A federal court in Louisiana ruled that an employee of a church school was required to have her sex discrimination and sexual harassment claims resolved through binding arbitration rather than litigation.

From Pastor, Church & Law Key point 10-16.8. Churches have various defenses available to them if they are sued as a result of a personal injury. One such defense is an arbitration policy. By adopting an arbitration policy, a church can compel members to arbitrate specified disputes with their church rather than pursue their claim in the civil courts.

The Case

A federal court in Louisiana ruled that an employee of a church school was required to have her sex discrimination and sexual harassment claims resolved through binding arbitration rather than litigation as a result of an arbitration clause in her employment contract.

A woman ("Jill") was hired by a church school, and signed an employment contract specifying that "any claim or dispute arising out of, or related to, [the contract] or to any aspect of the employment relationship" was to be submitted to binding arbitration. A few years after being hired, Jill filed a lawsuit against her employer in which she alleged sex discrimination, sexual harassment, and breach of contract.

The church school filed a motion asking the court to compel Jill to submit her claims to binding arbitration, pursuant to the employment contract. The court agreed with the school, and ordered Jill to arbitrate her claims.

It based its decision on the Federal Arbitration Act ("FAA"). The FAA was enacted in 1925 as a response to the hostility of American courts to the enforcement of arbitration agreements. To give effect to this purpose, the FAA compels judicial enforcement of a wide range of written arbitration agreements. The FAA specifies that

a written provision in any maritime transaction or a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction, or the refusal to perform the whole or any part thereof, or an agreement in writing to submit to arbitration an existing controversy arising out of such a contract, transaction, or refusal, shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.

The FAA excludes from coverage "contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce." As a result, arbitration cannot be mandated in employment contracts for these workers.

But does this exemption apply only to employment contracts of seamen, railroad employees, and other "transportation" employees, or does it apply to the employment contracts of all employees regardless of their occupation?

In a landmark 2001 case, the United States Supreme Court ruled that this exemption applied only to employment contracts of transportation workers, and not other employment contracts. Circuit City Stores, Inc. v. Adams, 121 S.Ct. 1302 (2001). As a result, the Louisiana federal court ruled that the FAA compelled Jill to arbitrate her claims.


The Supreme Court's decision in the Circuit City case is addressed in a feature article in the July-August 2001 issue of this newsletter. The Louisiana case represents the first time that a court has applied the FAA to an employment contract involving an employee of a church or church school. Church leaders should review the previous article in this newsletter in order to evaluate the desirability of inserting arbitration clauses in employment contracts. Prescott v. North Lake Christian School, 2001 WL 740506 (E.D. La. 2001).

This content is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold 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. "From a Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations." Due to the nature of the U.S. legal system, laws and regulations constantly change. The editors encourage readers to carefully search the site for all content related to the topic of interest and consult qualified local counsel to verify the status of specific statutes, laws, regulations, and precedential court holdings.

ajax-loader-largecaret-downcloseHamburger Menuicon_amazonApple PodcastsBio Iconicon_cards_grid_caretChild Abuse Reporting Laws by State IconChurchSalary Iconicon_facebookGoogle Podcastsicon_instagramLegal Library IconLegal Library Iconicon_linkedinLock IconMegaphone IconOnline Learning IconPodcast IconRecent Legal Developments IconRecommended Reading IconRSS IconSubmiticon_select-arrowSpotify IconAlaska State MapAlabama State MapArkansas State MapArizona State MapCalifornia State MapColorado State MapConnecticut State MapWashington DC State MapDelaware State MapFederal MapFlorida State MapGeorgia State MapHawaii State MapIowa State MapIdaho State MapIllinois State MapIndiana State MapKansas State MapKentucky State MapLouisiana State MapMassachusetts State MapMaryland State MapMaine State MapMichigan State MapMinnesota State MapMissouri State MapMississippi State MapMontana State MapMulti State MapNorth Carolina State MapNorth Dakota State MapNebraska State MapNew Hampshire State MapNew Jersey State MapNew Mexico IconNevada State MapNew York State MapOhio State MapOklahoma State MapOregon State MapPennsylvania State MapRhode Island State MapSouth Carolina State MapSouth Dakota State MapTennessee State MapTexas State MapUtah State MapVirginia State MapVermont State MapWashington State MapWisconsin State MapWest Virginia State MapWyoming State IconShopping Cart IconTax Calendar Iconicon_twitteryoutubepauseplay