• Key point 8-04. In most states, employees who are hired for an indefinite period are considered “at will” employees. This means that the employment relationship may be terminated at will by either the employer or employee, with or without cause, and with or without notice. The courts and state legislatures have created a number of exceptions to the at will employment rule. These exceptions limit the right of an employer to terminate an at will employee. Employees who are hired for a specific term are not at will employees, and they may be terminated only if the employer has “good cause.” Termination of Employees

• Key point 8-08.1. 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. The Civil Rights Act of 1964

The Montana Supreme Court ruled that it was barred by the first amendment guaranty of religious freedom from resolving a lawsuit brought by a woman who claimed that she had been unlawfully terminated from her employment at a church school on the basis of her cohabitation with a man to whom she was not married. A woman (“Tracy”) was hired to teach first grade at a church school in 1981, and became the school’s counselor in 1988. Her employment was terminated in 1993. Tracy insisted that she was dismissed because the school did not approve of her cohabitation with a man to whom she was not married, contrary to the church’s moral teachings. According to the school, however, Tracy was terminated in 1993 because her position was discontinued. Tracy was married from 1974 to 1984 and remarried after her termination from employment. Therefore, there were periods of time while she was employed by the school that she was married, and other times when she was single: she was married when she was hired and single when she was terminated. However, she did not claim to have been terminated because she was single. In fact, she had been single for nine years by the time she was terminated.

When Tracy accepted the job of school counselor in 1988, she signed an employment contract in which she agreed “[t]o conform to and abide by all of the moral and religious teachings and beliefs of the [church] and not to engage in any personal conduct or lifestyle which would be at variance with or contrary to the policies of the school and [church].” A school official later testified that the school was church-affiliated and espoused the teachings and beliefs of the church. He also testified that it was important that the school’s administrative employees demonstrated a lifestyle which reflected the beliefs of the church if they were to serve as role models for the children educated at the school, and that it was inconsistent with the church’s teachings for a person to cohabit with someone of the opposite sex to whom he or she is not married.

Tracy sued the school, claiming that her termination violated a state civil rights law prohibiting employers from discriminating against employees on the basis of marital status or sex. The trial court dismissed the case on the ground that any resolution of Tracy’s claims would violate the first amendment guaranty of religious freedom. Tracy appealed, arguing that the school’s defense that she had been terminated because her position had been eliminated was a “pretext for terminating her because of her lifestyle.” She insisted that the real reason for eliminating her position “was that at the time the decision was made she was living with someone who was not her husband.” In response, the school claimed that it had the right to terminate Tracy’s employment following her admitted failure to conform her conduct to the church’s moral values. The school stressed that Tracy had agreed in writing to conform her conduct to the church’s teachings.

The state supreme court began its opinion by noting that a state civil rights law prevented employers from discriminating in any employment decision “because of race, creed, religion, color, or national origin or because of age, physical or mental disability, marital status, or sex ….”

The court concluded:

[Tracy’s] termination had nothing to do with her marital status; it was based on her conduct. In other words … it would have made no difference whether [she] was married or single. If she had cohabited with someone of the opposite sex to whom she was not married, the same result would have occurred. She would have engaged in personal conduct at variance with and contrary to the moral and religious teachings of the [church].

No authority has been offered to suggest that [the state civil rights law] which prohibits discrimination against people based on various characteristics or beliefs prohibits discrimination based on a person’s conduct. Nor has any authority been offered to persuade us that [Tracy’s] conduct at issue involved a right of such high order that it would overcome the school’s right to freely exercise its religion through its employment practices as guaranteed by the first amendment to the United States Constitution …. [W]e see no need to balance those religious rights … against [Tracy’s] right to be free from discrimination based on marital status or her gender. This case is not about marital status or gender. It is about conduct which [she] agreed to avoid when she signed her employment agreement with [the school]. Even if she was terminated for the reason alleged, we conclude that her rights to be free from discrimination were not involved.

Application. Note the following points:

1. Imposing a church’s moral teachings on employees. This case recognizes the legal right of a church to dismiss an employee who violates the church’s moral teachings. Such dismissals cannot be challenged on the ground that they amount to discrimination based on sex or marital status. This assumes, of course, that the church’s moral teachings are uniformly applied to all employees. As many cases addressed in this newsletter have demonstrated, a church can violate state or federal civil rights laws barring employment discrimination based on sex if it enforces moral standards only against one gender. To illustrate, a policy barring extramarital sexual relations is certainly appropriate and will be honored by the courts. But if this policy is applied only to offending female employees, then a lay female employee who is dismissed for violating the policy can maintain a discrimination claim against the church. The state civil rights law in this case also barred employment discrimination based on marital status. This claim failed because the court concluded that Tracy would have been terminated for living with a man to whom she was not married whether she were single or married.

2. Employment contracts. The church school required Tracy to sign a contract in which she agreed to “conform to and abide by all of the moral and religious teachings and beliefs” of the church and not to “engage in any personal conduct or lifestyle which would be at variance with or contrary to the policies of the school and [church].” It is certainly desirable for any church expecting its employees to abide by the church’s moral teachings to sign a contract or some other written commitment, at the time they are employed, agreeing to be bound by the church’s moral teachings. However, the contract in this case did not spell out what those moral standards were. Contracts should specify several examples of conduct that is deemed unacceptable so that employees cannot claim that they were unaware of what behavior violated the church’s moral teachings. The contract also should specify that the church board (or some other group or individual) will have the final authority to determine the church’s moral standards and teachings. In other words, all doubts regarding this issue will be resolved internally, by a designated church group or officer.

3. Employee manuals. One more point is worth noting. Two judges dissented from the court’s ruling. These judges believed that Tracy should have been allowed to pursue her discrimination claim against the school. They conceded that Tracy agreed to be bound by the church’s moral teachings by signing her contract of employment, but they stressed that the school’s employee manual contained an “affirmative action” policy specifying that the school “complies with federal and state law regarding discrimination in employment. Applicants for employment shall be considered for employment, and employees shall hold employment, without discrimination because of age, sex, physical or mental handicap or marital status as required by the Montana Human Rights Act and the federal law.” The dissenting judges concluded that this policy in effect “waived” any first amendment protection the school might have otherwise had in requiring its staff to comply with the church’s moral teachings. While this conclusion was rejected by a majority of the court, it would be a good practice for church leaders to review their employee manuals to see if a similar “affirmative action” policy exists. If so, then language should be inserted that avoids any conflict between such a policy and employment contracts or other documents that seek to impose the church’s moral teachings on employees. Parker-Bigpack v. St. Labre School, 2000 WL 1101003 (Mont. 2000).

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