational meeting, the pastor made a presentation to the congregation providing the reasons he believed the board members should be removed from office.

The dismissed board members (the “plaintiffs”) sued the pastor and church for negligence, and the pastor for defamation and emotional distress. The plaintiffs alleged that at the congregational meeting, the pastor told the congregation that the plaintiffs had placed a $300,000 mortgage on the church property to purchase some nearby apartments without his knowledge and failed to insure them. They asserted that the pastor also informed the congregation that they had mismanaged money and money was missing from the church. They further alleged that the pastor informed the congregation that he had been constantly deceived by the plaintiffs and that they should be removed from the board. A trial court dismissed the lawsuit, and the plaintiffs appealed.

The appeals court began its opinion by noting that when resolving church disputes, most courts apply the “neutral principles of law approach.” Under this approach: “(1) courts may not engage in resolving disputes as to religious law, principle, doctrine, discipline, custom, or administration; (2) courts cannot avoid adjudicating rights growing out of civil law; [and] (3) in resolving such civil law disputes, courts must accept as final and binding the decisions of the highest religious judicatories as to religious law, principle, doctrine, discipline, custom, and administration.”

The court concluded that the plaintiffs’ defamation claim could be resolved using legal principles without examining any religious questions, and, “because the trial court can completely resolve a church dispute on neutral principles of law, the First Amendment commands it to do so.” It stressed that the trial court “would not need to look at the church’s beliefs to determine if the statements constitute defamation. Accordingly, the trial court erred in dismissing the defamation cause of action. Therefore, the dismissal of the defamation action should be reversed and the action remanded for trial.” The court noted that courts in other states had refused to resolve defamation claims involving church leaders, but concluded that those courts “could not determine if the claim was defamation without looking into the churches’ beliefs.”

The court agreed with the pastor and church that the plaintiffs’ negligence claim had to be dismissed since it could not be resolved without delving into church doctrine. It noted that the plaintiffs alleged that the church had been negligent in hiring the pastor and not conducting its own investigation into the facts before the congregational meeting was held. The negligence claim against the pastor alleged that he was negligent in asking the congregation to remove the members of the board and in not conducting his own investigation of the facts before the meeting was held. The court concluded: “All of these allegations involve the administrative procedures of the church which … courts cannot examine.”

What This Means for Churches:

This case illustrates the view of some courts that the First Amendment does not prohibit the civil courts from resolving defamation claims against churches and church leaders so long as such claims can be resolved solely on the basis of neutral principle of law without reference to church doctrine or polity.

There is another interesting aspect of this case that should be noted. The plaintiffs relied upon the minutes of the congregational meeting in supporting their claim of defamation. The minutes taken at the congregational meeting reflect that the pastor stated “the church had been mortgaged and there was no insurance on the buildings that had been purchased,” a $300,000 mortgage he did not know about had been placed on the church building, and he had been “constantly deceived throughout.” This illustrates the importance of using care in drafting minutes of membership or board meetings to ensure that statements are not being recorded that can be used against the church in subsequent litigation. Banks v. St. Matthew Baptist Church, 706 S.E.2d 30 (S.C. App. 2011).

This Recent Development first appeared in Church Law and Tax Report, March/April 2012.

Employee Injured While Commuting to Work

Does workers’ compensation apply?

Church Law & Tax Report

Employee Injured While Commuting to Work

Does workers’ compensation apply?

Key point 8-07.2. All states have enacted workers compensation laws to provide benefits to employees who are injured or become ill in the course of their employment. Benefits generally are financed through insurance premiums paid by employers. Churches are subject to workers compensation laws in most states.

A federal appeals court ruled that an employee was not engaged in work-related activities while commuting, even though she was taking her employer’s computer backup computer disks home for safekeeping, and therefore she was not eligible for workers’ compensation benefits as a result of injuries she sustained in an accident. Workers’ compensation laws have been enacted in all 50 states. These laws provide compensation to employees as a result of job-related injuries and illnesses. The amount of compensation is determined by law and generally is based upon the nature and extent of the employee’s disability. In exchange for such benefits, employees give up the right to sue an employer directly. Fault is irrelevant under workers’ compensation laws. The only inquiries are (1) did an employment relationship exist; (2) did the injury occur during the course of employment; and (3) what were the nature and extent of the injuries? Typically, employers purchase insurance to cover the costs of workers’ compensation benefits.

A question that sometimes arises is the application of workers’ compensation laws to employee injuries that occur when an employee is commuting to or from work. Consider a recent case. An employee of a law firm was responsible for taking the firm’s backup computer disk home each workday for safekeeping. She also regularly did some work at home for the firm. One evening, after working a full day on the job, the employee was severely injured in an auto accident. She later filed for benefits under the firm’s workers’ compensation insurance policy.

The insurer initially denied the employee’s workers’ compensation claim on the ground that her injury did not occur during the course of employment. The employee thereafter sued the insurer for its “bad faith” in rejecting her claim.

A federal appeals court dismissed the employee’s bad faith claim on the basis of the so-called “dual purpose” test, which it defined as follows: “If the work assignment made the travel necessary, the worker is in the scope of employment, but if the trip would have occurred anyway, the travel is personal and not in the scope of employment. The fact that the employee had finished her normal workday, and was heading home, provided an arguable basis for the application of the dual purpose test,” precluding the employee’s bad faith claim.

What This Means For Churches:

A number of legal and tax issues are associated with commuting. These include: (1) is an injury to an employee compensable under workers’ compensation; (2) is the church liable for injuries caused by an employee in the process of commuting to or from work; (3) is a church required to compensate employees (including overtime pay, if applicable), for time spent commuting; (4) are transportation expenses incurred while commuting a business expense that is deductible on the employee’s income tax return, or is that reimbursable by the church under an accountable reimbursement plan? The answer to these questions may depend on whether the employee is engaged in work-related activities while commuting.

This case illustrates an important point. Church employees who are asked to perform a work-related task while commuting to or from work, and who are injured during their commute, are not necessarily in the “course of employment”—and as a result may not be covered by the church’s workers’ compensation policy. Work-related tasks include taking items home for safekeeping, but may also include using a cell phone for work-related business if allowed by law. This case suggests that employees are not engaged in their employment when commuting, regardless of what work related duties they may be performing, since they would have to commute whether engaged in work-related activities or not. Hill v. State Farm Insurance, 2011 WL 1304908 (5th Cir. 2011).

This Recent Development first appeared in Church Law and Tax Report, March/April 2012.

Minister’s Authority to Replace Trustees Involves Ecclesiastical Law

Civil courts must defer to churches and their own ecclesiastical organizations

Can a civil court determine which of two warring factions of church trustees rightfully holds office?

No, ruled a Pennsylvania appeals court. A minister in a local church had ousted several trustees from office, replacing them with new trustees more loyal to himself. The ousted trustees alleged that the minister lacked the authority to replace them, and that they accordingly were still the lawful church board.

The court, noting that civil courts must "defer" to churches and their own ecclesiastical organizations regarding any question of "discipline, faith, ecclesiastical rule, custom, or law," held that the question of a minister's authority to replace church trustees involves ecclesiastical law and therefore must be resolved by the church itself. It ordered the trial court to identify the highest body within the church empowered to decide the issue. Atterberry v. Smith, 522 A.2d 683 (Pa. App. 1987).

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