Clergy Removal – Part 1

An Indiana court ruled that a lawsuit brought by a dismissed pastor against his former church was barred by the first amendment guaranty of religious freedom.

Church Law and Tax 2003-09-01

Clergy Removal – Part 1

Key point 2-04.1. Most courts have concluded that they are barred by the first amendment guarantees of religious freedom and nonestablishment of religion from resolving challenges by dismissed clergy to the legal validity of their dismissals.

* An Indiana court ruled that a lawsuit brought by a dismissed pastor against his former church was barred by the first amendment guaranty of religious freedom, and by the fact that the pastor’s acceptance of a 90-day severance check amounted to an “accord and satisfaction” of the pastor’s claims. A pastor (“Pastor Tim”) entered into an employment contract with a church for a 3-year term. The contract specified that Pastor Tim was to work “under the oversight of the eldership and with the leadership of the church,” and would perform duties as assigned by the elders. Less than a year after beginning his duties, the church elders terminated Pastor Tim’s employment on the ground that he had attempted to “usurp” the elders’ spiritual authority “by accusing them of allowing the spread of false doctrine and then calling on them to be removed.” The elders determined that Pastor Tim would receive 90 days severance pay.

Pastor Tim sued the church for breach of his employment contract. He claimed that the contract contained no termination provision and therefore the church was obligated to pay his salary for the full 3-year term of employment. The church asserted that the court was barred by the first amendment guaranty of religious freedom from resolving the lawsuit, and that Pastor Tim’s cashing of the 90-day severance check amount to an “accord and satisfaction” of all claims against the church. A trial court agreed with the church, and Pastor Tim appealed.

The appeals court began its opinion by noting that the first amendment “requires civil courts to refrain from interfering in matters of church discipline, faith, practice, and religious law,” and that the civil courts are precluded from resolving disputes involving churches if “resolution of the disputes cannot be made without extensive inquiry into religious law and polity.” As a result, a church’s personnel decisions “are protected from civil court interference where review by the civil courts would require the courts to interpret and apply religious doctrine or ecclesiastical law.” Pastor Tim insisted that the court could resolve his breach of contract dispute since it did not involve the interpretation of any religious principles. The church claimed that resolution of the lawsuit would require an examination of the doctrinal issues that surrounded the decision to terminate Pastor Tim’s employment.

The court noted that an employment contract for a specified term (in this case, three years) generally can be terminated by the employer prior to the end of the term only for “good cause.” In order to make a determination of good cause, a court “would have had to engage in the impermissible scrutiny of the doctrinal or church polity issues that formed the basis for the elders’ decision to terminate the pastor’s contract …. When the officials of a religious organization state their reasons for terminating a pastoral employee in ostensibly ecclesiastical terms, the first amendment effectively prohibits civil tribunals from reviewing these reasons.”

The court also rejected Pastor Tim’s claim for the payment of his salary for the remaining two years of his original employment term: “As a general rule good cause for termination of an employment contract and the employer’s liability for payment of wages for the remaining portion of the contract are inextricably linked. A finding of good cause is a finding of no liability on the part of the employer. Pastor Tim claims no pertinent contract provision that severs this link, and thus he fails to show that consideration of his claim can be accomplished absent resolution of the factual issue of good cause.”

Application. This case illustrates two important principles. First, the courts rarely if ever will resolve lawsuits brought by dismissed clergy against their former church. Second, the trial court dismissed this case on the additional ground that Pastor Tim had signed the 90-day severance check issued by the church. According to the trial court, this amounted to an “accord and satisfaction” of all of the pastor’s claims against the church and precluded him from pursuing any claims against the church in court. An accord and satisfaction is a binding settlement of a disputed claim that occurs when one party offers less than the disputed amount to the other with the understanding that its acceptance will constitute a settlement of the entire claim, and the other party accepts the lower amount. Under these circumstances, the party who accepted the lower amount cannot later claim any additional amount. It is important for church leaders to be familiar with this principle. Never accept partial payment of a disputed claim without legal counsel to be sure that you do not inadvertently enter into an accord and satisfaction. Stewart v. Kingsley Terrace Church of Christ, 767 N.E.2d 542 (Ind. App. 2002).

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