Employment Practices – Part 1

A federal court ruled that a 59-year-old principal could sue his employing church-affiliated school for age discrimination when his one-year employment contract was not renewed.

Church Law and Tax2000-07-01

Employment Practices

Labor Laws

Key point 8-05. Congress has enacted a number of employment and civil rights laws regulating employers. These laws generally apply only to employers that are engaged in interstate commerce. This is because the legal basis for such laws is the constitutional power of Congress to regulate interstate commerce. As a result, religious organizations that are not engaged in commerce generally are not subject to these laws. In addition, several of these laws require that an employer have a minimum number of employees. The courts have defined “commerce” very broadly, and so many churches will be deemed to be engaged in commerce.

Key point 8-07. 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 8-09. 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 20 employees.

A federal court ruled that a 59-year-old principal could sue his employing church-affiliated school for age discrimination when his one-year employment contract was not renewed. A 53-year-old man (Gerald) was hired in 1991 as principal of a church-affiliated school. He was hired on a one-year contract which was renewed each successive year for six years. He signed his seventh and final contract in 1997, which was to end in June of 1998. Gerald never received any disapproving evaluations during his tenure at the school. Nevertheless, some members of the school council decided that Gerald’s administration of the school had run its course. A meeting of the school council was scheduled in February of 1998 to take a vote on the renewal of Gerald’s contract. Prior to this meeting, rumors circulated among parents of students that the council intended to vote against Gerald’s continued service as principal. The school council meeting was heavily attended by parents, the vast majority of whom spoke in favor of retaining Gerald. The parents’ attempts to sway the council were unavailing, and the school council voted not to renew his contract.

The council was silent as to the reasons for its decision. Some council members stated that “the board’s reasons had to be kept confidential in order to protect Gerald.” One parent later testified that the pastor of the church stated that the reasons for the nonrenewal of Gerald’s contract were “so serious that [he] was not at liberty to tell the parents.” In the absence of clear reasons, parents substituted rumors, among them that Gerald had endangered the children, that he was a pedophile, that the school lacked discipline under his reign, and that he must have been guilty of fraud or theft against the school. Gerald, who was just two months away from his sixtieth birthday, was replaced by a younger woman.

Gerald sued the school, church, and various church agencies, claiming that the decision not to renew his contract amounted to age discrimination in violation of the federal Age Discrimination in Employment Act. A federal court began its opinion by noting that an age discrimination claim requires evidence of a discriminatory intent, and that such an intent can be proven in one of three ways: direct evidence of discriminatory intent; a presumption of intent raised by a “prima facie case” of discrimination; or statistical evidence of a pattern of discrimination. There was no statistical evidence of a pattern of age discrimination by any of the defendants in this case, and so the court focused on the other two ways to prove discrimination.

Direct evidence of discriminatory intent

Gerald attempted to prove direct evidence of a discriminatory intent by referring to a conversation that a parent had with the pastor. The parent asked the pastor why Gerald’s contract had not been renewed, and the pastor replied, “It’s just Gerry’s old and set in his ways.” The court ruled that this statement did not prove a discriminatory intent. It noted that “direct evidence is evidence that establishes the existence of discriminatory intent behind the employment decision without any inference or presumption,” and that the pastor’s comment “suggests little more than [his] willingness to speak in cliches” and did not constitute evidence that Gerald was not rehired because he was too old.

Circumstantial evidence-a “prima facie case”

A discriminatory intent by an employer can also be proven through circumstantial evidence. One way to do this is by establishing a “prima facie case” of age discrimination. Such a case requires proof of four factors: (1) the plaintiff is at least 40 years old; (2) the plaintiff was qualified for a specific condition or benefit of employment; (3) the plaintiff was denied the condition or benefit despite his qualifications; and (4) that condition or benefit was enjoyed by or given to someone younger than the plaintiff.

The school and other defendants conceded that Gerald had established a prima facie case of discrimination. At the time his employment contract was not renewed, he was almost 60 years old, and he was replaced by someone younger.

When a plaintiff establishes a prima facie case of discrimination, the burden shifts to the employer to show legitimate, nondiscriminatory reasons for the adverse employment action. To rebut the presumption of age discrimination raised by Gerald’s prima facie case, the defendants asserted that Gerald was not re-hired because “he had demonstrated an inadequate leadership skill while acting as principal.” They offered several specific examples of this perceived inadequacy: his response to a playground fight was “improper” and “evidenced a lack of understanding of the discipline policy and a lack of willingness to enforce the discipline policy”; his reversal of a teacher’s decision to retain or promote a student “demonstrated a lack of propriety”; he “mishandled” an incident involving an asthmatic child who missed medication during school; he made “an unauthorized promise of money for playground equipment outside of the guidelines of the budgeting process”; he hired an individual “as the resource teacher and assistant principal without the position being budgeted for and without the specific prior approval of the school council”; he “mishandled” an incident involving a child struck in the head by a rock left on the playground; and he “was unacceptably weak with respect to issues concerning curriculum development for the school.”

The court pointed out that “neither the reason of inadequate leadership nor these specific examples of that inadequacy involve age or attributes unreasonably attributed to advanced age, and they suffice as legitimate, nondiscriminatory alternative reasons for the non-renewal of the employment contract.”

A church-affiliated school decided not to renew the annual employment contract of its principal. The principal sued the school, church, and various church agencies, claiming that the decision not to renew his contract amounted to age discrimination in violation of the federal Age Discrimination in Employment Act.

When an employer establishes a nondiscriminatory reasons for an adverse employment action involving an employee who is alleging age discrimination, the burden shifts back to the employee to demonstrate that the employer’s allegedly nondiscriminatory reasons for the employment decision were a mere “pretext” masking the underlying discrimination. The court noted that school offered only subjective reasons for its decision not to renew Gerald’s contract (its general evaluation of his leadership as inadequate or weak), and concluded:

Subjective interpretations color the specific examples offered in support of the general evaluation. [Gerald’s] seven-year history as principal . . . has not been marred by any negative evaluations or corrective counseling from his supervisors, and this long term of service free of admonition or reprimand itself casts doubt on the defendants’ subjective explanation. Further, [Gerald] has offered alternative explanations for all of the specific examples of his supposedly inadequate leadership, and his explanations demonstrate awareness of and comportment with [church] policy and considered decision-making (for example, the playground fight was resolved after extensive discussions with the parents of the children involved and the parties decided to combine at-home punishment with in-school suspension, and his overrule of a teacher’s decision not to promote two students was in accord with [church] policy and was decided after extensive review of the facts). By offering alternative interpretations of the specific examples, [Gerald] has therefore underscored the doubt he has already raised about the purely subjective nondiscriminatory reasons proffered by the defendants. [Gerald] has thus carried his burden of showing the defendants’ legitimate nondiscriminatory alternative reasons for the non-renewal of his contract to be pretextual.

In conclusion, the court concluded that Gerald had a viable claim of age discrimination.


Gerald also claimed that the church, pastor, and various church agencies had defamed him in two ways. First, Gerald claimed that the pastor was fully aware of the rumors circulating among parents about possible reasons for the non-renewal decision, that he chose to remain silent and not refute those rumors, and that this failure to refute the rumors constituted slander. Second, Gerald claimed that the statements made by the various school officials to the effect that they could not disclose the reason for the nonrenewal of Gerald’s contract because it was “too serious” impute “moral turpitude” to him.

The court rejected Gerald’s defamation claims. It defined defamation as “a false communication of and concerning the plaintiff, communicated to a third person, that subjects the plaintiff to disgrace, ridicule, odium, or contempt.” Neither of Gerald’s two claims of defamation satisfied this test:

This court understands that an implication can be as venomous as an accusation, that a lacuna can be as expressive as a word. A discrete community of auditors may, at a certain time or place or occasion, interpret an otherwise innocuous gesture, statement, or silence to be an unequivocal expression of a specific charge. Still, there must be some certain link connecting the expressive behavior disputed to a charge of infamy and turpitude. [The pastor] implied at best that [Gerald] had done something wrong; the rumors that resulted from his grave insistence on confidentiality ranged from pedophilia to embezzlement to mere ineffectuality. There is no evidence from which a [jury] can conclude that the defendant imputed to [Gerald] a grossly immoral felony.

Application. This case is important for several reasons, including the following:

1. Was the school subject to the age discrimination law? The court did not even mention the fact that the Age Discrimination in Employment Act applies only to employers that have 20 or more employees and that are engaged in interstate commerce. Presumably, the school had 20 or more employees, and the school did not even question the commerce requirement.

2. Nonrenewal of one-year employment contracts. Many churches and church schools have adopted the practice of offering employees a one-year contract. Often, the objective is to give the employer the opportunity of getting rid of an employee without having to fire him or her. All it has to do is fail to renew the contract at its expiration. This case suggests that such a practice may not be legally sound. Neither the school nor the court even mentioned the fact that the school had not “fired” the principal, but rather had simply failed to renew his contract. Presumably, this means that the school considered this defense too weak to mention.

3. Procedure in employment discrimination cases. The case summarizes the “burden shifting” analysis in an age discrimination case. The same analysis applies to most other discrimination claims. Church leaders should be familiar with it. Employees who claim employment discrimination have the initial burden of establishing a prima facie case of discrimination. This requires proof that (1) they are a member of a class protected by a federal, state, or local civil rights law; (2) they suffered an adverse employment decision (such as not being hired if a job applicant, or being dismissed or disciplined if an employee); (3) a direct relationship exists between membership in the protected class and the adverse employment decision. If an employee is successful in making out a prima facie case of discrimination, then a presumption of discrimination exists, and the burden shifts to the employer to show a legitimate, nondiscriminatory reason for the adverse employment decision. If the employer demonstrates a nondiscriminatory reason for the adverse employment action, then the presumption is rebutted and the employee must prove that the nondiscriminatory reason was a pretext for discrimination. The court in this case noted that if an employer’s allegedly nondiscriminatory basis for an adverse employment action is “subjective” in nature, then this seldom will be sufficient to overcome a presumption of pretext.

4. Legal effect of positive employee evaluations. The court concluded that a lengthy employment relationship (in this case, 7 years) without any negative employee evaluations casts serious doubt on an employer’s allegedly nondiscriminatory basis for an adverse employment action regarding that employee. The importance of this point cannot be overstated. Churches that perform employee evaluations should recognize that a series of positive evaluations could place the church in a weak position in the event it dismisses or disciplines the employee and is hit with a discrimination claim. Shook v. St. Bede School, 74 F.Supp.2d 1172 (M.D. Ala. 1999).

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