Religious Discrimination in Employment Practices

Religious organizations are exempt from bans on religious discrimination.

Richard R. Hammar, Attorney, CPA

Bio

State: Oklahoma
Categories: Employment Practices

Church Law & Tax Report

Religious Discrimination in Employment Practices

Religious organizations are exempt from bans on religious discrimination.

Richard R. Hammar, J.D., LL.M., CPA

Key point 8-10.2. Some courts have not recognized the ministerial exception, usually because the complainant was not a minister in either status or function, or was employed by a secular organization.

Key point 8-11. Employees and applicants for employment who believe that an employer has violated a federal civil rights law must pursue their claim according to a specific procedure. Failure to do so will result in the dismissal of their claim.

Key point 8-12.1. Title VII of the Civil Rights Act of 1964 prohibits employers engaged in commerce and having at least 15 employees from discriminating in any employment decision on the basis of race, color, national origin, gender, or religion. Religious organizations are exempt from the ban on religious discrimination, but not from the other prohibited forms of discrimination.

Key point 8-13. The federal Age Discrimination in Employment Act prohibits employers with 20 or more employees, and engaged in interstate commerce, from discriminating in any employment decision on the basis of the age of an employee or applicant for employment who is 40 years of age or older. The Act does not exempt religious organizations. Many states have similar laws that often apply to employers having fewer than twenty employees.

A federal district court in Oklahoma ruled that a Roman Catholic parochial school was exempt from Title VII’s ban on religious discrimination in employment decisions; that the “ministerial exception” did not apply to a teacher employed by the parochial school; and, that the school did not violate age discrimination law in not renewing her contract. A parochial school employed a teacher (the “plaintiff”) for a one-year, renewable contract. Her contract was renewed each year for 10 years. During the 10th year, the school informed the plaintiff that her contract would not be renewed. She was 63 years old at that time. The plaintiff sued the school and church (the “defendants”) for unlawful employment discrimination based on religion and age.

religious discrimination

The plaintiff asserted that the defendants terminated her because she was an Episcopalian, and not a Catholic, in violation of the ban on religious discrimination under Title VII of the Civil Rights Act of 1964. The defendants noted that Title VII exempts religious organizations from the ban on religious discrimination in employment. Title VII provides: “This subchapter shall not apply … to a religious corporation, association, educational institution, or society with respect to the employment of individuals of a particular religion to perform work connected with the carrying on by such corporation, association, educational institution, or society of its activities.”

The court dismissed the plaintiff’s religious discrimination claim based on Title VII’s exemption of religious organizations from the ban on religious discrimination. It observed: “Because the exemption applies to employees with religious or secular duties, the court need not determine whether [the plaintiff’s] duties were religious.”

The court also rejected the plaintiff’s argument that the defendant school was not a “religious” organization. It quoted from a 2007 federal appeals court decision:

Over the years, courts have looked at the following factors [in determining if an employer qualifies as a religious organization]: (1) whether the entity operates for a profit, (2) whether it produces a secular product, (3) whether the entity’s articles of incorporation or other pertinent documents state a religious purpose, (4) whether it is owned, affiliated with or financially supported by a formally religious entity such as a church or synagogue, (5) whether a formally religious entity participates in the management, for instance by having representatives on the board of trustees, (6) whether the entity holds itself out to the public as secular or sectarian, (7) whether the entity regularly includes prayer or other forms of worship in its activities, (8) whether it includes religious instruction in its curriculum, to the extent it is an educational institution, and (9) whether its membership is made up by coreligionists …. Not all factors will be relevant in all cases, and the weight given each factor may vary from case to case. LeBoon v. Lancaster Jewish Community Center, 503 F.3d 217 (3rd Cir.2007).

The court concluded that the defendant school was a religious organization under this test. It noted that the school was operated by a church organized under the Canon Law of the Roman Catholic Church; that the school taught many secular subjects, but also required religious instruction for all students; that the church’s pastor supervises some school decisions, such as whether or not to renew teachers’ contracts; and the school’s student handbook describes the school as “first and foremost a Catholic school [that] embraces the Catholic traditions of mass, personal prayer and stewardship.”

the ministerial exception

The court rejected the defendants’ claim that the plaintiff’s entire case had to be dismissed as a result of the “ministerial exception,” which bars civil courts from interfering with employment disputes between churches and ministers. While the United States Supreme Court affirmed the ministerial exception earlier this year (see the Feature Article in the March/April 2012 edition of CHURCH LAW & TAX REPORT), it left undefined the term “minister.”

The federal court in Oklahoma concluded that the plaintiff, a fifth-grade teacher in a parochial school, was not a minister for purposes of the ministerial exception. The court applied the most commonly used definition of “minister” in applying the ministerial exception: “As a general rule, if the employee’s primary duties consist of teaching, spreading the faith, church governance, supervision of a religious order, or supervision or participation in religious ritual and worship, he or she should be considered ‘clergy.'” Rayburn v. Gen. Conf. of Seventh-Day Adventists, 772 F.2d 1164 (4th Cir.1985).

The court noted that several courts have concluded that the ministerial exception applies to principals of parochial schools. But, on the other hand, “the overwhelming majority of courts that have considered the issue have held that parochial school teachers … who teach primarily secular subjects, do not classify as ministerial employees for purposes of the exception.”

The court added:

It is difficult to conceive that [the plaintiff] might properly be classified as a minister of the Catholic faith when she is not even a member of that faith.” Further, “although her teaching contract required her to teach and act in accordance with the precepts of the Catholic Church and aid in the Christian formation of students, defendants have not articulated specific responsibilities or actions that might be considered ministerial …. [Her] position as a teacher of secular subjects [does not] qualify her for the ministerial exception. She did not teach religion or lead the students in prayer, and she is not Catholic.

age discrimination

The court rejected the plaintiff’s age discrimination claim on the basis of five performance-related incidents that formed the basis for nonrenewal of her teaching contract. Generally, if an employer in an employment discrimination case is able to articulate a nondiscriminatory reason for an adverse employment decision, the burden of proof shifts to the employee to prove that the employer’s reason was “pretextual.” An employee generally shows pretext with evidence that the employer’s stated reason for the adverse employment action was false. The court concluded that the plaintiff had failed to produce any evidence that the defendants’ nondiscriminatory basis for not renewing her contract was pretextual.

The court also noted that the school’s decision not to renew the plaintiff’s contract “benefits from a strong inference that the decision was not pretextual under the ‘same actor’ inference.” It explained: “Where the employee was hired and fired by the same person within a relatively short time span, there is a strong inference that the employer’s stated reason for acting against the employee is not pretextual …. The same actor inference has been applied when the hiring and firing occurred up to four years apart.” The court noted that the parish priest had signed some of the plaintiff’s recent contracts, and also made the final decision to terminate. Since these two acts were relatively close in proximity, a “strong inference” arose that the defendants’ nondiscriminatory reason for not renewing the contract was not pretextual.

What This Means For Churches:

This case is important for the following reasons:

1. Many church leaders are unaware that Title VII’s ban on religious discrimination in employment decisions applies to both religious and “secular” positions in a church. This court explicitly acknowledged that the church and school were allowed to discriminate on the basis of religion in terminating the plaintiff, even if her position as a teacher was deemed to be “secular.”

2. Title VII’s exemption of religious employers from the ban on religious discrimination in employment decisions applies to “a religious corporation, association, educational institution, or society with respect to the employment of individuals of a particular religion to perform work connected with the carrying on by such corporation, association, educational institution, or society of its activities.” The court provided an excellent nine-factor test to be used in deciding if an employer is a religious employer exempt from the ban on religious discrimination.

3. Only employers with at least 15 employees, and engaged in interstate commerce, are subject to Title VII. Most churches have fewer than 15 employees, and are not covered by Title VII. However, most states have enacted employment discrimination laws that are more likely to apply to churches since they have no interstate commerce requirement and often apply to employers with fewer than 15 employees.

4. The court applied the so-called “same actor” inference. This principle, which has been applied by many courts, raises an inference that if the same person makes an adverse employment decision soon after (up to four years, according to one court) a decision to hire the person, an allegedly nondiscriminatory reason for the adverse decision is not pretextual. This is an important inference for church leaders to bear in mind. However, note that the court cautioned that “the same actor evidence gives rise to an inference, rather than a presumption, that no discriminatory animus motivated the employer’s actions.” Braun v. St. Pius X Parish, 2011 WL 5086362 (N.D. Okla.2011).

This Recent Development first appeared in Church Law and Tax Report, September/October 2012.

Legal Developments

The Guinn Case

In 1989, the Oklahoma Supreme Court issued a ruling that remains the definitive analysis on

Richard R. Hammar, Attorney, CPA

Bio

State: Oklahoma
Categories: Church Membership - Discipline and Removal

In 1989, the Oklahoma Supreme Court issued a ruling that remains the definitive analysis on the discipline of church members. Guinn v. Church of Christ, 775 P.2d 766 (Okla. 1989). The court reached the following conclusions:

The discipline of church members (i.e., persons who have not withdrawn from membership) is a constitutionally protected right of churches.
Discipline of persons who have effectively withdrawn their church membership is not a constitutionally protected activity, and churches that engage in such conduct can be sued under existing theories of tort law.
The constitutional right of a church member to withdraw from church membership is protected by the First Amendment guaranty of religious freedom unless a member has waived that right. A church wishing to restrict the right of disciplined members to withdraw must obtain a voluntary and knowing waiver by present and prospective members of their constitutional right to withdraw. How can this be done? One approach would be for a church to adopt a provision in its bylaws preventing members from withdrawing if they are currently being disciplined by the church. Obviously, the disciplinary procedure must be carefully specified in the church bylaws so there is no doubt whether the disciplinary process has been initiated with respect to a member. Most courts have held that members are "on notice" of all of the provisions in the church bylaws, and consent to be bound by them when they become members. As a result, the act of becoming a member of a church with such a provision in its bylaws may well constitute an effective waiver of a member's right to withdraw (if the disciplinary process has begun).

Legal Developments

Church Liability for Sexual Harassment

A federal court in Oklahoma ruled that a church was not liable on the basis of sexual harassment for the conduct of a minister.

Richard R. Hammar, Attorney, CPA

Bio

State: Oklahoma
Categories: Denominations - Legal Liability, Sexual Harassment, Sexual Misconduct by Clergy, Lay Employees, and Volunteers

Church Law & Tax Report

Church Liability for Sexual Harassment

A federal court in Oklahoma ruled that a church was not liable on the basis of sexual harassment for the conduct of a minister.

Richard R. Hammar, J.D., LL.M., CPA

Key point 8-08.2. Sexual harassment is a form of sex discrimination prohibited by Title VII of the Civil Rights Act of 1964. It consists of both “quid pro quo” harassment and “hostile environment” harassment. Religious organizations that are subject to Title VII are covered by this prohibition. An employer is automatically liable for supervisory employees’ acts of harassment, but a defense is available to claims of hostile environment harassment if they have adopted a written harassment policy and an alleged victim fails to pursue remedies available under the policy. In some cases, an employer may be liable for acts of sexual harassment committed by non-supervisory employees, and even non-employees.

* A federal court in Oklahoma ruled that a church was not liable on the basis of sexual harassment for the conduct of a minister. A woman (Karen) was employed as an administrative assistant at a regional denominational office. Her supervisor was one of the regional church’s officers. Karen sued the regional church for unlawful sexual harassment based on the following conduct of her supervisor: (1) Karen claimed that her supervisor offered to boost her husband’s compensation if she would “cooperate” with him, which she interpreted to mean a sexual relationship. Her husband was a pastor of a local church affiliated with the regional church. (2) Karen alleged that on another occasion her supervisor blocked her path by standing in a doorway, and began rubbing her shoulders while saying that “I’m sorry it has to be this way.” (3) She further alleged that her supervisor continued to sexually harass her for the next few months by brushing against her as he took things from her or handed them to her. Karen’s supervisor terminated her, and she sued the supervisor and regional church for sexual harassment.
Title VII of the Civil Rights Act of 1964 prohibits discrimination in employment on the basis of several grounds, including sex. Sex discrimination includes sexual harassment. Title VII applies to any employer engaged in commerce and having at least 15 employees. There are two kinds of sexual harassment under Title VII: (1) “hostile work environment” harassment, which consists of offensive conduct of a sexual nature that is severe or pervasive; or (2) “quid pro quo” harassment, which “occurs when submission to sexual conduct is made a condition of employment benefits.” Karen claimed that she was subjected to both forms of harassment.

Hostile environment

The court noted that for the regional church to be liable for the supervisor’s “hostile environment” sexual harassment, Karen had to show that “the workplace was permeated with discriminatory intimidation, ridicule and insult, that was sufficiently severe or pervasive to alter the conditions of her employment and create an abusive working environment.” The court quoted from a Supreme Court decision:

A sexually objectionable environment must be both objectively and subjectively offensive, one that a reasonable person would find hostile and abusive, and one that the victim in fact did perceive to be so …. Simple teasing, offhand comments and isolated incidents (unless extremely serious) will not amount to discriminatory changes in the terms and conditions of employment. Faragher v. City of Boca Raton, 524 U.S. 775 (1998).

The court concluded that Karen failed to show that the conduct of her supervisor was “so extreme as to change the terms and conditions of her employment.” It concluded, “While no woman should be made to feel uncomfortable in the workplace by virtue of a male supervisor leaning into her and brushing against her, because Karen can point to only two incidents, her work environment cannot be perceived as being pervaded by hostility toward women. Consequently, there is insufficient evidence to support a hostile work environment claim.”

Quid pro quo

The essence of quid pro quo harassment is that “job benefits are conditioned on an employee’s submission to conduct of a sexual nature and that adverse job consequences result from the employee’s refusal to submit to the conduct.” Karen argued that her supervisor’s invitation to prevent financial harm to her family in exchange for sexual favors amounted to quid pro quo harassment in violation of Title VII. Once again, the court disagreed, noting that Title VII makes it unlawful for a covered employer to discriminate on the basis of sex against any individual with respect to his [or her] compensation, terms, conditions, or privileges of employment.” The court concluded that “the plain text of Title VII requires that the person whose employment conditions are adversely affected also be the person who is discriminated against on the basis of sex.” Bolin v. Oklahoma Conference, 397 F.Supp.2d 1293 (D. Okla. 2005).

Legal Developments

Defamation and Church Clergy

A church’s protection from defamation lawsuits.

Richard R. Hammar, Attorney, CPA

Bio

State: Oklahoma
Categories: Clergy - Removal, Defamation

Church Law & Tax Report

Defamation and Church Clergy

A church’s protection from defamation lawsuits.

Richard R. Hammar, J.D., LL.M., CPA

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 10-15. The First Amendment limits, but does not eliminate, a church’s liability for defamation.

* An Oklahoma court ruled that the First Amendment guaranty of religious liberty, as well as the concept of “qualified privilege,” protected a church from being sued for defamation as a result of the senior pastor’s statement to a church member that a former youth pastor had been dismissed because he had been “questioning his sexuality.” A church board voted to dismiss the church’s youth pastor (Pastor Eric). Pastor Eric later sued the senior pastor of the church, and the church and a regional church, for defamation based on the senior pastor’s statement to members of the church and local community that Pastor Eric had been dismissed because he was “questioning his sexuality.” Pastor Eric claimed that these statements constituted slander, and he asked the court to award him both actual and punitive damages. The church defendants insisted that the pastor’s alleged statement was made to only one person (a church member), and concerned the discipline of a youth pastor, and therefore was shielded from liability by the First Amendment guaranty of religious freedom as well as the “qualified privilege” that protects statements of “common interest” that are shared between church members.

Pastor Eric pointed to minutes of a church board meeting indicating that he had been fired for violating church policy in the conduct and financing of youth activities, and therefore the pastor’s subsequent statements regarding his sexuality did not concern the imposition of discipline for violation of any ecclesiastical doctrine of the church and were not protected by the First Amendment. In addition, Pastor Eric alleged that the senior pastor’s statement regarding his sexuality was made to a church member in the presence of two other church members. A trial court dismissed the lawsuit, concluding that the senior pastor’s statement was made “to a church member about a terminated staff member, who was also a church member; accordingly, the alleged statement is constitutionally protected.” Pastor Eric appealed.

First Amendment

A state appeals court began its opinion by defining defamation as a false statement about another that is communicated to other persons. It noted that the First Amendment to the United States Constitution “guarantees a church the right, without fear of judicial interference, to impose on its members discipline for breach of ecclesiastical doctrine so long as the member remains a member of the church.” Consequently, “the First Amendment will protect and shield the religious body from liability for the activities carried on pursuant to the exercise of church discipline,” and “within the context of ecclesiastical discipline, churches enjoy an absolute privilege from scrutiny by the secular authority.”

The court rejected Pastor Eric’s claim that the First Amendment offers no protection to defamatory statements unrelated to church discipline. It observed, “The statement of which plaintiff complained related to the ostensible reason for his termination, conveyed from the pastor to a member of the congregation concerning the conduct of another member. At least one court has specifically held that statements by and between church members relating to the church’s reasons and motives for terminating a person’s membership require an impermissible inquiry into church disciplinary matters,” and that the First Amendment “precludes a member’s defamation claim which clearly involves an internal conflict within the church. We are persuaded that examination of [the senior pastor’s] statement in the present case likewise requires an impermissible inquiry into church disciplinary matters, barred by the First Amendment.”

Qualified privilege

The court concluded that the church defendants also were protected by a qualified privilege, which it defined as follows:

A church or other religious organization ordinarily bears no tort liability for statements by or between church officers or members concerning the conduct of other officers or members, because communications between members of a religious organization concerning the conduct of other members or officers in their capacity as such are qualifiedly privileged as matters affecting a common interest or purpose. This is especially so where the publication is made in response to a request rather than volunteered by the publisher. So, where the alleged defamatory statements are exchanged by or between members of the congregation during or as result of either a church’s decision to employ, retain or terminate a clergyman or lay employee, or a church’s review of the performance of a clergyman or lay employee, the conditional privilege shields the church from liability for defamation.

A qualified privilege is “qualified” in the sense that it will not apply if the person making an allegedly defamatory statement does so with “malice.” In this context, malice means either a knowledge that the statement was false, or a reckless disregard as to its truthfulness.

The court quoted with approval from a 1929 decision by the New Hampshire Supreme Court:

The idea that the conduct of a minister should be mentioned unfavorably only at church meetings, or before tribunals having authority in the premises, suggests an undesirable departure from the usual course of events …. Individual church members are not accustomed to bring the various items of gossip which may be in circulation about the minister to the attention of the governing boards of the church, nor is it desirable that they should do so …. Instances in which charges are presented and heard by the constituted church authorities evidence the culmination of considerable periods of private discussion amongst the members of the congregations involved. Any rule designed to penalize the formation of public sentiment in such cases by arresting the preliminary sifting of reports through private discussion, free from the taint of malice and for a proper purpose, is without justification and would be foredoomed to practical failure as an attempt to decree that men and women shall not act like human beings. Slocinski v. Radwan, 144 A. 787 (1929)

The court noted that a church member had asked the senior pastor why Pastor Eric had been terminated, which amounted to a request for information “concerning [his] conduct or qualifications for office.” The allegedly defamatory statement occurred in the course of the pastor’s response to this inquiry, that is, “during an exchange between one member of the congregation and another member of the congregation concerning the acts of a third member of the congregation.” The court concluded that “the unconverted evidence thus demonstrates publication of the complained-of statement occurred on a conditionally privileged occasion, and the record contains no evidence even remotely suggesting the destruction of the conditional or qualified privilege by abuse or malice.”

Application. This case contains an excellent description of the qualified privilege. Church leaders should be familiar with this concept. Note, however, that in recent years some courts have limited the First Amendment and qualified privilege defenses to statements made about a staff member prior to his or her termination. This is an important qualification to bear in mind.

Also note that the minutes of the church board were cited by Pastor Eric as proof that he had been terminated for non-doctrinal reasons. This illustrates an important point. Church board members should recognize that the minutes of their meetings are accessible in the event of future litigation, and as a result they should be prepared with this possibility in mind. If in doubt, have a local attorney review minutes before they are formally approved. Trice v. Burress, 137 P.3d 1253 (Okla. App. 2006).

* See (1) “Defamation,” Trice v. Burress, 137 P.3d 1253 (Okla. App. 2006); (2) “Sexual misconduct by clergy, lay employees, and volunteers,” 2006 WL 1009283 (W.D. Wash. 2006), in the recent developments section of this newsletter.

Legal Developments

Recent Developments in Oklahoma Regarding Releases

An Oklahoma court ruled that a release signed by a skydiving student prevented him from suing a skydiving facility following an accident in which he was severely injured.

Richard R. Hammar, Attorney, CPA

Bio

State: Oklahoma

Key point. Release agreements are upheld by some courts, so long as they are signed by a competent adult and the agreement clearly specifies the risks and discloses that the signer is releasing all claims of liability for injuries associated with those risks.

1. An Oklahoma court ruled that a release signed by a skydiving student prevented him from suing a skydiving facility following an accident in which he was severely injured.

An adult male (the "victim") went to a skydiving facility to learn how to skydive. During six hours of training, he was also given a detailed "exculpatory contract" that released the facility from liability in the event of his injury or death. The contract also contained an "assumption of risk" provision. In addition, the victim was required to watch a video tape in which an attorney explained the terms of the contract. The victim read, signed, and initialed the contract in fourteen places. The release provided, in part:

I hereby release and discharge Paradise from any and all liability, claims, demands or causes of action that I may hereafter have for injuries or damages arising out of my participation in parachuting activities, even if caused by negligence or other fault of Paradise. I further agree that I WILL NOT SUE OR MAKE CLAIM against Paradise for damages or other losses sustained as a result of my participation in parachuting activities. I also agree to INDEMNIFY AND HOLD Paradise HARMLESS from all claims, judgements (sic) and costs, including but not limited to attorneys' fees, and to reimburse them for any expenses whatsoever incurred in connection with an action brought as a result of my participation in parachuting activities.

I understand and acknowledge that parachuting activities are inherently dangerous and I EXPRESSLY AND VOLUNTARILY ASSUME THE RISK OF DEATH OR OTHER PERSONAL INJURY SUSTAINED WHILE PARTICIPATING IN PARACHUTING ACTIVITIES WHETHER OR NOT CAUSED BY THE NEGLIGENCE OR OTHER FAULT of Paradise including but not limited to equipment malfunction from whatever cause, inadequate training, and deficiencies in the landing area, or any other fault of [Paradise].

The victim successfully completed a "static line" parachute jump. A few days later, on his third jump, the victim's main and reserve chutes malfunctioned, hurtling him into a pond. He later sued the skydiving facility, claiming that it had been negligent in failing to adequately train and monitor him. The facility pointed to the release and assumption of risk document as a defense against liability. A trial court found the facility liable, and it appealed.

A state appeals court noted exculpatory contracts (also called "releases") may be valid and enforceable, so long as "(1) the intent to excuse one party from the consequences of his or her own negligence is expressed in clear, definite and unambiguous language, (2) the agreement was made at arm's length with no vast disparity of bargaining power between the parties, and (3) the exculpation is not contrary to statute or public policy, such a waiver or release from liability is valid and enforceable." As noted below, the court concluded that each of these conditions was met by the document the victim signed.

Clear, Definite, and Unambiguous Language

The court concluded that the document signed by the victim met this requirement: "[The document] describes the nature and extent of damages [the facility] sought to avoid in language any layperson could understand, i.e., that parachuting was dangerous and could lead to death or injury, that participation therein was purely voluntary, that the risk of injury was assumed by [the victim] even if due to equipment malfunction from whatever cause, inadequate training, and deficiencies in the landing area, or any other fault of [the facility].

Equal Bargaining Power

The second requirement for the validity of a release agreement is that the parties signing the agreement have equal bargaining power. The court concluded that this condition was met. It noted that the victim was not required to use the one facility's services as opposed to going elsewhere, could have jumped without training, or could have chosen not to jump at all. Further, he was offered his money back if he did not want to jump and was offered the names of other skydiving training facilities.

Not Contrary to Public Policy

The third requirement for the validity of a release agreement is that it does not violate public policy. The court concluded that this requirement was met, noting that "although we know of no Oklahoma cases involving exculpatory contracts in the context of high risk sports activities such as sky diving, other jurisdictions which have addressed exculpatory contracts in this context have found no violation of public policy."

Application. This case illustrates three important points. First, release forms are not necessarily invalid. Some courts have recognized their legal validity provided that they meet certain conditions. The conditions set forth by the Oklahoma court are typical-the document must clearly and unambiguously specify the risks of an activity, and communicate to the signer that he or she is releasing the other party from all liability associated with those risks; the parties must have comparable bargaining power; and, the agreement must not violate public policy. Check with a local attorney for a review of your state law on this issue. In some states, the courts have questioned the validity of release forms when signed by adults as well as children, especially when they seek to release a church or other organization from liability associated with personal injuries.

Second, this case only addressed the validity of a release form signed by an adult. Several courts have ruled that such forms violate public policy when applied to minors. As a result, "release forms" signed by minors, or their parents, ordinarily will be of little if any value-particularly if they seek to release a church from liability for personal injuries to the minor.

Third, the court upheld the "assumption of risk" portion of the agreement. In this provision, the victim voluntarily assumed the known risks associated with skydiving. Many other courts have concluded that competent adults can assume the risks of their actions. This often happens in the context of short-term missions trips sponsored by a local congregation. Persons going on such trips often are exposed to a number of risks, especially if the trip is to a foreign country. These risks include death, illness, terrorism, and inadequate medical facilities. Adults who participate on such trips are allowed to assume these risks, so long as they do so in a document that clearly specifies the risks that are being assumed. If your church ever sponsors such a trip, you should consider the use of such a form. Once again, these forms will have little if any legal significance when applied to minors. Manning v. Brannon, 956 P.2d 156 (Okla. App. 1997), cert. denied, March 2, 1998. [Negligence as a Basis for Liability]

Legal Developments

Dismissed Church Members Sue

Civil courts are prohibited from intervening in the dismissal of members.

Richard R. Hammar, Attorney, CPA

Bio

State: Oklahoma

Church Law and Tax1994-01-01Recent Developments

Church Membership

Richard R. Hammar, J.D., LL.M., CPA

• Key point: The first amendment guaranty of religious freedom prevents civil courts from interfering with the discipline or dismissal of church members.

• The Oklahoma Supreme Court refused to resolve the claim of former church members that their dismissal was improper, and further refused to permit them to inspect church records or demand an accounting of church funds. Five members of a local church became concerned over the way their pastor and church board were conducting church business. Their concerns included the following: (1) church property was listed for sale without congregational approval; (2) some employees, including the pastor, received salary increases without church approval; (3) the pastor abused his church credit cards by allowing unauthorized persons to use them; (4) the board purchased vehicles without church approval; (5) church property was sold at below market value; and (6) church funds were used to pay for lavish travel and entertainment expenses, and personal items. The five members filed a lawsuit asking a civil court to issue an order giving them access to the church’s financial records. They also asked the court to prohibit the church from dismissing them as members. The five members were immediately dismissed by a unanimous vote of the church at a hastily called business meeting. The trial court later dismissed the lawsuit, and this ruling was affirmed by a state appeals court. The five former members appealed to the state supreme court, asking not only for access to church financial records but also for reinstatement as church members. The supreme court declined to reinstate the former members, and also refused to permit them to inspect the church’s financial records. The supreme court began its opinion by observing that “the courts will not interfere with the internal affairs of a religious organization except for the protection of civil or property rights.” The court concluded that “church membership” was not a “civil or property right” that a civil court could enforce: “A civil or property right that justifies the exercise of civil judicial power has long been distinguished from ecclesiastical or spiritual rights that civil courts do not adjudicate. Civil courts in this country recognize that they have no ecclesiastical jurisdiction, and church disciplinary decisions cannot be reviewed for the purpose of reinstating expelled church members.” This is true even if a church fails to follow its own constitution or bylaws in dismissing the members. “The issue of whether the church proceeding complied with church rules or custom in expelling members presents no question for our review on a claim for reinstatement,” the court concluded. The court quoted from an old Kentucky decision that frequently has been cited by other courts:

We cannot decide who ought to be members of the church, nor whether the excommunicated have been justly or unjustly, regularly or irregularly, cut off from the body of the church. We must take the fact of expulsion as conclusive proof that the persons expelled are not now members of the repudiating church; for, whether right or wrong, the act of excommunication must, as to the fact of membership, be law to this court. Shannon v. Frost, 42 Ky. 253 (1842).

The court acknowledged that a few courts have been willing to resolve the claims of dismissed church members, but it concluded that “we are strongly committed to the correctness of the decisions holding that church membership is within the ambit of ecclesiastical jurisdiction and outside that of the civil courts.”

The court also rejected the former members’ request to inspect the church’s financial records. The former members insisted that they needed access to these records to prove that church leaders diverted church funds to uses that were not authorized by the church. The court observed: “Some of their claims alleging diversion of church property to non-church uses may have been capable of invoking civil judicial relief, and some may not have been …. We need not, however, address the extent to which their claims were cognizable when they filed suit, because their expulsion mooted any claims they had as to the diversion of church property to non-church uses.” In other words, non-members no longer have “standing” to use the courts to protect their former church from an alleged diversion of funds to unauthorized uses. Only members can sue to protect church assets. The court rejected the former members’ claim that the right of inspection given to shareholders of for-profit corporations under state law applied to church members (whether current or former).

A concurring judge pointed out another reason for rejecting the former members’ claims—church members (whether current or former) can never have a “property” interest in their church or in church membership since their only contribution to the church is in the form of donations or gifts. By definition, a gift divests the donor of all interest in the donated funds or property. Fowler v. Bailey, 844 P.2d 141 (Okla. 1992).

© Copyright 1994, 1998 by Church Law & Tax Report. All rights reserved. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is provided with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. Church Law & Tax Report, PO Box 1098, Matthews, NC 28106. Reference Code: m19 m12 m08 c0194

Legal Developments

Discipline of Church Members

Churches’ membership decisions are protected by the First Amendment.

Richard R. Hammar, Attorney, CPA

Bio

State: Oklahoma
Categories: Freedom of Religion

Church Law and Tax 1992-11-01 Recent Developments

Taxation – Church Property

Richard R. Hammar, J.D., LL.M., CPA

• The Oklahoma Supreme Court has rendered its second ruling on the discipline of church members in three years. A church convened a disciplinary hearing to determine the membership status of two sisters accused of fornication. Neither sister attended, and neither sister withdrew her membership in the church. Following the hearing, both sisters received letters from the church informing them that their membership had been terminated. The sisters sued the church and its leaders, claiming that the church’s actions in delivering the termination letters and disclosing their contents “to the public” constituted defamation, intentional infliction of emotional distress, and invasion of privacy (public disclosure of private facts). A trial court dismissed the lawsuit, and the sisters appealed directly to the state supreme court which upheld the dismissal of the case. The court began its opinion by rejecting the sisters’ claim that the contents of the termination letters had been disclosed improperly to the public. This allegation was based entirely on a conversation between a church board member and another member of the church. The member asked the board member why the board was “going after” the sisters, and the board member replied that it was on account of “fornication.” The court concluded that this comment did not constitute a disclosure of the contents of the letters “to the public,” and accordingly there had been no defamation of invasion of privacy. In rejecting the sisters’ allegation of emotional distress, the court noted that the evidence “does not suggest that the lay leader’s conduct was so extreme and outrageous as to justify submission of the claim to the jury.” The court then addressed he sisters’ claim that the manner in which the church notified them of the results of the disciplinary proceeding was inappropriate. In rejecting this claim, the court observed: “The church court had proper ecclesiastical cognizance when the letters were delivered. The [sisters] had not withdrawn their membership at the time they received notice of their expulsion. Under the first amendment, the procedural norms which govern the exercise of ecclesiastical cognizance are not subject to a secular court’s scrutiny. The [trial] court was hence without any authority to assess the propriety of the notice given.” The court then proceeded to announce an absolute constitutional protection for the membership determinations of religious organizations (assuming that the disciplined member has not effectively withdrawn his or her membership):

[The relationship between a church and its members] may be severed freely by a member’s positive act at any time. Until it is so terminated, the church has authority to prescribe and follow disciplinary ordinances without fear of interference by the state. The first amendment will protect and shield the religious body from liability for the activities carried on pursuant to the exercise of church discipline. Within the context of church discipline, churches enjoy an absolute privilege from scrutiny by the secular authority.

This absolute privilege also extends to the implementation of the decision of the church regarding the discipline of a member, even though the implementation occurs after the member has been dismissed. However, the absolute privilege only applies to disciplinary actions taken by the church before a member withdraws from membership. The court explained the effect of a member’s withdrawal from membership as follows:

At the point when the church-member relationship is severed through an affirmative act of either a parishioner’s withdrawal or excommunication by the ecclesiastical body, a different situation arises. In the event of withdrawal or of post-excommunication activity … the absolute privilege from tort liability no longer attaches.

However, the court cautioned that “until an affirmative notification of membership withdrawal is received the church need not reassess the course of its legitimate ecclesiastical interest.”

The most astounding aspect of the court’s opinion was its conclusion that churches are immune from the civil “discovery” process with regard to their internal disciplinary proceedings. “Discovery” refers to the process of gathering evidence for civil trial, and includes depositions, interrogatories, and motions to produce documents. The court said that churches are immune from these discovery techniques with regard to internal membership disciplinary proceedings (so long as a member is being disciplined prior to withdrawal from membership). The court observed:

The free exercise [of religion] clause prohibits civil courts from inquiring into any phase of ecclesiastical decisionmaking—its merits as well as procedure. Internal ecclesiastical procedure need not meet any “constitutional concepts of due process.” This is so because the church’s judicature rests solely on consent which in turn is anchored on the [member’s] church affiliation. Because religious judicature is immune from any civil court inquest, it is also protected from intrusion by discovery …. Church judicature exercised within proper bounds of cognizance is notBecause religious judicature is immune from any civil court inquest, it is also protected from intrusion by discovery discoverable. Conversely, any activity outside of valid church judicature is not absolutely privileged and may be discoverable.

The court based this conclusion in part on the following statement of the United States Supreme Court in a 1944 decision: “[R]eligious activities which concern only members of the faith are and ought to be free—as nearly absolutely free as anything can be.” The court upheld the dismissal of the sisters’ lawsuit against the church, and their attempt to discover various church records in support of their claims. However, it did state that the sisters were free to engage in civil discovery of any church records concerning any inappropriate church actions or disclosures following their dismissal as members. Hadnot v. Shaw, 826 P.2d 978 (Okla. 1992).

Child Care

Church Law and Tax 1990-07-01 Recent Developments Child Care Richard R. Hammar, J.D., LL.M., CPA

Richard R. Hammar, Attorney, CPA

Bio

State: Oklahoma

Church Law and Tax 1990-07-01 Recent Developments

Child Care

Richard R. Hammar, J.D., LL.M., CPA

• Can a state close down a church-operated boys ranch that refuses to obtain a state license? Yes, ruled an Oklahoma state appeals court. A Baptist church operated the ranch as a ministry of the church, but it refused to obtain a state license on the ground that obtaining a license to operate a church ministry would violate the constitutional guaranty of religious freedom. A trial court rejected the church’s position, and ordered the ranch closed. A state appeals court agreed with this result. It noted that the state may regulate the activities of religious organizations in order to protect a compelling government interest, if it does so in the “least restrictive” manner reasonably possible. The court concluded that the state has “not only the right but the duty to protect its minor citizens” and that “the state must be particularly concerned with the welfare of the children in child care facilities where young children are completely controlled by and entirely dependent upon operators and employees for all of their needs.” In summary, the state had “a compelling interest in protecting the children in child care facilities such as [the church boys’ ranch],” and this interest “outweighs any burden imposed upon [the church] by the licensing requirements.” Finally, the court agreed with the state that licensing and regulation of child care facilities “are the least restrictive of the alternatives that the state could provide for the protection of children.” State ex rel. Roberts v. McDonald, 787 P.2d 466 (Okla. App. 1989).

© Copyright 1990, 1998 by Church Law & Tax Report. All rights reserved. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is provided with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. Church Law & Tax Report, PO Box 1098, Matthews, NC 28106. Reference Code: m11 c0590

Legal Developments

Personal Injuries – Part 2

On Church Property or During Church Activities

Richard R. Hammar, Attorney, CPA

Bio

State: Oklahoma

Church Law and Tax 1989-11-01 Recent Developments

Personal Injuries – On Church Property or During Church Activities

Richard R. Hammar, J.D., LL.M., CPA

• Are adult church members who attend a youth group camping trip as “chaperons” personally liable for the drowning death of one of the children? That was the issue before the Oklahoma Supreme Court. A Baptist church in Oklahoma sponsored an overnight outing for children in grades seven through twelve at a nearby park. The church’s youth minister, who was in charge of the event, secured 24 adult volunteers to act as chaperons during the trip. The children were allowed to swim in an area adjacent to the campsite that was not approved by park personnel. A 13-year-old boy who was not a member of the church attended the trip as a guest of a member. He was discovered missing during a lunch period, and a search for him began. A few hours later, his body was found during dragging operations in the swimming area. The boy’s parents filed a lawsuit against the church, the youth minister, and the 24 chaperons, claiming that the church and youth minister had been negligent in their selection of the site and that the chaperons had been negligent in failing to properly supervise the children. Just prior to trial, the parents reached an out-of-court settlement with the church and its youth minister, and they dismissed 14 of the chaperons from the lawsuit. The parents continued the lawsuit against the remaining 10 chaperons, and sued them in their individual capacities rather than as agents or representatives of the church. A state trial court ruled in favor of the chaperons, but an appeals court ruled in favor of the parents. The 10 chaperons asked the state supreme court to dismiss them from the lawsuit on the ground that they could not be personally liable for the boy’s death since they were acting as agents of the church at the time of the accident. The court conceded that “it is a well established principle that in order to recover damages for wrongful death alleged to have been caused by negligence, the plaintiff must establish that the defendant failed to exercise proper care in the performance of some legal duty owed to the decedent and that the negligent breach of this duty was the proximate cause of death.” The court concluded that each of the 10 chaperons had “assumed chaperon responsibilities as an agent of the church, not in their [sic] individual capacity. If defendants owed a duty to [the drowning victim] it was as agents of the church, not as individuals.” Accordingly, the court dismissed the lawsuit against the 10 chaperons since “all evidence indicates that [they] were acting as agents of the church” and that none of the evidence “indicates that [they] were operating outside their agency relationship with the church or that [they] assumed a duty to [the victim] as individuals.” Since the 10 chaperons had no duty to exercise care with respect to the victim other than as agents of the church, they could not be personally responsible (as individuals rather than as agents of the church) for the victim’s death. Therefore, the lawsuit, which sought to hold the chaperons personally liable, had to be dismissed. Walker v. Mathews, 775 P.2d 273 (Okla. 1989).

© Copyright 1989, 1998 by Church Law & Tax Report. All rights reserved. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is provided with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. Church Law & Tax Report, PO Box 1098, Matthews, NC 28106. Reference Code: m58 m79 c0689

Legal Developments

Court Ruled That a Nursing Home Operated by the Baptist Health Care Corporation Was Exempt from Real Estate Taxes

In a property tax case, the Oklahoma Supreme Court ruled that a nursing home operated

Richard R. Hammar, Attorney, CPA

Bio

State: Oklahoma
Categories: Tax Exemption

In a property tax case, the Oklahoma Supreme Court ruled that a nursing home operated by the Baptist Health Care Corporation was exempt from county real estate taxes. The facility was built and is operated as a statewide ministry to the elderly. Revenues from residents do not cover expenses incurred in operating the facility, and contributions from Baptist churches are used to cover the deficit.

The court applied a 7-part test in determining whether a retirement facility qualifies for property tax exemption as a charitable institution: (1) whether rent receipts are applied to upkeep, maintenance and equipment of the institution or are otherwise applied; (2) whether residents receive the same treatment regardless of their ability to pay; (3) whether the facilities are open to all, regardless of their ability to pay; (3) whether the facilities are open to all, regardless of race, creed, color, religion or ability to pay; (4) whether charges are made to all patients and, if made, are lesser charges made to the poor or are any charges made to the indigent; (5) whether there is a charitable trust fund created by benevolent and charitably minded persons for the needy or are donations made for the use of such persons; (6) whether the institution operated without a profit or private advantage to its founders and officials in charge; (7) whether the articles or bylaws of the corporation make provision for the disposition of surplus assets upon dissolution.

The court concluded that the facility in question met all seven criteria, and accordingly was exempt. Baptist Health Care Corporation v. Okmulgee County Board of Equalization, 750 P.2d 127 (Okla. 1988)