• Key point. Churches generally are not liable for sharing truthful references about a former worker when asked to do so by another church.

• Key point. Churches generally are not liable on the basis of wrongful termination for dismissing an employee because of criminal behavior.

A New Jersey court ruled that a church acted properly in dismissing its music director for criminal acts. The music director entered into a one—year employment contract with a church in 1994. The contract contained the following provision for termination:

The parties involved shall give notice of termination of employment at least thirty days in advance of the termination. The termination time must be completed by the employee or if the employer does not wish the termination to be completed the employer shall fulfill all contractual financial agreements.

After working for the church for a few months, the music director was arrested for possession of illegal anabolic steroids. It was later disclosed that the music director had been taking steroids to assist him with bodybuilding, and that he had previously ordered several shipments of steroids shipped directly to the church to avoid detection. One package recovered by the police contained 290 tablets of methandrostenolone, 240 tablets of oxandrolone, and 9 vials of deca durabolin. A few days later the pastor of the church learned of his music director’s arrest from a newspaper article. The pastor met with the music director that day and urged him to resign. The next day the music director removed all of his personal belongings from his church office. The pastor wrote him a letter that read, in part:

Because of this unfortunate incident I believe it absolutely necessary that you and I meet as soon as possible to discuss a resolution to this matter vis—a—vis your continued employment by St. Anthony’s Church in the position of Music Director. As you recall, during that meeting I solicited your thoughts on how we might resolve the matter. However, you told me that you were unable to offer any resolution. Because I had all day to reflect on the matter, and because of the gravity of the situation caused by you never informing me of the arrest on Church property, as well as your use of the Church’s address to receive these illegal substances, I had arrived at what I considered to be the best solution possible for all involved …. As I told you during that meeting, I think it is essential … because of the serious nature of the matter … that it would be best for you to resign immediately from your position here at St. Anthony’s. At the conclusion of our meeting you indicated acceptance of my proposal and you kindly returned to me your Church keys that evening.

The music director sent the pastor a letter stating that he intended to continue his duties at the church unless he was fired. He also wrote that if he was not fired, he would show up for choir rehearsal the next day. The pastor immediately replied by fax that it was clear that the music director had resigned by virtue of his returning his keys, removing his personal belongings, and not appearing for mass after his resignation. The music director responded by fax that he did not resign and intended to continue unless fired. The pastor sent another fax stating: “Let me make it perfectly clear that you are not to come on Church property, and you are not to cause any disruption with choir or Masses.”

A few days later the music director applied to another church for similar employment, but his application was rejected when the church contacted the previous church and was informed by the pastor of what had happened. The music director sued his former church, alleging breach of contract. He also claimed that the pastor, by informing the other church of the music director’s criminal activities, had wrongfully “interfered with his prospective economic advantage.”

Responding to the reference request

The trial court dismissed the music director’s assertion that the church had wrongfully interfered with a “prospective economic advantage.” It noted that the music director could not show that “there was an intentional, without justification, interference” with his economic advantage. Further, the court pointed out that the pastor had disclosed the information only after it was requested, and the information was of criminal conduct admitted by the music director and covered in the newspaper. Additionally, the pastor was protected by a “qualified privilege” for employment references, meaning that he could not be liable unless his reference contained information that the pastor knew to be false. The music director did not appeal this ruling.

Wrongful termination

The trial court also rejected the music director’s claim that he had been wrongfully terminated by the church. A state appeals court agreed. It noted that there was some uncertainty whether the music director had resigned or been terminated. But even if he had been terminated, the court concluded that the church could not be liable. It based its decision on two grounds. First, it noted that “in every contract there is an implied covenant of good faith and fair dealing.” The music director violated this covenant by his behavior:

Even where, as here, the employee performs the duties contracted for satisfactorily, criminal activity by the employee can justify his discharge for breach of an employment contract …. It is clear that [the music director] intentionally ordered the anabolic steroids for his personal use and had them shipped to St. Anthony’s address. This constituted a breach of the implied conditions of [his] contract of employment. The receipt of anabolic steroids at work indirectly involved St. Anthony’s in the commission of a criminal offense and constituted gross misconduct. The criminal offense while not immediately injurious to St. Anthony’s, eventually resulted in his arrest on church property and a newspaper report naming St. Anthony’s as the [music director’s] employer.

Second, the court concluded that employees have a “duty of good conduct.” It based this duty on the following language from a respected legal treatise:

[An employee] is subject to a duty not to conduct himself with such impropriety that he brings disrepute upon the [employer] or upon the business in which he is engaged …. The nature of the business and the position of the agent determine what reputation the agent has agreed to maintain and what conduct can be expected from him …. [A]lthough the employer has no control over the conduct of such persons when they are not engaged in his work, he has such interest in the general integrity of his business household that it may be a breach of duty for one of them to acquire a deserved reputation for loose living, or to commit a serious crime. Restatement (Second) of Agency, ⊥ 380 (and comment).

The court concluded that “when the duty of good conduct is violated by an employee, the employer has good cause to terminate a contract and the termination will not support a cause of action for breach of contract.” It continued:

By virtue of his arrest [the music director] brought negative publicity to St. Anthony’s. Moreover, steroid use, especially through intravenous injection, carries various health and behavioral risks to others. Injecting steroids creates an increased risk of contracting any number of infectious diseases. Further, steroids have been known to cause “rages” where the slightest provocation “can cause an exaggerated, violent and often uncontrolled response.” Id. at 451. Plaintiff served in a position where he would come into contact with many members of the parish. St. Anthony’s could not have been expected to tolerate the risk that plaintiff might contract a communicable disease or attack a member of the parish. As a result [the church] had good cause to terminate the employment contract by virtue of [the music director’s] breach of the implied covenant of good faith and fair dealing and because of the risks created by his illicit steroid use.

30 day notice provision

The music director noted that the contract (quoted above) required the church to provide him with 30 days notice of termination, and that if it did not, then it had to pay him for an additional 30 days. The court disagreed that this provision gave the music director a right to 30 days additional compensation: “We are convinced that [the music director] having breached the employment contract, and having been rightfully discharged for cause, should not be allowed to recover termination pay under the termination clause of the breached contract. This is particularly so where it would have been so strikingly improvident for the pastor to have permitted [him] to continue for the thirty day period referred to in the termination clause.”

Application. This case is important for two reasons:

• It is one of the few cases to address the liability of churches for providing “negative” references on former workers. The trial court concluded that the church was not liable for the pastor’s disclosure of the music director’s criminal activities to the other church-even though it resulted in the rejection of his application. This decision was based on the following considerations: (1) the reference had been requested by the other church; (2) the pastor disclosed criminal behavior that had been acknowledged by the music director; (3) the information disclosed by the pastor was published in the newspaper; and (4) the pastor was protected by a “qualified privilege for employment references.” The “qualified privilege for employment references” refers to the fact that some courts have said that employers cannot be liable for employment references unless they act maliciously (meaning that they share information they know to be false, or with a reckless disregard as to its truth or falsity).

• The court recognized that employees have a “duty of good conduct.” Churches in any state that recognizes this principle will have significant legal protection when they dismiss an employee for misconduct. McGarry v. Saint Anthony of Padua Roman Catholic Church, 704 A.2d 1353 (N.J. Super. 1998).
[Termination of Employees]

© Copyright 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: m43 m61 c0498