Recent Developments in North Carolina Regarding Sexual Harassment

A North Carolina appeals court ruled that the first amendment did not prevent it from resolving a sexual harassment lawsuit brought by three female church employees against their church and denominational agencies.

Church Law and Tax1998-09-01

Sexual Harassment

Key point. Employees who engage in offensive contacts and language of a sexual nature with other employees may expose their employer to liability for “hostile environment” sexual harassment. Churches may be liable like any other employer for such acts.

A North Carolina appeals court ruled that the first amendment did not prevent it from resolving a sexual harassment lawsuit brought by three female church employees against their church and denominational agencies. Three female church employees (the “plaintiffs”) sued their Methodist church and various Methodist agencies as a result of the sexual misconduct of a pastor. The lawsuit alleged that the pastor “committed inappropriate, unwelcome, offensive and nonconsensual acts of a sexual nature against the plaintiffs, variously hugging, kissing and touching them, and made inappropriate, unwelcome, offensive and nonconsensual statements of a sexually suggestive nature to them.” The plaintiffs further alleged that the pastor’s actions amounted to sexual harassment and assault and battery, causing them emotional distress, embarrassment, humiliation, and damage to their reputations and career potential. The lawsuit further alleged that the local church and Methodist agencies “knew or should have known” of the pastor’s propensity for sexual harassment as well as assault and battery upon female employees and that they failed to take any actions to warn or protect the plaintiffs from his wrongful activity. The trial court dismissed all of plaintiffs’ claims against the local church and Methodist agencies. It reasoned that the power to discipline and assign or remove a Methodist minister is within the principle of “itinerant general superintendency and the exclusive power of episcopacy,” and that the power of a secular court to “second guess that power to assign or remove clergy or to second guess the discipline of clergy is an intrusion into matters of church governance and discipline and would constitute an excessive entanglement between church and state in violation of the first amendment.” The plaintiffs appealed.

A state appeals court began its opinion by noting that the key issue was whether the first amendment prevents “the filing of a negligent retention and supervision claim against a religious organization, when that claim is based on the conduct of a cleric of that organization.” The court noted that the local church and denominational agencies asserted that the civil courts are without jurisdiction to resolve plaintiffs’ claims against them because the courts’ resolution of these claims requires inquiry into religious doctrine. The court disagreed. It noted that the first amendment “does not grant religious organizations absolute immunity from liability. For example, claims against religious organizations have long been recognized for premises liability, breach of a fiduciary duty, and negligent use of motor vehicles.” The court concluded that if a resolution of the plaintiffs’ legal claims did not require the interpretation of church doctrine, then “the first amendment is not implicated and neutral principles of law are properly applied to adjudicate the claim.”

The court noted that North Carolina recognizes negligent supervision and retention as independent bases of legal liability. To support a claim of negligent retention and supervision against an employer, a plaintiff must prove that “the incompetent employee committed a tortious act resulting in injury to plaintiff and that prior to the act, the employer knew or had reason to know of the employee’s incompetency.” The court concluded:

We acknowledge that the decision to hire or discharge a minister is inextricable from religious doctrine and protected by the first amendment from judicial inquiry. We do not accept, however, that resolution of the plaintiffs’ negligent retention and supervision claim requires the trial court to inquire into the church defendants’ reasons for choosing [the pastor] to serve as a minister. The plaintiffs’ claim, construed in the light most favorable to them, instead presents the issue of whether the church defendants knew or had reason to know of [the pastor’s] propensity to engage in sexual misconduct, conduct that the church defendants do not claim is part of the tenets or practices of the Methodist Church. Thus, there is no necessity for the court to interpret or weigh church doctrine in its adjudication of the plaintiffs’ claim for negligent retention and supervision. It follows that the first amendment is not implicated and does not bar the plaintiffs’ claim against the church defendants.

Certainly, a contrary holding-that a religious body must be held free from any responsibility for wholly predictable and foreseeable injurious consequences of personnel decisions, although such decisions incorporate no theological or dogmatic tenets-would go beyond first amendment protection and cloak such bodies with an exclusive immunity greater than that required for the preservation of the principles constitutionally safeguarded.

Application. This case is important for the following reasons. First, it illustrates the potential liability of churches and denominational agencies for the sexual harassment of clergy. A feature article in this newsletter discusses two recent Supreme Court rulings addressing employer liability for a supervisory employee’s acts of “hostile environment” sexual harassment. Second, the court concluded that churches and denominational agencies can be liable for the sexual misconduct of clergy if they have knowledge of prior misconduct and fail to reasonably protect others from foreseeable harm. It is critical for church leaders to comprehend the legal significance of such knowledge. Finally, the court rejected the church defendants’ claim that the first amendment guaranty of religious freedom prevented the civil courts from resolving the women’s claims. So long as such claims can be resolved without reference to doctrine or polity, the first amendment does not bar the civil courts from resolving them. As readers of this newsletter can attest, not all courts would agree with this conclusion. But the fact that some do suggests that the first amendment should not be viewed as a substitute for effective personnel policies. Smith v. Privette, 495 S.E.2d 395 (N.C. App. 1998).

[Seduction of Counselees and Church Members, The Civil Rights Act of 1964,Judicial Resolution of Church Disputes,Negligence as a Basis for Liability]

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